First Trust Plans Dividend ETFs, State Street Files For Corporate Bond Funds

by on February 24, 2012

Investors on Wall Street have endured another tumultuous week as domestic indexes have been flirting with historically significant resistance levels while developments in the financially fragile Euro zone appear to be progressing towards stability [see Is SPY Overbought?]. Despite the back-and-forth price action in the stock market, issuers have continued to fill the product pipeline with exciting offerings; First Trust and State Street have both filed with the SEC for several intriguing products to come.

First Trust, the issuer behind the AlphaDEX product lineup, has filed with the SEC to bring to market several dividend-focused equity funds along with a commodity ETF [see also AlphaDEX ETFdb Portfolio]:

  • First Trust Dividend AlphaDEX Fund: This ETF will seek to replicate the price and yield performance of the Defined U.S. Dividend Index. The underlying index is a modified equal-dollar weighted index designed by Standard and Poor’s to objectively identify and select securities from the S&P U.S. BMI Index, using the rules-based AlphaDEX methodology, that may generate positive alpha relative to traditional passive indexes [see SEC Filing].
  • First Trust Emerging Markets Dividend AlphaDEX Fund: This ETF will seek to replicate the price and yield performance of the Defined Emerging Markets Dividend Index. This fund will also employ the AlphaDEX methodology to select its holdings from the S&P Emerging Markets BMI Index.
  • First Trust International Dividend AlphaDEX Fund: This ETF will also use the AlphaDEX methodology to objectively identify and select securities from the S&P Developed ex-U.S. BMI Index, which is comprised of over 5,000 stocks from developed markets, excluding U.S. companies.
  • First Trust Global Commodity AlphaDEX Fund: This ETF will seek to replicate the price and yield performance of the StrataQuant Global Commodity Index. The underlying index will employ the AlphaDEX methodology to objectively identify and select securities from the precious metal, base metal, agriculture, and energy sectors.
Industry giant State Street has laid out the groundwork for launching two corporate bond ETFs [see SEC Filing]:
  • SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (EMCD): The underlying index of this ETF will track the emerging market senior and secured corporate debt market. The holdings will consist of dollar-denominated debt securities traded in the U.S. and Eurobond markets.
  • SPDR BofA Merrill Lynch Crossover Corporate Bond ETF (XOVR): This ETF will be linked to an index that tracks the U.S. crossover corporate bond market. The crossover bond market consists of debt securities rated at levels where the lower end of the investment grade debt and the higher end of the high yield debt meet. Holdings will include U.S. dollar-denominated BBB and BB rated debt notes [see also Better-Than-AGG Total Bond Market ETFdb Portfolio].

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Disclosure: No positions at time of writing.