A few new and interesting ETFs launched a couple of weeks ago. Each offers new ways to invest in the markets. They include two European ETFs, one natural resources ETF and one dividend-seeking ETF. We dive into each of them below.
Two European ETFs Launched by Pacer
Pacer Trendpilot European Index ETF (PTEU ):
PTEU is a multi-asset class ETF that changes exposure based on European market up and down trends. The ETF is passive and tracks the Pacer Trendpilot European Index. The index changes its exposure from European equities in the FTSE Eurobloc Index to U.S. T-Bills based on momentum.
When the European equity market, as measured by the FTSE Eurobloc Index, closes above its 200-day simple moving average (SMA) for five consecutive business days (a bullish sign), PTEU’s exposure is 100% in the FTSE Eurobloc Index. When the FTSE Eurobloc Index closes below its 200-day SMA for five consecutive business days (a bearish sign), PTEU changes its exposure to 50% FTSE Eurobloc Index and 50% three-month U.S. T-Bills. If the downtrend continues and the FTSE Eurobloc Index’s 200-day SMA closes lower than its value from five business days prior (an extremely bearish sign), PTEU’s exposure is 100% in three-month U.S. T-Bills.
Pacer Autopilot Hedged European Index ETF (PAEU ):
PAEU is a passive investment vehicle that tracks the Pacer Autopilot Hedged European Index. The index invests in the European market, with the equity portion holding stocks in the FTSE Eurobloc Index. The underlying index and PAEU are currency hedged, though not in the usual sense. The strategy alternates between a currency hedged and unhedged position to take advantage of EUR/USD exchange rate fluctuations.
When the euro is showing weakening signs, the underlying index tracks the currency hedged version of the FTSE Eurobloc Index. Alternatively, when the euro is strengthening, the underlying index tracks the unhedged version of the FTSE Eurobloc Index. These bearish and bullish signs are determined by the 20-day and 130-day SMAs of the EUR/USD exchange rate. When the 20-day SMA is below the 130-day SMA for five consecutive business days, the hedged version is tracked. When the 20-day SMA is above the 130-day SMA for five consecutive business days, the unhedged version is tracked.
Both PTEU and PAEU began trading on December 15, 2015 with expense ratios of 0.65%.
New ETF With Natural Resources Exposure
Another exciting recent launch is the SPDR S&P North American Natural Resources ETF (NANR ). NANR provides exposure to 59 large- and mid-cap natural resources and commodities companies, including energy, materials and agriculture from the U.S. and Canada. It’s a passive ETF that tracks the S&P BMI North American Natural Resources Index using a sampling strategy. The index rebalances quarterly with targets of 45%, 35% and 20% weights in energy, materials and agriculture, respectively.
NANR began trading on December 15, 2015 with an expense ratio of 0.35%.
Top Five Holdings:
A New Way to Seek Dividend Income
The Guggenheim Dow Jones Industrial Average Dividend ETF (DJD ) seeks to provide income by investing in 30 U.S. large-cap, blue-chip equities from the Dow Jones Industrial Average Yield-Weighted Index. To be included in the index, companies must have consistently increased their dividend payments during the previous 12 months, with the highest-yielding companies weighted the highest.
DJD launched on December 16, 2015 with an expense ratio of 0.30%.
Top Five Sectors:
- Industrials: 18.41%
- Information Technology: 18.13%
- Health Care: 12.89%
- Consumer Staples: 11.59%
- Energy: 10.70%
Top Five Holdings:
