iShares Files For Target Maturity ETFs, EG Shares Plans Active Fund

by on February 1, 2013 | ETFs Mentioned:

Bullish momentum on Wall Street took a back seat this week as domestic economic uncertainty came to the forefront once again. The Federal Reserve indicated that economic activity has “paused in recent months,” and therefore it will continue its massive bond-buying program. To add insult to injury, U.S. GDP came in unexpectedly at an anemic 0.1% decline, further hammering down investor confidence. As many scrambled to their favorite safe haven investments, Credit Suisse’s launch of their new Gold Shares Covered Call ETN (GLDI) was perhaps timed perfectly. Meanwhile, issuers continue to fill the product pipeline, trying to meet the demands of investors looking for more lucrative opportunities. First Trust, iShares and Emerging Global were among the issuers filing proposals with the SEC this week [see ETF Database Launch Center]. 

Industry veteran iShares has filed for yet another equity ETF linked to an MSCI benchmark, along with a suite of maturing corporate bond funds:

  • iShares MSCI USA Momentum Index Fund: This ETF will be based on the broader MSCI USA Index, choosing those securities that show higher momentum. The SEC filing went on to state that its price momentum calculations will be based on daily local returns over the previous 6-12 months.
  • iShares Investment Grade Corporate Bond & Investment Grade Corporate Bond Multi-Sector Bond ETFs: These ETFs will invest in U.S. dollar-denominated, investment-grade securities publicly issued by U.S. and non-U.S. corporate issuers. The funds are target-date maturity, expiring in 2013, 2018, 2020 and 2023.

First Trust has laid down the groundwork for an intriguing actively-manged ETF:

  • First Trust Enhanced Low Beta Income ETF: This ETF will invest primarily in U.S.-listed equities and will also offer exposure to international securities that trade on U.S. exchanges. The SEC Filing stated that the fund will also consist of call option on the S&P 500 Index aimed at generating extra income from monthly premium payments. Holdings will be selected using a mathematical optimization process, which seeks to target higher dividend-paying securities.

Emerging Global has filed for the their very first actively-managed fund. In addition, the issuer has requested an exemptive relief in order to market active strategies that would use derivatives among other financial instruments [see Emerging & Frontier Markets ETFdb Portfolio]:

  • EGShares Emerging Markets Active ETF: This ETF will offer broad-based exposure to the emerging equities market, selecting securities from countries that have at least $1 billion in market capitalization. According to the SEC filing, the fund will invest 80% of its net assets in equities and up to 20% in other types of securities, such as currencies, mortgage- or asset-backed securities, depository receipts, and other derivatives.

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Disclosure: No positions at time of writing.