October was another busy month for the ETF industry, with the launch of several new funds, including a handful that will compete directly with well-established ETFs and some that seek to address potential regulatory issues facing traditional commodity products. Highlights from the month included:
- Claymore, in partnership with AlphaShares, launched the China All-Cap ETF (YAO), the first fund to offer exposure to China across all market capitalizations. Prior to the launch of YAO, China ETFs were generally dominated by holdings in mega cap companies or focused exclusively on small cap firms. YAO has already proven to be tremendously popular, accumulating more than $65 million in assets in its first month.
- IndexIQ, the firm behind the first ever hedge fund ETF, launched two additional products designed to protect against inflation. The IQ CPI Inflation Hedged ETF (CPI) and IQ ARB Global Resources ETF (GRES) hit the market at a time when investors are increasingly concerned about how to best protect their assets from the potential ravages of inflation.
- UBS launched the E-TRACS DJ-UBS Commodity Total Return ETN (DJCI), a broad-based commodity product that will compete directly with iPath’s DJP.
- OOK Advisors launched the first state-specific ETF with a fund focusing on companies headquartered in Oklahoma. OOK Advisors also has plans for a Texas-only fund that should be launched sometime in the fourth quarter.
New Product Pipeline
In addition to the funds that actually launched during the month, several issuers announced plans for future products covering all varieties of asset classes and investment strategies. New ETFs discussed in October included:
- Jefferies is planning to launch two ETFs, including a fund that invests in equities of companies engaged in the natural gas industry and a wildcatters ETF.
- Grail Advisors is planning to expand its line of actively-managed ETFs into the fixed income space, announcing plans for two municipal bond ETFs.
- iShares continues to look to expand its product platform, reportedly considering new bond products as well as a Chile ETF.
- Pax World Management is planning a line of ETFs that invest in companies with favorable ESG criteria – environmental, social, and governance factors.
- ProShares is planning to expand its line of leveraged ETFs with 200% funds focusing on 7-10 Year Treasuries and 20+ Year Treasuries.
- ETF Securities, which has already completed extremely successful launches of silver and gold ETFs, is now planning a physically-backed palladium fund. Such an ETF would be a first for the U.S. market.
ETFs Changing Focus
Beyond new fund filings, October saw some transitions of existing products. Among the new developments:
- PowerShares announced that its listed Private Equity Portfolio (PSP) would broaden its scope to track a global benchmark, adding private equity firms in the UK, France, Sweden, and several other countries.
- Deutsche Bank announced that it would significantly expand the commodities baskets underlying two of the most popular exchange-traded commodity products. The agriculture-focused DBA increased the number of products it tracks from four to 11, while DBC added eight new holdings including crude oil, copper, natural gas, and silver.
- PowerShares also announced that the index underlying its Golden Dragon Halter USX China Fund (PGJ) had expanded by adding 20 additional equities.
Disclosure: No positions at time of writing.