iShares Plans Risk And Value MSCI ETFs, Credit Suisse Files For Covered-Call Gold ETN

by on January 18, 2013 | ETFs Mentioned:

The bull train continues to roam across Wall Street as upbeat earnings and solid economic data releases have managed to keep confidence levels afloat even after a “very green” start to the new year. While pressures for a pullback in the equity market are certainly growing by the day, profit taking has been fairly short-lived as few speculators have tried to fight the uptrend at hand. Amid the improving global economic outlook, issuers are once again starting to ramp up developments on the product front as iShares and Credit Suisse have filed interesting proposals with the SEC [see ETF Database Launch Center].

Industry veteran iShares has filed for two equity ETFs that will be linked to MSCI benchmarks with a twist:

  • iShares MSCI USA Risk Weighted Index Fund: This ETF will be based on the broader MSCI USA Index and will reweight each security from that benchmark using a rules-based methodology so that the lower risk stocks account for a higher percentage of the underlying portfolio. The SEC filing went on to state that the risk weighting of each security will be based on three years of weekly returns data [see Low Volatility ETFdb Portfolio].
  • iShares MSCI USA Value Weighted Index Fund: This ETF will also be based on the broader MSCI USA Index, however, it will reweight each security based on certain value-centric metrics, including book value, three-year moving average of sales, earnings and cash earnings. According to the SEC Filing, the underlying portfolio will be tilted towards the energy, financials and IT sectors.
Credit Suisse has laid down the groundwork for an intriguing gold ETN [see also GLD-Free Gold Bug ETFdb Portfolio]:
  • Credit Suisse Gold Flows Index ETN (GLDI): This ETN will maintain notional exposure to the most liquid gold fund on the market, State Street’s SPDR Gold Trust (GLD, A-), while notionally selling monthly “out of the money” call options. According to the SEC Filing, this ETN is expected to cost 0.65%, and premiums on the notional sale of the call options will be received monthly.

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Disclosure: No positions at time of writing.