This year has been healthy for ETF launches. Of the 1,945 ETFs on the market today, 140 of them began trading this year.
Of course, launching a fund is just the first step. Attracting assets is another matter entirely. In an increasingly crowded space with ETFs of all stripes already available, it's become difficult for issuers to differentiate their products and make an impression on investors.
That's why out of the host of funds that launched this year, only a handful have attracted assets of any significance. Only seven, or 5% of this year's launches, have eclipsed the $100 million mark in assets under management.
Here we take a look at five of the most successful launches of the year:
UBS AG FI Enhanced Europe 50 ETN (FIEE)
Launched in February, the UBS AG FI Enhanced Europe 50 ETN (FIEE) is a successful product by any measure. In its six short months on the market, it's already picked up $384 million in assets.
Created for investment advisor Fisher Investments, much of the assets in the ETN are likely from the firm.
FIEE is a geared product that provides 2x-leveraged exposure to the Stoxx Europe 50 Index. Unlike most leveraged products, FIEE's leverage resets quarterly, not daily. This makes the ETN more suitable for somewhat longer holding periods as a bullish bet on European mega-cap stocks.
That's a bet that's paid off so far, with FIEE rising 11.1% since its inception in February, compared with a 6.4% gain for the SPDR Stoxx Europe 50 ETF (FEU), which provides vanilla exposure to the same underlying index (incidentally, for the year as a whole, FEU is down 2.9% amid concerns about “Brexit” and the European economy more broadly).
Returns For FIEE, FEU Since Feb. 18
WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM)
This year hasn't been a good one for currency-hedged products. By and large, the most popular area of the ETF market last year is out of favor with investors in 2016 as the bull run in the dollar stalls.
But there is one exception: the WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM), which has gathered an impressive $262 million in assets to-date.
As is typical of WisdomTree products, DDWM weights its holdings based on dividends. The fund provides international stock exposure, just like its sister funds, the vanilla WisdomTree International Equity Fund (DWM) and the 100% hedged WisdomTree International Hedged Equity Fund (HDWM).
DDWM differentiates itself by providing dynamic currency exposure to the same basket of developed market equities (excluding the U.S., Canada and South Korea) as the other funds. It adjusts its currency hedging from anywhere from zero to 100% based on "a combination of momentum, value and interest rate factors."
Since its inception in January, DDWM's dynamic currency-hedging methodology has done pretty well. In that period, the fund is up almost 7%, only slightly less than the vanilla DWM, but much more than the 1% return for the fully hedged HDWM.