Bullish euphoria continues to drive price action on Wall Street as major equity indexes creep higher and higher, adding weight to the bears’ prediction for a steep correction by the day. With few economic data releases slated to hit the homefront this week, several issuers have already taken advantage of the calm seas; PIMCO, First Trust, Exchange Traded Concepts and Market Vectors all rolled out new ETFs on February 12, marking the first official “launch frenzy” of 2013 [see 3 Economic Charts Bears Love To Ignore].
Industry giant PIMCO added a currency fund to its growing lineup, bringing the total product count to 20 funds:
- Foreign Currency Strategy Exchange-Traded Fund (FORX): This actively-managed ETF costs 0.65% and invests in a
combination of short-term fixed-income notes, money market securities and currency forwards backed by high-quality, low-duration securities. The fund managers select the underlying basket of non-U.S. dollar holdings based on their evaluation of relative interest rates, inflation rates, exchange rates, and monetary and fiscal policies among other factors deemed to be relevant [see How To Invest Overseas Without Currency Risk].
Illinois-based First Trust added an actively-managed ETF to its arsenal aimed at income-hungry investors:
- Preferred Securities and Income ETF (FPE): This ETF charges 0.85% in management fees and offers exposure to preferred stocks, an asset class that has gained tremendous popularity among investors looking to tap into high yield without incurring handfuls of volatility. The fund managers will actively manage risk exposure to fluctuations in interest rates by controlling the duration of the underlying portfolio.
- Yorkville High Income Infrastructure MLP ETF (YMLI): This ETF costs 0.82% and delivers exposure to infrastructure MLPs, namely partnerships focused on the storage and transportation of energy commodities. The underlying portfolio is equal-weighted and holdings must meet certain criteria for inclusion, including a market capitalization greater than $1 billion and a three-month average daily trading volume of $4 million [see 101 High Yield ETFs For Every Dividend Investor].
- Market Vectors BDC Income ETF (BIZD): This ETF charges 0.40% in management fees and offers exposure to a basket of companies that provide financing to small, and often private, businesses. UBS also offers a strategy focused on business development companies through an ETN wrapper; BDCL has gained an impressive $84 million in assets under management since launching in mid-2011.
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