September was one of the most active months in the ETF industry in recent memory. We saw a wave of new fund launches from industry leaders and smaller players alike, along with perhaps the first of many commodity fund closures. September saw the introduction of another actively-managed ETF, proposals on several more innovative funds, and expanding product lines from many of the industry’s newest entrants.
New Fund Launches
A total of 12 new ETFs were launched in September, ranging from plain vanilla iShares ETFs to a physically-backed Swiss Gold ETF from ETF Securities to an actively-managed fund run by best-selling author and well-known investor Harry Dent. ETFs added to our ETF Screener this month include:
- ETFS Physical Swiss Gold Shares (SGOL): This ETF has already proven itself to be a viable competitor to GLD, accumulating $100 million in assets in its first month of trading.
- Three new funds from Pimco, including the 7-15 Year U.S. Treasury Index Fund (TENZ), 15+ Year U.S. TIPS Index Fund (LTPZ), and Broad U.S. TIPS Index Fund (TIPZ). Pimco now has five ETFs with a total market cap of almost $120 million. While this amount is minor compared to the iShares bond ETF portfolio, it appears that Pimco has found some traction in the space, and may become a more formidable competitor in coming months.
- Emerging Global Advisors Dow Jones Emerging Markets Financials Titans Index Fund (EFN): The first ETF to offer exposure to the financial sector of emerging market economies, EFN could represent the next wave of growth for the ETF industry.
- SPDR Wells Fargo Preferred Stock ETF (PSK): Preferred stock ETFs from iShares and PowerShares have been a hit among investors, bringing in about $1.3 billion in cash inflows through the first 8 months of the year. PSK is expected to compete directly with PGX anf PFF.
- Dent Tactical ETF (DENT) from AdvisorShares: This new ETF is co-managed by the “sage of doom and gloom,” Harry Dent, Jr. Dent analyzes changes in demographics and consumer spending patterns to select sectors and geographies he expects to outperform, a strategy that has produced both memorable successes and spectacular failures.
- United States Short Oil Fund (DNO): The sixth product from U.S. Commodity Funds, DNO will seek to track the inverse of crude oil prices by investing in futures contracts. DNO launches at an interesting time for the commodity fund industry, as regulators are looking to impose position limits on futures positions.
- Three new Russell Index ETFs From iShares, including the Russell Top 200 Index Fund (IWL), Russell Top 200 Growth Index Fund (IWY), and Russell Top 200 Value Index Fund (IWX): These large cap ETFs bring the number of iShares Russell indexes to 16.
- Thomson-Reuters Jefferies Commodity Equity Index Fund (CRBQ): This ETF invests in equities of commodities producers, providing exposure to commodity prices without using futures contracts or physically storing goods.
New ETF Pipeline
In addition to the new ETFs that launched this month, many ETF issuers have taken steps towards the introduction of innovative strategies and products. Some of the new products that could soon hit the market include:
- State-Specific ETFs, beginning with Texas and Oklahoma
- Build America Bond ETFs from PowerShares
- Sector-specific China and emerging markets ETFs from Global X
- More Shari’ah-compliant funds
September saw the first casualty of heightened regulations, as the PowerShares DB Crude Oil Double Long ETN (DXO) shut down due to what Deutsche Bank called a “regulatory event” related to “limitations imposed by the exchange.” It remains to be seen if this closure is an isolated incident, or if the fourth quarter will see a wave of exchange-traded commodity closures.
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Disclosure: No positions at time of writing.