ETF Update: February May Have Started Slow, But It Finished With A Flood

By | March 7, 2016

Scalper1 News

Welcome back to the SA ETF Update. My goal is to keep Seeking Alpha readers up to date on the ETF universe and to gain some visibility, both for the ETF community and for me as its editor (so users know who to approach with issues, article ideas, to become a contributor, etc.). Every weekend, or every other weekend (depending on the reader response and submission volumes), we will highlight fund launches and closures for the week, as well as any news items that could impact ETF investors. Before we jump into what happened in the ETF industry in the last three weeks, I wanted to bring up an opportunity for authors, and potential authors, who are looking to learn more about the writing process and improve their craft. My colleague, Rocco Pendola , is currently running The Seeking Alpha Author Experience , an information series to further the partnership between Seeking Alpha and our contributors. In his own words: Our goal is to provide an unprecedented resource for author success and, more specifically, one that helps writers reach and keep expanding the boundaries of their individual potential. As a writer, you have personal style, your own voice and analytical and rhetorical ways you go about helping other investors. We’re not here to change that. We simply want to A) help you optimize your approach, B) share what we have seen work from a broad and diverse sample of techniques and C) be here to answer questions and concerns you have related to the best ways to get your message across to investors. I’ve had a number of contributors and new authors reach out to me because of the ETF Update series, and I imagine there are more of you who would be interested in contributing but have questions about the process. If interested in learning more, use the form at the following link to sign up for The Seeking Alpha Author Experience . Rocco sends all Author Experience materials out in installations via email, so while part of a community of contributors, you can receive one-on-one attention simply by clicking “reply.” You will receive no more than one email per day. I have been reading along and really enjoy his insights, so if you are looking to learn more about writing and contributing to Seeking Alpha I would highly recommend signing up. Now back to the regularly scheduled ETF content. While the first two weeks of the month only saw four launches , the month ended with 11 more. Markets also started to show signs of life again in mid-February, which is good news for ETFs looking to attach investors. As we have a lot to catch up on and there any many others on this platform covering the broader picture, lets jump right in! Fund launches for the week of February 15th, 2016 UBS (NYSE: UBS ) launches the first of many ETFs (2/16): The UBS AG FI Enhanced Europe 50 ETN (NYSEARCA: FIEE ) was the first of 3 launches from ETRACs, the ETF division of UBS, over a week. FIEE is an exchange traded note linked to the performance of STOXX Europe 50 USD (Gross Return) Index, the largest blue-chip stocks in the STOXX Europe 600. The 3 largest holdings are Nestle ( OTCPK:NSRGF ), Novartis (NYSE: NVS ) and Roche ( OTCQX:RHHBY ), all Swiss companies like UBS. UBS’s second launch of the week (2/18): The ETRACS S&P GSCI Crude Oil Total Return Index ETN (NYSEARCA: OILX ) “reflects the excess returns that are potentially available through an unleveraged investment in the contracts comprising the index, plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts,” according to a press release at its launch. This is not a new product idea, but with an expense ratio of 0.50% OILX is able to undercut the existing competition. ProShares gives its futures strategy ETF another chance (2/18): Later in March ProShares will be shutting down a couple funds that never found traction in the market, including the ProShares Managed Futures Strategy (NYSEARCA: FUTS ). However, in preparation of this closing, ProShares launched the ProShares Managed Futures Strategy ETF (BATS: FUT ), which is a new and improved version of FUTS. The fund structure has been updated in a number of ways, but the largest change in my opinion is that investors no longer need to fill out a K-1 form, which could have been a sticking point for the lack of interest before. For further analysis on FUT please read ” ProShares Re-Configures Its Managed Futures ETF Effort ” by Brian Haskin. Fund launches for the week of February 22nd, 2016 UBS wraps up a busy week with a high yield ETN (2/22): And for UBS’s final launch in February, the UBS AG FI Enhanced Global High Yield ETN (NYSEARCA: FIHD ). This fund, designed for Fisher Investments, tracks the MSCI World High Dividend Yield USD Gross Total Return Index. This makes FIHD very similar to the Barclays ETN+ FI Enhanced Global High Yield ETN (NYSEARCA: FIGY ), which tracks the same index and was also created for Fisher Investments. Pacer Financial expands its ETF lineup (2/23): For Pacer’s 6th ETF it introduced the Pacer Global High Dividend ETF (BATS: PGHD ), self described as “a strategy driven exchange traded fund that attempts to provide a continuous stream of income and capital appreciation over time by screening for companies with a high free cash flow yield and a high dividend yield.” By tracking the companies with the highest levels of free cash flow and dividend yields in the FTSE All World Developed Large Cap Index, PGHD hopes to return strong dividends for investors looking for global exposure. For further analysis on PGHD please read ” New High Dividend ETF With Free Cash Flow Focus By Pacer ” by Zacks Funds. Cambria launches a high yield bond ETF (2/23): The Cambria Sovereign High Yield Bond ETF (Pending: SOVB ) seeks return for investors through investing in high risk, high reward bonds either directly or through other exchange-traded products. “Foreign bonds are the largest asset class in the world, yet dramatically underrepresented in investor portfolios,” said Meb Faber , Cambria Chief Investment Officer, in a press release for the fund. “Moving away from a market-cap strategy and employing a value lens to foreign government bonds could help investors gain smarter access to income in a yield-starved environment.” WisdomTree expands in the Put/Write Space (2/24): The WisdomTree CBOE S&P 500 PutWrite Strategy Fund (NYSEARCA: PUTW ) is the company’s first options strategy ETF, offering a collateralized put write strategy on the S&P 500. As described on the fund’s homepage, “the strategy is designed to receive a premium from the option buyer by selling a sequence of one-month, at-the-money, S&P 500 Index puts (SPX puts). If, however, the value of the S&P 500 Index falls below the SPX Put’s strike price, the option finishes in-the-money and the Fund pays the buyer the difference between the strike price and the value of the S&P 500 Index.” For further analysis on PUTW please read ” Finally, Is PUTW The One We’ve Been Waiting For? ” by Reel Ken. Janus adds to ETF offerings (2/25): Open for business today are the Janus Small Cap Growth Alpha ETF (NASDAQ: JSML ) and the Janus Small/Mid Cap Growth Alpha ETF (NASDAQ: JSMD ). They are the first ETFs to launch since Janus’ (NYSE: JNS ) November 2014 purchase of VelocityShares. Both are what Janus calls Smart Growth ETFs utilizing a systemic process to identify resilient small and mid-cap companies poised for long-run sustainable growth. Janus’ ETP business had about $3.2B in AUM across 17 products as of year-end. Fund launches for the week of February 29th, 2016 Vanguard targets international dividend stocks with new funds (3/2): The company yesterday launched the Vanguard International High Dividend Yield ETF (NASDAQ: VYMI ) and the Vanguard International Dividend Appreciation ETF (NASDAQ: VIGI ). Both ETFs come alongside “investor” and “admiral” classes of mutual funds. VYMI, with a 0.3% expense ratio, tracks the FTSE All-World ex-U.S. High Dividend Yield Index which has more than 800 of the highest-yielding large- and small-cap stocks in both developed and emerging markets. VIGI, with a 0.25% expense ratio, tracks the Nasdaq International Dividend Achievers Select Index, which holds about 200 stocks with long track records of dividend boosts. The funds are international cousins to the $12B Vanguard High Dividend Yield Index Fund (NYSEARCA: VYM ) and the $19B Vanguard Dividend Appreciation Index Fund (NYSEARCA: VIG ). The new products also have cheaper fees than the SPDR International Dividend ETF (NYSEARCA: DWX ), which charges 0.45%, and the iShares International Select Dividend ETF (NYSEARCA: IDV ), which charges 0.5%. Goldman boosts ETF lineup (3/4): Goldman Sachs’ (NYSE: GS ) burgeoning ETF operation now offers five funds after the launch of the Goldman Sachs ActiveBeta Europe Equity ETF (NYSEMKT: GSEU ) and the Goldman Sachs ActiveBeta Japan Equity ETF (NYSEMKT: GSJY ). As with the previous three ETFs which dame to market late last year, the two new funds were opened with institutional assets of $25M each. Each has an expense ratio of 0.25%. Those original three now have more than $1B in combined AUM. In addition, the Goldman Sachs ActiveBeta International Equity ETF (NYSEARCA: GSIE ) – which came to market in November – has its fee cut to 0.25% from 0.35% Fund closures for the weeks of February 15st, 22nd and 29th, 2016 Have any other questions on ETFs or ETNs? Please comment below and I will try to clear things up. As an author and editor I have found that constructive feedback is the best way to grow. What you would like to see discussed in the future? How can I improve this series to meet reader needs? Please share your thoughts on this first edition of the ETF Update series in the comments section below. Have a view on something that’s coming up or a new fund? Submit an article. Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. Scalper1 News

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