Coming & Going: February 2011

Published on by on February 1, 2011 | Updated April 24, 2013

January ETF Launches
Ticker ETF Assets
(In Millions)
Avg. Volume
VIXY ProShares VIX Short-Term Futures ETF $7 51,400
VIXM ProShares VIX Mid-Term Futures ETF $4 11,600
WDTI Wisdom Tree Managed Futures Strategy Fund $20 27,600
ALUM Global X Aluminum ETF $3 27,900
EWAC Rydex MSCI All Country World Equal Weight ETF $4 1,500
SCHH Schwab U.S. REIT ETF $12 77,700
SCHM Schwab U.S. Mid-Cap ETF $6 38,00
AGOL ETF Securities Physical Asian Gold Shares $47 5,800
IVO iPath Inverse January 2021 S&P 500 VIX Short-Term Futures ETN $18 34,300
EMVX Global X Russell Emerging Markets Value ETF $3 9,800
EMGX Global X Russell Emerging Markets Value ETF $2 8,800
BSJC Guggenheim BulletShares 2012 High Yield Corporate Bond ETF $5 3,700
BSJD Guggenheim BulletShares 2013 High Yield Corporate Bond ET $5 2,400
BSJE Guggenheim BulletShares 2014 High Yield Corporate Bond ETF $5 3,700
BSJF Guggenheim BulletShares 2015 High Yield Corporate Bond ETF $5 1,900
XTN State Street SPDR S&P Transportation ETF $5 11,100
XTL State Street SPDR S&P Telecom ETF $5 9,500
XHE State Street SPDR S&P Health Care Equipment ETF $5 7,900
HDGE AdvisorShares Active Bear ETF $7 323,200
TRNM RBS US Mid Cap Trendpilot ETN $4 3,700
EAPS Pax World Europe MSCI EAFE ESG Index ETF $3 1,300
VXUS Vanguard Total International Stock ETF $5 n/a

The ETF industry exploded out of the gate in 2011, as the month saw 22 new funds hit the market. Many of the products launched were aimed at more targeted sectors, and exploiting opportunities that many feel have yet to be properly tapped in the exchange traded world.

Similar to December, numerous products launched this month feature one-of-a-kind exposure, like the Active Bear Fund from AdvisorShares. The fund will feature purely short exposure with the added advantages of active management.

January saw Guggenheim issuers beef up their bond offerings, with unique products that aim to eliminate tracking error and other issues prevalent in the fixed income ETF space. Vanguard also shook up the industry, by offering an ultra-low cost competitor to a highly popular Ex-U.S. fund, as VXUS aims to chip away at the $800 million in assets that the iShares ACWX has obtained in the same investment field.

Several funds have already sunk their hooks into the industry, with AGOL nearing the $50 million in AUM mark, and HDGE maintaining an average daily trading volume of nearly 325,000.

Below, we take a closer look at each of the products that debuted in January:

January ETF Launches

ProShares VIX Short-Term Futures ETF (VIXY)

  • Launch: January 4
  • Asset Class: Volatility
  • Structure: ETF
  • Expense Ratio: 0.85%

Adding to the recent surge in VIX funds, VIXY tracks an index that measures the movements of a combination of VIX futures and is designed to track changes in the expectation for VIX over a specific time window in the future. This short-term fund  targets a weighted average term of one month, giving this fund a unique allocation compared to the VIX funds that are currently on the market.

ProShares VIX Mid-Term Futures ETF (VIXM)

  • Launch: January 4
  • Asset Class: Volatility
  • Structure: ETF
  • Expense Ratio: 0.85%

This ETF will seek to replicate an index which measures the movements of a combination of VIX futures and is designed to track changes in the expectation for VIX over a specific time window in the future. The specific window will focus on mid-term contracts in this ETF, which have an average maturity of five months.

WisdomTree Managed Futures Strategy Fund (WDTI)

  • Launch: January 5
  • Asset Class: Futures
  • Structure: Active ETF
  • Expense Ratio: 0.95%

This ETF will measure an index which is a widely-used indicator designed to capture the economic benefit derived from rising or declining price trends in the markets for commodity, currency and U.S. treasury futures. The new actively-managed ETF will employ a quantitative, rules-based strategy designed to provide returns that correspond to the performance of the Diversified Trends Indicator (DTI). The DTI is a long/short managed futures strategy that incorporates a diversified group of 24 liquid components of exchange-traded commodity and financial futures contracts.

WisdomTree Managed Futures Strategy Fund (ALUM)

  • Launch: January 6
  • Asset Class: Commodity
  • Structure: ETF
  • Expense Ratio: 0.69%

This fund will seek to replicate the performance of the Solactive Global Aluminum Index, a benchmark that consists of companies that are active in some aspect of the aluminum industry, such as bauxite aluminum ore mining, production, or refinement. Aluminum, once a precious metal more valuable than gold, is now widely used in a variety of industrial applications ranging from automobiles to construction to aviation. The world’s aluminum production comes largely from emerging markets, and subsequently, this ETF has significant emerging market exposure.

Rydex MSCI All Country World Equal Weight ETF (EWAC)

  • Launch: January 12
  • Asset Class: Equity
  • Structure: Equal Weight ETF
  • Expense Ratio: 0.60%

EWAC will track the MSCI All Country World Equal Weighted Index, which is a free float-adjusted equal weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI Index consists of 45 country indexes comprising 24 developed and 21 emerging market country benchmarks and will provide investors with an alternate option for global equity exposure. Generally, equal weight ETFs offer enhanced diversification relative to market cap-weighted products, since the largest companies aren’t able to dominate the underlying portfolio.

Schwab U.S. REIT ETF (SCHH)

  • Launch: January 13
  • Asset Class: Real Estate
  • Structure: REIT ETF
  • Expense Ratio: 0.13%

This ETF will measure and index that is comprised of companies whose charters are the equity ownership and operation of commercial real estate and which operate under the REIT Act of 1960. This is a broad based fund, which particularly benefits traders with a Schwab account, as it can be traded commission free.

Schwab U.S. Mid-Cap ETF (SCHM)

  • Launch: January 13
  • Asset Class: Real Estate
  • Structure: REIT ETF
  • Expense Ratio: 0.13%

SCHM will track the Dow Jones U.S. Mid-Cap Total Stock Market Index, which is a float-adjusted market capitalization weighted index that reflects the shares of securities of the mid cap portion of the Dow Jones U.S. Total Stock Market index actually available to investors in the marketplace. The Mid-Cap Index includes the components ranked 501-1000 by full market capitalization. Like SCHH this fund will also be offered commission free to all traders using Schwab.

Physical Asian Gold Shares (AGOL)

  • Launch: January 14
  • Asset Class: Commodity
  • Structure: ETF
  • Expense Ratio: 0.39%

This ETF is designed to track the spot price of gold bullion, giving investors exposure to gold in a particular region of the globe. For investors who are growing increasingly concerned about the debt issues in the Western world, gold storage in the Asia-Pacific region is becoming an increasingly attractive option. However, many Asian nations cannot match the level of security and stability that is present in the Swiss market which has forced many to postpone an Asian gold storage plan until now.

iPath Inverse January 2021 S&P 500 VIX Short-Term Futures ETN (IVO)

  • Launch: January 20
  • Asset Class: Volatility
  • Structure: ETN
  • Expense Ratio: 0.89%

IVO will track an index that is designed to provide investors with exposure to one or more maturities of futures contracts on the VIX, which reflects implied volatility of the S&P 500 Index at various points along the volatility forward curve. The benchmark offers exposure to a daily rolling long position in the first and second month VIX Index futures contracts, rolling exposure to the underlying futures contracts continuously throughout each month and targeting a constant weighted average maturity of one month. The investment thesis behind inverse VIX funds comes from the fact that VIX-based funds generally lose value over time, and an inverse fund should theoretically continue to gain in the long-run.

Global X Russell Emerging Markets Value ETF (EMVX)

  • Launch: January 25
  • Asset Class: Emerging Markets
  • Structure: ETF
  • Expense Ratio: 0.69%

Global X’s EMVX will seek to replicate an index that is designed to measure equity market performance of the largest value companies in the global emerging markets, as defined by Russell. This fund will use the concept of value  investment strategies with emerging markets exposure, becoming the first emerging markets ETF to explicitly offer a style tilt. Value fund tend to hold securities with low P/E ratios, high dividends, and low debt to equity ratios.

Global X Russell Emerging Markets Value ETF (EMGX)

  • Launch: January 25
  • Asset Class: Emerging Markets
  • Structure: ETF
  • Expense Ratio: 0.69%

This fund will track the Russell Emerging Market MegaCap Growth Index, which is designed to measure equity market performance of the largest growth companies in the global emerging markets, as defined by Russell. This growth ETF will hold about 142 securities at launch, and will heavily weight the financials sector. Value fund tend to hold securities with low P/E ratios, high dividends, and low debt to equity ratios.

Guggenheim BulletShares 2012 High Yield Corporate Bond ETF (BSJC)

  • Launch: January 26
  • Asset Class: Fixed Income
  • Structure: ETF
  • Expense Ratio: 0.69%

These ETFs will track the BulletSharesUSD High Yield Corporate Bond Indices developed by Accretive Asset Management LLC. “By creating a separate index for each year of maturity–and then keeping every bond in the index until maturity, unless it otherwise fails to meet the index criteria–BulletShares indices allow for the creation of diversified bond portfolios that have cash flow profiles similar to those of an individual bond. Not only do investment products based on BulletShares indices help financial advisors manage their clients’ future cash flow needs by providing a known maturity date, they also allow financial advisors to dynamically hedge their future liability” said Matthew Patterson of Accretive about the release of this line of new fixed income funds.

Guggenheim BulletShares 2013 High Yield Corporate Bond ETF (BSJD)

  • Launch: January 26
  • Asset Class: Fixed Income
  • Structure: ETF
  • Expense Ratio: 0.69%

These ETFs will track the BulletSharesUSD High Yield Corporate Bond Indices developed by Accretive Asset Management LLC.

Guggenheim BulletShares 2014 High Yield Corporate Bond ETF (BSJE)

  • Launch: January 26
  • Asset Class: Fixed Income
  • Structure: ETF
  • Expense Ratio: 0.69%

These ETFs will track the BulletSharesUSD High Yield Corporate Bond Indices developed by Accretive Asset Management LLC.

Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (BSJF)

  • Launch: January 26
  • Asset Class: Fixed Income
  • Structure: ETF
  • Expense Ratio: 0.69%

These ETFs will track the BulletSharesUSD High Yield Corporate Bond Indices developed by Accretive Asset Management LLC.

SPDR S&P Transportation ETF (XTN)

  • Launch: January 26
  • Asset Class: Equity
  • Structure: ETF
  • Expense Ratio: 0.35%

This ETF tracks the S&P Transportation Select Industry Index, which represents the transportation sub-industry portion of the S&P Total Stock Market Index. State Street’s approach is designed to provide a fund with low portfolio turnover, accurate tracking, and lower costs than its competitors. The fund will feature major names in its top holdings like Ryder System, Hertz Global, and Avis Budget Group and may be a good addition to a portfolio for investors looking to take advantage of the world’s heavy dependence on the transportation sector.

SPDR S&P Telecom ETF (XTL)

  • Launch: January 26
  • Asset Class: Equity
  • Structure: ETF
  • Expense Ratio: 0.35%

XTL will seek to closely match the returns and characteristics of the S&P Telecom Select Industry Index. Top holdings of this fund will include Motorola, Verizon Wireless, and Oclaro Inc. XTL will give a broad range of exposure to the telecom sector, with both large and small cap funds making up the top holdings. With the exploding growth of the smartphone industry, this fund may give investors the tools to take advantage of this surging sector.

SPDR S&P Health Care Equipment ETF (XHE)

  • Launch: January 26
  • Asset Class: Equity
  • Structure: ETF
  • Expense Ratio: 0.35%

This ETF will track and index which represents the health care equipment and supplies sub-industry portion of the S&P Total Stock Market Index. Health care funds present an enticing opportunity as the baby boomers grow older. Many feel that there will be a spike in health care needs for the quickly aging generation, causing health care based funds to soar.

Active Bear ETF (HDGE)

  • Launch: January 27
  • Asset Class: Equity
  • Structure: Active ETF
  • Expense Ratio: 1.85%

HDGE is a fund that seeks capital appreciation through short sales of U.S. stocks. The fund is sub-advised by Ranger Alternative Management, and the management team will employ a bottom-up, fundamental, research-driven security selection process. To identify which securities to short, the fund will use forensic accounting; seeking out those with low earnings qualities and aggressive accounting that may be intended to mask operational deterioration and boost reported earnings in the short term. This fund will give investors access to active short exposure, without being subject to the risks of physically shorting a security.

RBS US Mid Cap Trendpilot ETN (TRNM)

  • Launch: January 27
  • Asset Class: Equity
  • Structure: ETF
  • Expense Ratio: 1.00%

This fund from RBS, will measure an index which utilizes a systematic trend-following strategy to provide exposure to either the S&P Midcap 400 Total Return Index or the yield on a hypothetical notional Investment in 3-month U.S. Treasury bills. The fund will assess its holdings based on 200-day moving averages and decide what to buy or sell based on a more technical approach, making this an attractive opportunity for investors who employ a technical trading method. The fund’s expenses will work in a unique manner; based on where the 200-day moving average lies, this ETF may invest in treasury bills, in which case the expenses fall to 0.50%, or it may invest in the respective index, in which case the expenses will be the full 1.00%.

Europe MSCI EAFE ESG Index ETF (EAPS)

  • Launch: January 28
  • Asset Class: EAFE
  • Structure: ETF
  • Expense Ratio: 0.55%

This fund from Pax World will seek to replicate the performance of the MSCI EAFE ESG Index. This benchmark consists of stocks in the Europe, Australasian, and Far East regions that meed certain environmental, social, and governance criteria. EAPS will be the first ETF based on a sustainability or ESG-based index to target the EAFE region.

Vanguard Total International Stock ETF (VXUS)

  • Launch: January 28
  • Asset Class: Global Ex-U.S. Equity
  • Structure: ETF
  • Expense Ratio: 0.20%

VXUS will track an index that measures the investment return of stocks issued by companies located outside the United States. The new ETF is a separate share class of the Vanguard Total International Stock Index Fund, which has been around since 1996. With more than $50 billion in assets, that fund is Vanguard’s second largest. This fund continues Vanguard’s low cost trend as they release yet another ETF that undercuts its main competitor by a substantial amount.

ETF Closings

No ETFs closed during the month of January.

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