iShares, FlexShares, And WisdomTree Fill ETF Pipeline

by on September 13, 2013

The bulls returned on Wall Street this week after easing concerns over Syria and encouraging news from China pushed major U.S. equity indexes higher. On the home front, the Labor Department reported that initial jobless claims fell to 292,000 – the lowest level since 2006. Meanwhile in China, exports were reported to have risen 7.2% in August from a year prior; industrial output also beat expectations, rising 10.4%. Next week, however, investors will be keeping a close eye on the Fed’s policy-setting meeting  [see The Best (And Worst) Performing ETFs For Every Quarter].

On the ETF front, three issuers filed regulatory paperwork with the SEC to introduce a slew of new exchange-traded products.

iShares‘ announced that it plans to launch four new actively managed ETFs to beef up its “Core” lineup. All of these ETFs will be “funds of funds,” meaning they will invest in other ETFs:New ETFs

  • Core Allocation Conservative ETF: This fund features a “conservative risk” allocation strategy, which emphasizes significant exposure to fixed income securities, while maintaining smaller allocations to equities.
  • Core Allocation Moderate ETF: This ETF will seek to offer a “moderate” risk allocation. Currently, the underlying funds include iShares’ Core Long-Term U.S. Bond ETF (ILTB, B), Core MSCI Emerging Markets ETF (IEMG, A), and the Core MSCI Total International Stock ETF (IXUS, A) [see The Complete Visual History of SPY].
  • Core Allocation Moderate Growth ETF: Using a “moderate growth” strategy, this fund will focus more on small and mid cap ETFs, including the Core S&P Mid-Cap ETF (IJH, A-) and the Core S&P Small-Cap ETF (IJR, A-).
  • Core Allocation Growth ETF: This fund will offer similar exposure to the Core Allocation Moderate Growth ETF, but will be more skewed toward “riskier” growth ETFs.

The new “Core” ETFs look quite similar to iShares’ “target risk” funds AOA, AOK, AOM, and AOR - the difference being that the new funds will be actively managed.

Chicago-based FlexShares also filed regulatory paperwork to add a new global real estate fund to its lineup:

  • Global Quality Real Estate Index Fund: This fund will track the Northern Trust Global Quality Real Estate Index, which is designed to provide exposure to a portfolio of high-quality publicly-traded equity securities of real estate investment trusts (REITs) and real estate companies that own and operate commercial or residential real estate. According to the filing, the fund will feature exposure to a wide array of countries including Australia, China, Finland, Greece, Israel, Italy, Luxembourg, Singapore, and the U.K.. 

WisdomTree has released its plans to introduce three new currency funds to its lineup:

  • Bloomberg U.S. Dollar Bearish Fund: According to the filing, this fund will track the Bloomberg U.S. Dollar Inverse Total Return Index. The index tracks changes in the value of the U.S. dollar against a basket of developed and emerging market currencies using a combination of U.S-issued money market securities, short-term investment grade government and corporate debt securities, as well as positions in currency forwards, listed currency options and currency futures, currency swap agreements, and spot currencies.
  • Bloomberg U.S. Dollar Bullish Fund: This fund will track the Bloomberg U.S. Dollar Total Return Index, and will use the same type of securities as its bearish counterpart to complete its objective [see Single Country ETFs: Everything Investors Need To Know].
  • Commodity Currency Bearish Fund: According to the filing, this fund will seek to provide total returns reflective of changes in the value of the U.S. dollar relative to the currencies of selected commodity exporters and the difference between the relative short-term interest rates in the United States and comparable interest rates available in the currencies of the selected commodity exporters. The fund will invest in currencies from Australia, Brazil, Canada, Chile, Indonesia, Mexico, New Zealand, Norway, Russia, and South Africa.

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Disclosure: No positions at time of writing.