Daily ETF Watch: iShares Debuts Div Fund

May 19, 2016

BlackRock’s iShares unit is set to launch an international dividend growth ETF today. The iShares International Dividend Growth ETF (IGRO) comes with an expense ratio of 0.22% and will list on the Bats Exchange, which owns ETF.com.

IGRO tracks the Morningstar Global ex-US Dividend Growth Index, which, after screening out the top 10% of stocks in its parent index based on yield, covers non-U.S. stocks that pay a qualified dividend and have five years or more of consistent dividend growth, as well as an earnings payout ratio of less than 75%, the prospectus says.

The index can include companies from any size segment as well as from developed and emerging foreign markets. The prospectus notes that component companies are drawn mainly from the consumer discretionary, consumer staples, financials and health care sectors.

The fund can lend securities equal to one-third of its total assets.

First Trust Debuts Active Alts ETF

First Trust has rolled out an actively managed alternatives ETF on the Nasdaq that primarily invests in commodity futures. The First Trust Alternative Absolute Return Strategy ETF (FAAR) takes long and short positions in commodity futures, which it accesses through a Cayman Islands subsidiary. FAAR comes with an expense ratio of 0.95%.

The fund invests up to 25% of its portfolio in its subsidiary, with the rest invested in cash and cash equivalents. The prospectus notes that FAAR’s investment in the subsidiary could have high levels of turnover due to the rolling of contracts and rebalancing of its commodity sector exposure.

The largest actively managed ETF in the absolute-returns space is the $187 million WisdomTree Managed Futures Strategy Fund (WDTI | C-73), but beyond commodity futures, it also offers exposure to currency and Treasury futures.

Meanwhile, First Trust already has a managed futures ETF trading. The First Trust Morningstar Managed Futures Strategy Fund (FMF | D), like FAAR, takes long and short futures positions, but it also offers exposure to currency and equity indexes, in addition to commodities. Despite launching in 2013, FMF only has about $7 million in assets under management.

New LatAm Fund Unveiled
Brazilian firm BullMark Financial Group has rolled out an ETF targeting high-dividend-yield companies from Brazil, Mexico, Chile, Peru and Colombia. The BullMark LatAm Select Leaders ETF (BMLA) is listed on the Nasdaq stock exchange, with an expense ratio of 0.70%.

BMLA is a one-of-a-kind product, as there are no other Latin America ETFs that encompass multiple countries and focus on dividend yield.

The underlying index selects its components from a universe that includes stocks from the five mentioned countries that also have market capitalizations of more than $500 million, a trailing three-month average daily volume of at least $3 million and a 12-month dividend yield of at least 2%, the prospectus said. From there, BullMark, which is the index provider, selects stocks that, according to the prospectus, are “indicative of the performance of the leading, top performing Latin American companies.”

The index had 35 components as of March 31; it is reviewed every six months.

Contact Heather Bell at [email protected].

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