Daily ETF Watch: EGShares Closing 4 Funds
Three EM bond funds and one China equity fund slated for liquidation.
Three EM bond funds and one China equity fund slated for liquidation.
Emerging Global Advisors has shut down four of its funds according to a group of filings dated Aug. 4. The summary prospectuses each note at the top of their second pages that “The Board of Trustees (the “Board”) of the EGA Emerging Global Shares Trust (the “Trust”) has authorized an orderly liquidation of the Fund. The Board has determined that closing and liquidating the Fund is in the best interests of the Fund and its shareholders.”
Each prospectus goes on to state that the respective funds were to cease trading on Sept. 29.
The closed funds include:
- EGShares TCW EM Long Term Investment Grade Bond ETF (LEMF)
- EGShares TCW EM Intermediate Term Investment Grade Bond ETF (IEMF)
- EGShares TCW EM Short Term Investment Grade Bond ETF (SEMF)
- EGShares China Infrastructure ETF (CHXX)
The three bond funds, which launched in January, had roughly $2 million in assets under management apiece at the time of the filing, while CHXX, which debuted back in February 2010, had less than $10 million.
The fixed-income ETFs represented the first foray into the ETF space for the TCW Group; the firm, which manages billions of dollars of investments in emerging market debt, served as the subadvisor to the fund.
The four closures bring the total number of ETFs liquidated for 2014 so far to 57.
Etracs Debuts High-Div, Low-Vol ETN
On Tuesday, Sept. 30, UBS added another ETN to its Etracs lineup. The Etracs Monthly Pay 2xLeveraged US High Dividend Low Volatility ETN (HDLV) is tied to an index provided by Solactive that weights each component by its three-month average daily value traded on all U.S. exchanges.
According to a UBS fact sheet, the index has 40 components. It selects them from 1,000 of the largest U.S.-domiciled publicly traded companies based on their forward-looking distribution yield and their 12-month trailing realized volatility, according to the ETN’s pricing supplement.
HDLV will seek to achieve twice the returns of its underlying benchmark on a monthly basis.
It comes with an “annual tracking rate” of 0.85 percent.
ProShares ETFs In Jeopardy
A filing from ProShares indicated that the firm had been notified by the NYSE that three of its ETFs did not meet the exchange’s requirements for continued listing with regard to their number of “record or beneficial holders” and were in danger of being delisted.
The three funds under threat are:
- ProShares Short 30 Year TIPS/TSY Spread (RINF)
- ProShares UltraPro 10 Year TIPS/TSY Spread (UINF)
- ProShares UltraPro Short 10 Year TIPS/TSY Spread (SINF)
Each one has $5 million or less under management; all three launched in 2012.
According to the filing, ProShares presented a plan to attract and retain a sufficient number of record or beneficial holders, and the NYSE approved an extension through Dec. 23, 2014. Record holders are stockholders that hold stocks registered in their own names, while beneficial holders own shares via a third party that is listed as the record holder.
The filing warns that “there is no guarantee” that the three ETFs will be able to attract the required number of shareholders by the deadline, and delisting would mean that the fund would no longer be in compliance with the requirements set forth by the exemptive relief granted by the SEC that allows the funds to operate. If they are delisted, the filing notes that they would be forced to close.
New PureFunds ETF In Registration
PureFunds, the second incarnation of FactorShares, recently filed for an ETF that will focus on the technology space.
The PureFunds ISE Technology ETF will track an index of emerging and developed-market companies that are classified into two groups—as software or hardware developers, or as technology service providers, the prospectus said. The two sectors are weighted based on the total market capitalization of their components, but within each sector, the components are equally weighted.
FactorShares first launched its PureFunds ETFs in November 2012—all three were focused on mining-related companies. The firm also had five spread ETFs trading at the time; they closed in November of last year. Two of the PureFunds closed in January, and only the PureFunds ISE Junior Silver ETF (SILJ) is currently trading.
The fund is slated to list on the NYSE Arca, with an expense ratio of 0.69 percent.
