We saw many new ETF launches in the past couple of weeks. Below, we take a look at the main ETFs investors should have on their radar.
3 New State Street Smart-Beta ETFs
State Street launched three new ETFs on December 2, 2015. Each is a smart-beta-focused ETF based on the broad Russell 1000 Index. The ETFs select securities with high value, high quality and low size characteristics. The only difference is the fourth factor, which is implied in their respective names.
SPDR Russell 1000 Yield Focus ETF (ONEY )
ONEY is a smart-beta ETF that tracks the Russell 1000 Yield Focused Factor Index. This index is designed to gain exposure to U.S. large-cap, high-yield equities. The ETF holds 305 securities with a tilt towards the aforementioned factor characteristics.
- Financial Services: 18.77%
- Consumer Discretionary: 16.54%
- Producer Durables: 15.97%
- Utilities: 13.07%
- Energy: 9.14%
SPDR Russell 1000 Low Volatility Focus ETF (ONEV )
ONEV is a smart-beta ETF that tracks the Russell 1000 Low Volatility Focused Factor Index. This index is designed to gain exposure to U.S. large-cap, low-volatility equities. The ETF holds 424 securities with a tilt towards the aforementioned factor characteristics.
- Financial Services: 20.07%
- Consumer Discretionary: 16.60%
- Producer Durables: 15.82%
- Consumer Staples: 12.46%
- Utilities: 9.99%
SPDR Russell 1000 Momentum Focus ETF (ONEO )
ONEO is a smart-beta ETF that tracks the Russell 1000 Momentum Focused Factor Index. This index is designed to gain exposure to U.S. high-momentum, large-cap equities. The ETF holds 924 securities with a tilt towards the aforementioned factor characteristics.
- Consumer Discretionary: 22.63%
- Producer Durables: 17.49%
- Financial Services: 15.99%
- Health Care: 10.09%
- Technology: 9.33%
All three ETFs have the same expense ratio of 0.20%.
3 Leveraged and Inverse ETFs Launched By Direxion
The Daily Healthcare Bear 3x Shares (SICK ) and Daily Natural Gas Related Bear 3x Shares (GASX ) were relaunched by Direxion on December 3, 2015. Both of these funds were closed previously due to insufficient investor interest and low assets under management. SICK was closed on September 5, 2012 and GASX was closed on September 23, 2014. Both ETFs have 0.95% expense ratios and are inverse 3x leveraged ETFs with U.S. exposure.
Daily Healthcare Bear 3x Shares (SICK )
SICK tracks the 300% inverse performance of the Health Care Select Sector Index, which comprises equities from the health care sector in the following industries: pharmaceuticals, health care providers and services, health care equipment and supplies, biotechnology, life sciences tools and services, and health care technology. Some of the top holdings of the index include famous names such as Johnson & Johnson (JNJ), Pfizer (PFE), Gilead Sciences (GILD), Merck & Co. (MRK), and Allergan (AGN). SICK is the opposite of the Daily Healthcare Bull 3x Shares (CURE ) ETF.
Daily Natural Gas Related Bear 3x Shares (GASX )
GASX is a smart-beta ETF that tracks the 300% inverse performance of the equally weighted ISE-Revere Natural Gas Index, which provides exposure to securities in the oil and gas exploration and production, and integrated oil and gas industries. Some holdings of the index include EXCO Resources, Stone Energy (SGY), Matador Resources (MTDR), QEP Resources (QEP) and Synergy Resources (SYRG). GASX is the opposite of the Daily Natural Gas Related Bull 3x Shares (GASL ) ETF.
Daily S&P Biotech Bear 1x Shares (LABS )
On the same day SICK and GASX were revived, another Direxion ETF launched: the Daily S&P Biotech Bear 1x Shares (LABS ). This fund tracks the 100% inverse performance of the S&P Biotechnology Select Industry Index, which tracks 98 U.S. biotechnology equities. The subsectors include mainly medical, biomedical and gene drugs, with some therapeutics and diagnostic equipment. LABS has an expense ratio of 0.45%.
Like other leveraged and inverse ETFs, all three of these, SICK, GASX, and LABS, are meant to be held for the short term because they provide leveraged and inverse exposures to their respective indexes for one day only.