After a relatively quiet period, launch activity in the exchange-traded fund (ETF) space has quickly gained pace coming into the finally weeks of the year. That quickening of launch activity is due to both the sheer number of funds and the variety of new ETFs hitting the tape.
This week was no exception to that fact. The funds launched cover a wide range of asset classes, themes and nations. In the end, investors continue to benefit from the diversity of new products.
For a list of all new ETF launches, take a look at our ETF Launch Center.
|Ticker||Name||Issuer||ETFdb Category||Expense Ratio|
|(DHDG)||WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Fund||WisdomTree||Foreign Large Cap Equities||0.48%|
|(GVIP)||Goldman Sachs Hedge Industry VIP ETF||Goldman Sachs||Large Cap Blend Equities||0.45%|
|(FLEU)||Barclays ETN+ FI Enhanced Europe 50 ETN, Series B||Barclay’s Bank||Europe Equities||0.76%|
|(MENU)||USCF Restaurant Leaders Fund||Oppenheimer||Consumer Discretionary Equities||0.65%|
WisdomTree Gets Dynamic
Fund sponsor WisdomTree has really made a name for itself with its currency hedged products. It was one of the first firms to recognize the ability of currency movements to hinder returns for foreign/international stock and bonds. ETFs like WisdomTree Japan Hedged Equity Fund (DXJ ) have become immensely popular as investors look to hedge rising dollar risk away. However, ETFs like DXJ only tell half the story. That story is only if the dollar is rising.
In order to help protect against a falling dollar, dynamic currency hedged products can change how they interact with the dollar – up or down. This provides investors a one-stop shop for international exposure. The latest product from WisdomTree adds a touch of dividend growth to that equation.
Despite its long name, the basics behind WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Fund (DHDG) are quite simple. The fund tracks those developed market international firms with histories of growing their dividend payments over time. The fund also screens those firms’ various quality fundamentals, such as good earnings growth, low debts and low valuations. This is designed to make sure those dividends keep growing into the future. Finally, DHDG will dynamically hedge the multitude of local currencies in its holdings against the dollar. This allows investors to ensure “real” stock gains and take the dollar out of the equation in any environment.
Ultimately, DHDG can serve as a core international holding for investors. Expenses are cheap as well. The new fund will only charge 0.48%, or $48 per $10,000 invested.
You can search the entire ETF universe using our ETF Screener Tool. Filter ETFs using criteria such as asset class, sector, region, liquidity and expenses, just to name a few.
Smart Money Follows Smart Money
Venerable investment bank and asset manager Goldman Sachs has quickly become one of the best new sponsors of ETFs in recent years. The vast bulk of its holdings have focused on smart-beta indexing. This time, its new ETF focuses on something very familiar to its heart – the hedge fund industry.
The Goldman Sachs Hedge Industry VIP ETF (GVIP) will follow smart money, literally. The ETF will invest in stocks that hedge funds, institutional investors and other gurus own. GVIP will search through various funds 13F filings with the Securities and Exchange Commission and buy the ones that appear the most frequently or “in very important positions.” The index holds 50 companies that are equal dollar-weighted when the index is rebalanced.
It should be noted that GVIP’s prospectus specifically states that the fund is not a hedge fund replication strategy. However, it could be an interesting indexed way to generate some additional alpha for a portfolio. Expenses run just 0.45%.
Want more Hedge Fund ETF action? Check out The 10 Hedge Fund Strategy ETFs You Should Consider.
Fisher Adds Another Bespoke ETN
Bank Barclay’s iPath lineup of ETNs are pretty popular, but its lineup of ETN+ notes are not. However, it is here that asset manager Fisher Investments has chosen to partner with the bank in order to create various bespoke ETNs to serve its clients. The Barclays ETN+ FI Enhanced Europe 50 ETN, Series B (FLEU) is the latest example of that. The ETN provides 2x the exposure of the 50 large-cap European stocks screened for various fundamentals.
Anybody can own the ETN. However, the vast bulk of FLEU’s assets and shareholders will be Fisher Investments own clients. Trading volumes – as with their other bespoke funds – have been limited as these were created for a very specific set of people and purposes. Most investors will be better suited elsewhere. Expenses run 0.76%.
Another Restaurant ETF
This week, investors get another tasty ETF. The USCF Restaurant Leaders Fund will take on the previously launched Restaurant ETF (BITE ) for coverage of the sector.
MENU will follow the Restaurant Leaders INDXX Index. This underlying index specifically overweights those firms in the Quick Serve category and screens the universe for fundamental qualities expected to lead to outperformance. It does hold some full-service names, but the majority of the ETF are in fast food stocks. MENU can also hold small-, mid- and large-capitalization companies. The ETF is also globally diversified.
Expenses for the fund run 0.65%, which is cheaper than its rival BITE.
The Bottom Line
This week’s set of launches continues to highlight the evolution and direction of ETFs. In the end, investors now have four new funds to help build out their portfolios. And they may want to consider them, considering those new sectors and ideas that they tackle.
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