ETF Watch: July 3 – July 10

July 10, 2008

  • Page 1: New ETF listings
  • Page 2: ETF industry statistics including weekly performance update
  • Page 3: The complete list of ETFs (and ETNs) in registration

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PowerShares Launches Second Frontier ETF

On July 9, PowerShares rolled out the PowerShares MENA Frontier Countries Portfolio (NASDAQ: PMNA) on the Nasdaq stock market.

The new fund tracks the NASDAQ OMX Middle East North Africa Index, which currently covers Kuwait, Bahrain, Qatar, the United Arab Emirates, Oman, Lebanon, Egypt, Jordan, Morocco and Nigeria. The index is weighted by modified market capitalization.

The Claymore/BNY Mellon Frontier Markets ETF (AMEX: FRN) was launched a short time ago, but it's focus is global rather than regional, so it covers more markets. Because of its geographic focus, PMNA will likely be strongly influenced by oil markets – four of the countries represented in the fund are OPEC members.

The new PowerShares ETF charges 0.95%, with a waiver that brings the actual price down to 0.70%.

Read the prospectus here.



SSgA Files For Commercial Paper ETF

State Street Global Advisors has filed for an ETF covering commercial paper, which is basically short-term unsecured corporate debt. The fund will track the S&P Commercial Paper Index, which tracks the U.S. one-to three-month commercial paper market. The index covers corporate issuers with a maximum program size of at least $2 billion and excludes asset-backed commercial paper. It is weighted by program size.

Because it has a maturity of less than 270 days, commercial paper does not need to be registered with the SEC, which reduces costs for the issuer.

Read the prospectus here.

Claymore Plans Global Shipping ETF

Claymore recently filed to launch the Claymore/Delta Global Shipping ETF. The fund will track an index of companies involved in the maritime shipping industry that are listed on developed-market exchanges. The underling index, provided by Delta Global Indices LLC, includes 30 pure-play companies that derive at least 80% of their revenues from operating or leasing ships or from the transportation of goods via ship.

Components must have at least $250 million in market capitalization and a 30-day average daily trading volume of at least $2 million. They are weighted by modified market capitalization.

According to the Round Table of International Shipping Associations, more than 90% of world trade is transported via ship. PowerShares and SSgA both have transportation ETFs in registration, but this seems to be the first filing to cover the maritime shipping industry specifically.

Read the prospectus here.

ETSpreads Makes Interesting Filing

Earlier this year a new prospective ETF provider showed up on the scene with a filing for four ETFs tracking credit default swap (CDS) contracts; the underlying indexes were originally supposed to be from CDS IndexCo, part of the Markit Group.

Now the firm has filed for four similar funds, except these new ones are actively managed. It's not clear if the new filing is separate or a revision of the one we reported back in February. (Read that ETF Watch here.)

The four funds listed in the filing are the ETSpreads High Yield CDS Tighten Fund, the ETSpreads High Yield CDS Widen Fund, the ETSpreads Investment Grade CDS Tighten Fund and the ETSpreads Investment Grade CDS Widen Fund. The performance of the funds is supposed to reflect the performance (or the inverse of the performance) of their designated credit markets, but it's not clear how that performance will be determined, given that these funds are not tied to an index. The "Tighten" funds track the designated market's actual performance, while the "Widen" funds are designed to capture the inverse of the market's performance.

CDS contracts are contracts offering insurance for bonds. If the bonds go bust, the CDS contracts guarantee full payment to the bondholders.

The funds will list on the NYSE Arca exchange and charge expense ratios of 0.49%.

Read the prospectus for the funds here.


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