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ETF Update: A Look Back At December And 8 Funds To Kick Off The New Year

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. Recently, Zacks published a piece on the funds that launched in 2015 and gained in assets under management right away. They were the S PDR DoubleLine Total Return Tactical ETF (NYSEARCA: TOTL ), the SPDR S&P North American Natural Resources ETF (NYSEARCA: NANR ), the iShares Exponential Technologies ETF (NYSEARCA: XT ), the Goldman Sachs ActiveBeta Emerging Markets Equity ETF (NYSEARCA: GEM ) and the SPDR Russell 1000 Momentum Focus ETF (NYSEARCA: ONEO ). While all of these funds saw strong support from investors, none ended the year with positive returns. Overall, markets took a turn for the worse in end of Q3 and beginning of Q4 and had to spend the rest of the year climbing out of that hole (most sectors are still stuck). There were 23 launches in December and no closures for the month. December Total Launches Fund Name Ticker SPDR S&P 500 Fossil Fuel Free ETF SPYX MomentumShares U.S. Quantitative Momentum ETF QMOM SPDR Russell 1000 Momentum Focus ETF ONEO SPDR Russell 1000 Low Volatility Focus ETF ONEV SPDR Russell 1000 Yield Focus ETF ONEY Direxion Daily S&P Biotech Bear 1X Shares LABS Direxion Daily Natural Gas Related Bear 3X Shares GASX Daily Healthcare Bear 3x Shares SICK Tierra XP Latin America Real Estate ETF LARE Elkhorn FTSE RAFI U.S. Equity Income ETF ELKU iShares FactorSelect MSCI Emerging ETF EMGF Pacer Trendpilot European Index ETF PTEU Pacer Autopilot Hedged European Index ETF PAEU Guggenheim Dow Jones Industrial Average Dividend ETF DJD SPDR S&P North American Natural Resources ETF NANR JPMorgan Diversified Return Europe Equity ETF JPEU WisdomTree Dynamic Long/Short U.S. Equity Fund DYLS WisdomTree Dynamic Bearish U.S. Equity Fund DYB MomentumShares International Quantitative Momentum ETF IMOM Legg Mason Developed ex-US Diversified Core ETF DDBI Legg Mason Emerging Market Diversified Core ETF EDBI Legg Mason US Diversified Core ETF UDBI Legg Mason Low Volatility High Dividend ETF LVHD Only a couple of these funds ended December with positive returns; it was a hard month to jump into the market. Hopefully, our rocky start to 2016 doesn’t set any trends in motion, otherwise these new launches from the last two weeks could have a hard time finding traction. There were 12 funds launched in the last 2 weeks, including the last 4 funds on the December launch list above. With tons to cover, let’s jump right in. Fund launches for the week of December 28th, 2015 Fund launches for the week of January 4th, 2016 Reality Shares launches its second ETF (1/6): The Realty Shares DIVCON Leaders Dividend ETF (BATS: LEAD ) was launched just over a year after the company’s first offering, the Realty Shares DIVS ETF. “Unlike many dividend funds based on decades-old dividend history or yield, the new passive ETF features rules-based stock selection and weighting using a proprietary dividend health rating methodology, DIVCON, which systematically ranks companies’ future dividend growth prospects based on a weighted average of seven factors,” according to a press release on Reality Shares’ site. WisdomTree rolls out 4 new Dynamic Currency ETFs (1/7): The following newly issued funds offer currency hedged exposure to international equities, each indicated in their names, and weighted by dividend yield: The WisdomTree Dynamic Currency Hedged International Equity Fund (BATS: DDWM ), the WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund (BATS: DDLS ), the WisdomTree Dynamic Currency Hedged Europe Equity Fund (BATS: DDEZ ) and the WisdomTree Dynamic Currency Hedged Japan Equity Fund (BATS: DDJP ). iShares launches 3 Adaptive Currency Hedged ETFs (1/7): The iShares Adaptive Currency Hedged MSCI Japan ETF (BATS: DEWJ ), the iShares Adaptive Currency Hedged MSCI Eurozone ETF (BATS: DEZU ) and the iShares Adaptive Currency Hedged MSCI EAFE ETF (BATS: DEFA ) are new additions to the iShares lineup. Like the WisdomTree funds launched on the same day, these funds offer currency hedged exposure to international equities, but weighted by market capitalization rather than dividend yield. All 7 of these funds were launched on the BATS exchange. There were no fund closures for the weeks of December 28th, 2015 or January 4th, 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.

The Year In Review: Investors Pull Money Out Of Mutual Funds

By Patrick Keon For 2015 Lipper’s mutual fund macro-groups (equity, taxable bond, money market, and municipal bond) experienced overall net outflows for the first time since 2011. The mutual fund groups saw over $121.5 billion leave their coffers last year, with taxable bond funds (-$85.9 billion) and equity funds (-$60.0) accounting for all of the net outflows. Money market funds (+$16.0 billion) and municipal bond funds (+$8.4 billion) were able to take in net new money for the year. The negative flows from taxable bond funds represented their first annual decrease since 2000 and their largest net outflows since Lipper began tracking fund-flows data (1992). After a positive start to 2015 the group suffered $109.2 billion of negative flows during the last two quarters of the year, when it became apparent the Federal Reserve was looking for an opportunity to start raising interest rates before finally doing so in December. The selling was spread out across both investment-grade and below-investment-grade bond funds; funds in Lipper’s Core Plus Bond Funds (-$20.6 billion), Loan Participation Funds (-$20.0 billion), and High Yield Funds (-$14.5 billion) classifications all experienced substantial net outflows. The annual net outflows for equity funds marked their first decrease since 2012; the group had taken in over $270 billion of net new money for 2013 and 2014 combined. Equity funds did start 2015 strongly with net inflows of almost $34 billion in the first quarter, but the tide turned after that with three straight quarters of net outflows, culminating with $73.0 billion of negative flows during the last quarter of the year. Domestic equity funds (-$153.9 billion) were responsible for all the year’s net outflows, while nondomestic equity funds (+$93.9 billion) were able to post net gains for the year. The main contributors to the negative flows on the domestic equity side were funds in Lipper’s Large-Cap Core Funds (-$47.5 billion), Large-Cap Growth Funds (-$29.4 billion), and Equity Income Funds (-$21.8 billion) categories. Click to enlarge

3 Ways To Get Comfortable With Investing This Year

By Heather Pelant “When I grow up, I want to be an investor,” is never something I hear when talking with my daughters about their future selves. The irony is that they already are investors through their education savings accounts, and they almost certainly will be for the rest of their lives. This disconnect between what we say and what we do is not unique. Amazingly, 69 percent of Americans don’t think of themselves as investors, according to BlackRock’s 2015 Investor Pulse survey. Our research shows people feel nervous about investing because they think it’s risky (37 percent) or complicated (47 percent). A whopping 60 percent of average Americans compared investing to gambling, in contrast to only 45 percent who feel comfortable making their own investment decisions. But in reality, like my daughters, most of us are investors. Six out of 10 of us are “saving” for retirement. If your money is in a 401(k) or IRA, then it’s very likely invested in mutual funds or exchange-traded funds (ETFs). So as you head into this New Year, turn a fresh page on your relationship with investing and make a pledge to do a few simple things that will allow you to wear your investor badge confidently. Make a plan Just 14 percent of Americans have a formal financial plan for retirement, but three-quarters of those people feel confident their money will last through retirement. If you want to be part of this small, confident group, determine how much retirement income you want by a certain age, and then map an investment strategy to navigate that path. You don’t have to do this alone. A financial advisor or online financial resources can help. The sooner you start the better, because the longer you let your money work for you, the less you’ll need to set aside today to meet those goals. And you’ll be able to take on a little more risk for greater potential returns. Read your statements If you don’t read your retirement account statements, you’re not alone. Only 28 percent of Americans actually review the performance of their savings or investments regularly. And less than 20 percent know how much income they’re earning or examine their holdings. Rather than throw them in a pile or click delete, open up those statements and take a good look at them. While they can be loaded with jargon and (important) legalese, the key areas to focus on are: Asset classes: Most good statements or account websites will break down the percentage of stocks, bonds, cash and other types of investments you hold, and let you know if they gravitate toward aggressive or conservative. Make sure you are properly diversified depending on your goals and time you have to invest. Expense ratios: These are the underlying fees and costs of the fund which can eat into your total returns. ETFs tend to have cheaper expense ratios than actively managed mutual funds, so make sure you’re getting your money’s worth. Market performance: Compare the gains or losses of your total portfolio to the performance of major indexes such as the S&P 500 or the Barclays Global Aggregate bond index. Are you doing better than those benchmarks? This isn’t something you should be doing every week or even every month, as the near-term bumpiness of the market can be disconcerting. If you’re invested for the long term, reviewing once or twice a year is fine to make sure you’re on track to meeting your goals. If you’re getting closer to the time when you’ll need your savings, then perhaps look at them quarterly. Get educated Conquering fear of the unknown can simply be done by knowing more. You do not need an MBA to be an engaged investor. One easy way to act on your resolution is by subscribing to a financial news magazine or newspaper, or even just reading the business section of your regular newspaper. Understanding what is happening in the global and local markets can bring home how these events may affect your investment returns. But be careful about overreacting to noisy headlines, and stay focused on your goals. If you choose to work with an advisor, find one who will answer all of your questions. And read the informative emails and newsletters you get from your advisor or brokerage firm. Finally, keep visiting the BlackRock Blog, which covers a wide range of investing topics daily. It’s an old, but true, cliché that knowledge is power. So if your New Year’s resolutions include a financial makeover, start on the pathway to success by understanding who you really are-an investor. This post originally appeared on the BlackRock Blog.