May was a tumultuous month for equity markets, as instability around the world pushed and pulled on major indexes through the last several weeks. Perhaps the biggest news of the month was the re-emergence of the European debt crisis; with Greece in yet another dire situation, many investors are concerned about the overall stability of the euro. Aside from global affairs, the ETF industry made quite a splash in May thanks to an incredible level of activity on the product development front. Following April’s 43 new launches was a tall task, but the industry came close to matching the impressive total from the previous month; May saw 39 new products debut, making the month the second busiest of the year and one of the busiest ever for the exchange-traded product space.
ETFs that began trading in May include:
- Global X debuted six new products to give investors access to brand new asset classes through the ETF wrapper. May saw the introduction of the Food ETF (EATX), Fishing Industry ETF (FISN), Mexico Small-Cap ETF (MEXS), Auto ETF (VROM), Canada Preferred ETF (CNPF), and the Fertilizers/Potash ETF (SOIL) [see Global X Debuts Fertilizer ETF (SOIL)].
- IndexIQ released a fund that allows investors to invest in the small cap sector of the global oil industry, rolling out the IQ Global Oil Small Cap ETF (IOIL). The product seeks to replicate the IQ Global Oil Small Cap Index, a benchmark that consists of about 60 small cap oil companies from more than a dozen emerging and developed economies [see IndexIQ Debuts Global Oil Small Cap ETF (IOIL)]. Later in the month IndexIQ debuted the first-to-market IQ Hong Kong Small Cap ETF (HKK), which offers small cap exposure to a market that is often seen as an indirect play on China.
- PowerShares rolled out a pair of high beta and low volatility products this month, giving investors new tools for accessing strategies that have been popular for decades. The S&P 500 High Beta Portfolio (SPHB), and S&P 500 Low Volatility Portfolio (SPLV) both debuted, and could signal the launch of a broader suite of PowerShares funds [see PowerShares Debuts High Beta, Low Volatility ETFs]. Later in the month, PowerShares brought two more products to market through its partnership with Deutsche Bank: the 3x Long U.S. Dollar Index Futures ETN (UUPT) and the 3x Short U.S. Dollar Index Futures ETN (UDNT) [see PowerShares, Deutsche Team Up On Leveraged Dollar ETNs]. Finally, Powershares released the Convertible Securities Portfolio (CVRT), in the final days of May to close out a busy stretch for one of the largest issuers.
- First Trust launched the first exchange traded product to exclusively track the global automobile industry; the NASDAQ Global Auto Index Fund (CARZ) will invest in about 30 companies from developed and emerging markets, including Japan, Germany, the U.S., and China [see First Trust Wins Auto ETF Race, Debuts CARZ]. Later in the month, the issuer rolled out another quant-based AlphaDEX fund, the new Mega Cap AlphaDEX Fund (FMK).
- Van Eck launched the first ever fund that focuses solely on Latin American debt markets, the Market Vectors LatAm Aggregate Bond ETF (BONO). BONO includes allocations to several Latin American countries, with Brazil accounting for about 37% of the underlying index. Other countries comprising the benchmark include Mexico (29%), Colombia (12%), Venezuela (7%), and Argentina (4%). Chile, Peru, Panama, Jamaica, and Uruguay [see Van Eck Debuts Latin America Bond ETF (BONO)].
- Russell launched a total of 16 new products this month: Growth At A Reasonable Price ETF (GRPC), Contrarian ETF (CNTR), Equity Income ETF (EQIN), Low P/E (LWPE), Aggressive Growth ETF (AGRG), Consistent Growth ETF (CONG), Russell 1000 Low Beta ETF (LBTA), Russell 1000 High Beta ETF (HBTA), Russell 1000 Low Volatility ETF (LVOL), Russell 1000 High Volatility ETF (HVOL), Russell 1000 High Momentum ETF (HMTM), Russell 2000 Low Beta ETF (SLBT), Russell 2000 High Beta ETF (SHBT), Russell 2000 Low Volatility ETF (SLVY), Russell 2000 High Volatility ETF (SHVY), and finally the Russell 2000 High Momentum ETF (SHMO) [see Russell Debuts Slew Of Factor ETFs].
- iShares, the largest ETF issuer by assets, rolled out two new inflation focused products for investors looking to protect portfolios from inflationary environments: the International Inflation-Linked Bond Fund (ITIP) and Global Inflation-Linked Bond Fund (GTIP) [see iShares Rolls Out International TIPS ETFs].
- Direxion, known for its lineup of leveraged funds, released four new leveraged products to offer plays on Russia and the agribusiness sector: Daily Russia Bull 3x Shares (RUSL), Daily Russia Bear 3x Shares (RUSS), Daily Agribusiness Bull 3x Shares (COWL), and Daily Agribusiness Bear 3x Shares (COWS) [see Direxion Launches Leveraged Russia, Agribusiness ETFs].
- UBS rolled out the E-TRACS 2x Leveraged Long Wells Fargo Business Development Company ETN (BDCL), a monthly leveraged version of the BDC ETN that debuted in April [see UBS Adds 2x Leveraged Version of BDC ETN (BDCL)].
May saw a fair number of potential ETFs hit the SEC’s desk, keeping the ETF pipeline full:
- Van Eck unveiled plans for four new products, including the Market Vectors Business Development Company/Specialty Finance ETF, a Municipal Bond Closed-End Fund ETF, a Mortgage REIT ETF, and finally, the first ever ETF to offer exposure exclusively to Mongolia [see Van Eck Plans Mongolia ETF].
- ALPS has laid the groundwork for a “plus” version of its ultra popular Alerian MLP ETF (AMLP). The proposed new version will seek to eliminate tracking error by borrowing money to invest in MLP securities [see ALPS Plans “Plus” Version Of MLP ETF].
- Guggenheim released plans for an the Enhanced Adjustable Rate Senior Loan ETF, which would seek to outperform the Credit Suisse Leveraged Loan Index [see Guggenheim Plans Active Senior Loan ETF].
- AdvisorShares announced its plans for the Accuvest Global Opportunities ETF (ACCU), which would be sub-advised by Accuvest Global Advisors. The fund will be an “ETF-of-ETFs”, investing in other exchange traded products to generate its returns [see ETF Pipeline: AdvisorShares, Accuvest Team Up on Global ETF].
- Direxion filed for a slew of India ETFs to include: IndiaShares Fixed Income Shares, IndiaShares Mid & Small Cap Shares, IndiaShares Consumer Shares, IndiaShares Energy & Utility Shares, IndiaShares Financial Shares, IndiaShares Industrial Shares, IndiaShares Infrastructure Shares, IndiaShares Materials Shares, and IndiaShares Technology & Telecommunication Shares [see Direxion Plans Slew Of India ETFs].
- Rydex laid the groundwork to expand its equal weight methodology by filing for the S&P SmallCap 600 Equal Weight ETF and S&P MidCap 400 Equal Weight ETF [see ETF Filings: Real Return, Equal Weighting, Mortgage REIT Funds On Tap].
- After making a bang with their entrance to the ETF field, Russell also detailed plans for a Real Return ETF that would seek to “exceed the rate of inflation over an economic cycle” [see ETF Filings: Real Return, Equal Weighting, Mortgage REIT Funds On Tap].
- First Trust added to its pipeline by announcing details for the First Trust North American Energy Infrastructure Fund, which will be an active ETF that could include common stocks, depository receipts, and MLPs [see First Trust Plans Active Energy Infrastructure ETF].
- PowerShares closed out a busy month by announcing its plans for nine new RAFI funds, some of which include Fundamental Pure Small Core Portfolio (PXSC), Fundamental Pure Mid Growth Portfolio (PXMG), and Fundamental Pure Large Value Portfolio (PXLV) [see PowerShares Plans RAFI ETF Push].
While May was one of the busiest months ever for the ETF industry, it also saw the first ETP closing of the year.
- The Barclays ETN+ Short D Leveraged Inverse S&P 500 TR ETN (BXDD) which is linked to the S&P 500 Total Return Index, was called for redemption after the indicative value fell to a price point that triggers such a move. BXDD’s poor performance set off an automatic repurchase by the issuing institution, forcing this fund to officially close its doors after roughly a year and a half of trading [see Leveraged S&P 500 ETN (BXDD) To Shut Down].
Disclosure: Photo courtesy of David Monniaux. No positions at time of writing.