ETF Launches: New Bull/Bear Europe ETFs, Currency-Hedged Funds, and “Quality” ETFs

by on January 24, 2014 | ETFs Mentioned:

Amidst a busy earnings season, investors welcomed a slew of new funds this week. Direxion added to its impressive lineup of leveraged funds, launching a pair of bull/bear ETFs targeting developed European economies. Deutsche Asset & Wealth Management introduced two new currency-hedged funds: one focused on global equities outside the U.S. and another targeting South Korean equities. Van Eck also added to its lineup, launching four new funds that utilize a “quality” screening methodology [see How to Beat the S&P 500 with Style ETFs].

Direxion’s new bull/bear funds will both charge 0.95%:bull bear

  • Daily FTSE Europe Bull 3x Shares (EURL): This fund offers 3x exposure to FTSE Developed Europe Index, a free float-adjusted market capitalization index that is designed to measure the equity market performance of the large- and mid-cap segments of the developed markets in Europe.
  • Daily FTSE Europe Bear 3x Shares (EURZ): This fund tracks the same index as EURL, but offers -3x exposure. Currently, the index consists of equities from the following 17 developed countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Deutsche Asset & Wealth Management’s currency-hedged ETFs (DBAW and DBKO) will charge 0.40% and 0.58%, respectively:

  • db X-trackers MSCI All World ex US Hedged Equity Fund (DBAW): This fund tracks the MSCI ACWI ex USA US Dollar Hedged Index, which is designed to provide exposure to equity securities in developed and emerging stock markets outside of the U.S., while at the same time mitigating exposure to fluctuations between the value of the U.S. dollar and selected non-U.S. currencies.
  • db X-trackers MSCI South Korea Hedged Equity Fund (DBKO): Like DBAW, this fund is also designed to mitigate exposure to currency fluctuations, but focuses on South Korean equities. Currently, the fund is heavily invested in South Korea’s information technology and consumer discretionary sectors.

Van Eck’s international-focused “quality funds” will charge 0.45%, while the emerging market ETFs will charge 0.50%:

  • MSCI International Quality ETF (QXUS): This ETF tracks the MSCI ACWI ex USA Quality Index, which aims to capture the performance of quality growth stocks selected from the Parent Index, MSCI ACWI ex USA, by identifying stocks with high quality scores based on three main fundamental variables: high return on equity, stable year-over-year earnings growth and low financial leverage.
  • MSCI Emerging Markets Quality ETF (QEM): This fund tracks the MSCI Emerging Markets Quality Index, which employs the same methodology as QXUS, but with a focus on emerging market equities.
  • MSCI International Quality Dividend ETF (QDXU): This ETF applies the “quality” methodology to high-yielding dividend stocks from across the globe. To be selected for inclusion, the company’s dividend yield must be both sustainable and persistent.
  • MSCI Emerging Markets Quality Dividend ETF (QDEM): Similar to QDXU, this fund also focuses on companies with high dividend yields, but selects its components from emerging market countries.

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Disclosure: No positions at time of writing.