Daily ETF Watch: New Stock-Split Fund

A new ETF seeks to leverage price appreciation following stock splits.

Reviewed by: Heather Bell
Edited by: Heather Bell

A new ETF seeks to leverage price appreciation following stock splits.

United States Commodity Funds, the Oakland, California-based firm known for its lineup of futures-based commodity ETFs, branched into new territory this week with the launch of an equity ETF that seeks to capture the price appreciation that can follow stock splits.

The Stock Split Index Fund, which is trading under the symbol “TOFR,” began trading on Tuesday, Sept. 16 with a primary listing on NYSE Arca, the company said in a press release.

“The 2-for-1 index idea is that a stock that splits may outperform expectations for a period of time,” John Hyland, chief investment officer of USCF said in the press release. “There has been a lot of material published that demonstrates that stock splits, do in fact, matter.”

The ETF comes with a net annual expense ratio of 55 basis points, or $55 for each $10,000 invested, according to the fund’s latest prospectus.

iShares Plans A-Share Fund

BlackRock’s iShares unit has finally thrown its hat into what is now a well-trod ring. A recent filing outlines the ETF provider’s plan to launch a fund tracking the China A-Shares market, the iShares MSCI China A ETF.

It’s not that iShares has shied away from China: It has four U.S.-listed funds targeting parts of China’s markets, including the nearly $6 billion iShares China Large Cap ETF (FXI | B-51), the largest China-focused ETF in terms of assets under management.

But it has steered clear of the elusive A-shares market while smaller ETF providers have charged in—including Deutsche Bank, Van Eck’s Market Vectors unit and KraneShares.

The A-shares market has long been elusive to foreign investors because only domestic investors can legally trade them—unless, that is, one has access to a qualified foreign institutional investor (QFII) or renminbi qualified foreign institutional investor (RQFII) quota, which iShares does through a U.K. subsidiary. Without a QFII/RQFII quota, funds attempting to track the A-shares market must usually do so through derivatives.

The proposed iShares fund will track the MSCI China A International Index, which covers the A-share stocks of mainland-China-domiciled companies that are listed on the Shanghai or Shenzhen stock exchanges, the prospectus said. The index is an all-cap benchmark that can include large-, mid- and small-cap components.

The fund’s closest competitor is likely the KraneShares Bosera MSCI China A ETF (KBA | F-60). KBA tracks what appears to be a similar MSCI index, but only covers the large- and mid-cap segments. The fund has less than $5 million in assets under management and comes with an expense ratio of 0.85 percent.

The real 900-pound gorilla in the A-shares space is the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR | D-52), which has accumulated more than $515 million in assets under management since launching less than a year ago. Its underlying index targets the 300 largest and most liquid shares on the Shenzhen and Shanghai stock exchanges.

However, that means it is primarily a large-cap index; the CSI 200 and CSI 500 indexes cover midcap and small-cap stocks, respectively. Investors looking for broader exposure to size segments could find a lot to like in the pending iShares fund.

The iShares filing did not include a ticker or expense ratio.




Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.