EG Shares Adds Blue Chip ETF (BCHP); iShares Debuts Yield-Optimized ETF (BYLD)

by on April 24, 2014 | ETFs Mentioned:

U.S. equities got off to a relatively good start this week, bolstered by upbeat corporate earnings. Halliburton, Hasbro, United Technologies, Travelers, and Comcast managed to beat analysts’ EPS and revenue estimates. On Wednesday, however, markets turned lower after new-home sales for March declined 14.5% to a seasonally adjusted annual rate of 384,000; analysts were expecting a rise of 2.3% [see also 101 #ETFFunFacts].

On the ETF front, EG Shares and iShares debuted two new funds this week; an emerging market twist on blue chip stocks, and an “optimized yield” fixed income fund.

Access Emerging Markets with Blue ChipsBluechip

EG Shares debuted its Blue Chip ETF (BCHP), which began trading on April 23. The fund tracks the EGAI Developed Markets Blue Chip EM Access Index, an equally-weighted 30-stock index designed to measure the market performance of developed market companies that have quality, meaningful, and growing revenue from emerging markets.

Currently more than 30% of BCHP’s portfolio is allocated to U.S. equities, while stocks from the U.K. and Switzerland account for more than one-fifth of assets. The fund is heavily tilted towards consumer staples and discretionary stocks, which account for 40% of the portfolio. There is also meaningful exposure to industrials, materials, and information technology.

Some of the companies included in the index are Qualcomm, Rio Tinto, Anheuser-Busch, and Colgate-Palmolive. The fund charges a 0.6% expense fee [see also 7 Charts to Put the ETF Industry in Perspective]..

Optimized Yield

iShares launched its Yield Optimized Bond ETF (BYLD), which is designed to optimize yield while keeping risk in line with the broad U.S. bond market. The fund tracks the Morningstar U.S. Bond Market Yield-Optimized Index, a benchmark comprised of fixed income securities that have demonstrated relatively high risk-adjusted income on a consistent basis, and meet liquidity characteristics.

BYLD invests in a wide array of bonds, including government-related fixed-income securities, securitized fixed-income securities, investment-grade credit securities and non-investment-grade credit securities. The fund charges a 0.28% expense fee.

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Disclosure: No positions at time of writing.