Daily ETF Watch: Two ETFs Launch Today

Daily ETF Watch: Two ETFs Launch Today

KraneShares, PowerShares and AdvisorShares are bringing new funds to market this week.

Reviewed by: Hung Tran
Edited by: Hung Tran

KraneShares, PowerShares and AdvisorShares are bringing new funds to market this week.

KraneShares, AdvisorShares and First Trust are each bringing an ETF to market this week, most notably among them, the much-awaited A-Shares fund from KraneShares targeting stocks in mainland China.

One is the KraneShares Bosera MSCI China A Share ETF (KBA), which is launching today and will track the MSCI China A Index, a free-float-adjusted market-capitalization-weighted index that will give investors exposure to large-cap and midcap Chinese securities, according to a regulatory filing.

Also, AdvisorShares today is rolling out a multi-asset fund-of-funds ETF (YPRO) that will include both fixed income and equities to capture income at a time when investors are keen on finding decent yield in a low-interest rate market environment.

Finally, First Trust is bringing to market its Dorsey Wright Focus 5 ETF (FV) on March 6, which will track the Dorsey Wright Focus 5 Index and invest in ETFs that are in the index. The fund will list on the Nasdaq exchange.

This week's three launches raises to 42 the number of ETFs brought to market so far this year. About 1,570 ETFs now populate the universe of U.S.-listed ETFs, and total assets are now at a record $1.730 trillion, according to data compiled by ETF.com Analytics.

KraneShares Launch

KraneShares has teamed up with a local advisor, Bosera Asset Management, to gain direct access to the mainland market via an initial renminbi qualified foreign institutional investor (RQFII) quota of 1 billion RMB ($163 million).


“Renminbi qualified foreign institutional investor ETFs are a new breed of funds in the U.S., capable of directly holding mainland China-listed ‘A-shares,’ as opposed to using derivatives to capture the fairly restricted market,” ETF.com ETF specialist Dennis Hudachek wrote in a recent blog.

KBA has an annual expense ratio of 1.10 percent, or $110 for every $10,000 invested.

KraneShares’ latest offering follows the launch of the first-to-market db X-trackers Harvest CSI 300 China A-shares Fund (ASHR) last November. ASHR now has $157 million in assets under management, according to data compiled by ETF.com Analytics.

And with more offerings in the works from DB and Market Vectors, Hudachek said investors can expect a flood of mainland China-focused-ETF launches in the coming years.

AdvisorShares and First Trust Launches

YPRO, the yield-seeing ETF from AdvisorShares, will enter a market still characterized by the ultra-low yields that followed the market meltdown of 2008-2009.

Fund sponsors have been rolling out all kinds of income-seeking strategies focused on high-yield and emerging market debt; senior loans; payout-rich stocks; and multi-asset-class funds. YPRO’s ability to go short appears to add another fold in the multi-asset-class mix.

YPRO’s annual expense ratio is 1.42 percent, or $142 for every $10,000 invested. The ETF’s fees includes “acquired fund fees” of 0.40 percent, or $40 for every $10,000. Those cover the operating expenses of the underlying funds in its portfolio.

The First Trust Dorsey Wright ETF is a play on smart beta, whereby the index it tracks provides targeted exposure to the five First Trust sector-based ETFs based on relative strength indicators perfected by Dorsey Wright.

The fund’s fees weren’t immediately available.


Compass EMP Fund Filings

Brentwood, Tenn.-based Compass EMP Fund Trusts is currently prepping five smart-beta ETFs with volatility overlays, including the:

  1. Compass EMP U.S. 500 Volatility Weighted Index ETF
  2. Compass EMP U.S. Small Cap 500 Enhanced Volatility Weighted Index ETF
  3. Compass EMP U.S. 500 Enhanced Volatility Weighted Index ETF
  4. Compass EMP International 500 Enhanced Volatility Weighted Index ETF
  5. Compass EMP 100 High Dividend Enhanced Volatility Weighted Index ETF

The funds’ indexes include only companies with consistent positive earnings (at least the four most recent quarters), and is weighted based on the volatility of each stock, according to a regulatory filing. Stocks with lower volatility receive a higher weighting and stocks with higher volatility receive a lower weighting.

WBI Fund Filings

Additionally, Little Silver, N.J.-based WBI Investments has updated regulatory paperwork to include fees for 10 dividend bond and equity ETFs, including the:

  1. WBI SMID Tactical Growth Shares (WBIA)
  2. WBI SMID Tactical Value Shares (WBIB)
  3. WBI SMID Tactical Yield Shares (WBIC)
  4. WBI SMID Tactical Select Shares (WBID)
  5. WBI Large Cap Tactical Growth Shares (WBIE)
  6. WBI Large Cap Tactical Value Shares (WBIF)
  7. WBI Large Cap Tactical Yield Shares (WBIG)
  8. WBI Large Cap Tactical Select Shares (WBIL)
  9. WBI Tactical Income Shares (WBII)
  10. WBI Tactical High Income Shares (WBIH)

The funds aim to provide investors with tools to navigate the current ultra-low interest-rate environment.

With bond yields still at historical lows, using dividend-paying equities as a yield-replacement strategy continues to be a major investment theme for investors in 2014 as it was in 2013.

All of the proposed funds have annual expense ratios of 1.00 percent, or $100 for every $10,000 invested except for WBII and WBIH, which have fees of 1.05 percent, or $105 for every $10,000 invested, and 1.08 percent, or $108 for every $10,000 invested, respectively.

The filing didn't include proposed tickers or expense ratios.

Delisting Finalized

The NYSE Arca is delisting the Pox MSCI EAFE ESG ETF (EAPS | F-80) from its exchange, making March 21 the last day of trading for the shares of the fund.

The company previously announced it was folding the ETF into the Pox World International ESG Index Fund, an open-end mutual fund with the same strategy.

The strategy is based on an equity index of developed-market firms outside the U.S. and Canada that maintain high environmental, social and governance standards relative to their peers.


Hung Tran is a former staff writer for etf.com.