Daily ETF Watch: 5 Funds Launch

June 10, 2015

 

Direxion Unveils Hedged Int’l ETFs
Direxion Investments had jumped on the currency-hedged bandwagon with two funds of its own. The Direxion Daily MSCI Europe Currency Hedged Bull 2x Shares (HEGE) and the Direxion Daily MSCI Japan Currency Hedged Bull 2x Shares (HEGJ) provide 2x leveraged exposure to two currency-hedged benchmarks that target key areas for that strategy: Europe and Japan.

 

The $2.5 billion Deutsche X-trackers MSCI Europe Hedged Equity ETF (DBEU | B-64) tracks the same index as HEGE, while the $1.3 billion Deutsche X-trackers MSCI Japan Hedged Equity ETF (DBJP | B-76) tracks the same index as HEGJ.

 

Both funds come with an expense ratio of 1.06 percent.

 

The ETF 50
ETF Labs Trust has filed for a one-of-a-kind fund that will hold other ETFs. The ETF 50 fund will track the ETF Labs/ISE ETF 50 Index.

 

The fund will invest only in ETFs that are listed in the U.S. and have over $100 million in assets under management and a three-month trailing average daily value traded of $1 million. ETNs are not eligible for inclusion.

 

The fund’s index divides its components into equity and nonequity categories, selecting 25 funds from each category. Components are chosen, according to the prospectus, based on a composite ranking that takes into account fees, total returns and volatility. The index’s components are equally weighted during each quarterly review of the index, with an ETF’s individual weighting reset to 20 percent once it reaches 24 percent of the index.

 

While there are other fund-of-funds ETFs, there are none that have anything resembling a similar methodology.

 

ETF Labs Trust is headed by Samuel Masucci, who previously was the CEO of both MacroMarkets and Gencap Ventures. Despite the recent filing, it does not look like ETF Labs has filed an exemptive relief request of its own.

 

The filing did not include a ticker or expense ratio.

 

Active Alts
ETF newcomer Active Alts plans to launch a fund via ETF Issuer Solutions’ (ETFis) exemptive relief.

 

The Active Alts Long/Short U.S. Equity Fund (LGSH), not surprisingly, will be actively managed, with a strategy that looks at fundamentals such as liquidity, balance sheet strength, earnings outlook, industry trends, shareholder yield and trading patterns, among other attributes.

 

The fund will take 20 to 50 long positions in firms with favorable fundamentals that also are not included in the top 10 percent of their size categories in terms of market capitalization. Large-caps are defined as companies with market capitalizations above $5 billion, while midcaps fall into the $1 billion to $5 billion range.

 

Meanwhile, the fund’s short positions will target 20 to 50 companies exhibiting poor fundamentals.

 

LGSH comes with a rather hefty expense ratio of 1.85 percent.

 

The fund’s portfolio manager will be Active Alts founder Brad Lamensdorf. 

 

 

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