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Top Performing ETF Areas Of 1H

Despite a long list of concerns, 2015 has so far been a great year for some corners of the investment universe. Though a harsh winter, a soaring greenback and the Fed rate hike worries took the shine away from the U.S. market in Q1, we saw strength in some country ETFs and specific U.S. sectors. Several country ETFs were among the winners in the first half of the 2015 scoreboard on policy easing, with China topping the list. Below, we discuss five of the best performing ETF areas of 1H15. All five have beaten out the S&P 500 (flat till date). China China was a stupendous performer this year on hopes of aggressive policy easing. The more the economy revealed dull data, the case for further monetary easing became stronger. In fact, the Chinese government cut interest rates four times in the first half of 2015. While almost all Chinese equity ETFs stood out this year, A-shares were the winners. Though the space succumbed to a hard correction this month on overvaluation concerns, the space still remains the winner of the first half. Among the toppers, Market Vectors ChinaAMC SME-ChiNext ETF (NYSEARCA: CNXT ) and db X-trackers Harvest CSI 500 China-A Shares Small Cap Fund (NYSEARCA: ASHS ) deserve special mention, having returned over 50%. Moreover, iShares MSCI China Small-Cap ETF (NYSEARCA: ECNS ) and Global X NASDAQ China Technology ETF (NASDAQ: QQQC ) added over 25% and 21%, respectively. Biotech Biotech was the shining star among the U.S. sectors in the first half. The space soared on favorable industry dynamics, escalating mergers as well as successful drug trials, the last being the most important criterion. As a result, ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) , SPDR S&P Biotech ETF (NYSEARCA: XBI ) , BioShares Biotechnology Products Fund (NASDAQ: BBP ) and BioShares Biotechnology Clinical Trials Fund (NASDAQ: BBC ) made places in the top-20 performers list of the first half of the year. These products were up 38%, 30%, 30.5% and 24.4%, respectively. Hedged Japan Stepped-up economic stimulus took Japanese stocks to multi-year highs in recent times. However, with the surging greenback and accommodative policies devaluing yen, currency-hedged investing became popular in the first half. WisdomTree Japan Hedged Financials Fund (NYSEARCA: DXJF ) and WisdomTree Japan Hedged Health Care Fund (NYSEARCA: DXJH ) were the toppers in the Japan equities ETFs space, having returned over 24% and 20% respectively. Russia The year 2014 was disastrous for Russian equities, thanks to the ban imposed on the nation by the West following its Crimea (erstwhile Ukrainian territory) annexation and a massive oil price crash. However, things have changed in the first half of 2015. A spate of rate cuts to avert an impending recession, an upward movement in the local currency, cooling inflation and some stabilization in oil prices brought back investors to this undervalued and oil-rich market. Market Vectors Russia ETF (NYSEARCA: RSX ) , iShares MSCI Russia Capped ETF (NYSEARCA: ERUS ) and SPDR S&P Russia ETF (NYSEARCA: RBL ) have all returned in the range of 19-21% year to date. Europe Thanks to the steep monetary easing and the launch of the QE measure, the hedged Eurozone stocks staged a great show in the first half. Though the rising risks of the Greek debt default and the ‘Grexit’ worries wrecked havoc on Europe investing in June, the space still appears to have been a winner in the first half. db X-trackers MSCI EMU Hedged Equity ETF (NYSEARCA: DBEZ ) , iShares Currency Hedged MSCI EMU ETF (NYSEARCA: HEZU ) and WisdomTree Europe Hedged Equity Index (NYSEARCA: HEDJ ) have added about 10-12% so far this year. Original Post

Virtus To Acquire Majority Stake In ETF Platform

Founded in 2012, ETF Issuer Solutions (ETFis) is a turnkey platform available for investment manager looking to launch new exchange traded funds (ETFs), but don’t want to create and manage their own ETF infrastructure. Currently, the firm has three exchange traded funds (ETFs) on the market and seven more in registration with the Securities and Exchange Commission (SEC), all of which are, or will be, managed by external sub-advisors. All of this looked appealing to Virtus Investment Partners who yesterday announced an agreement to acquire a majority interest in the firm, in a deal expected to close in March. Active and Passive ETF Platform According to a statement from Virtus, the transaction will add to Virtus’s product lineup by improving its “manufacturing capabilities” for both active and passive ETFs. Currently, Virtus has two alternative mutual funds in registration: The Virtus Long/Short Equity Fund and the Virtus Multi-Strategy Target Return Fund, both of which had paperwork filed on January 22. ETFis will become a Virtus affiliate and continue to operate as a multi-manager ETF platform. ETFis’s co-founders Matthew B. Brown and William J. Smalley will stay on with the firm. Currently, Mr. Brown is ETFis’s head of operations and technology capabilities, and Mr. Smalley is the firm’s head of product strategy and management. Said Mr. Smalley: We developed ETF Issuer Solutions to provide a technology-driven, ETF-specific platform that offers significant cost and operational efficiencies. The partnership with Virtus gives us the resources and support to execute on our long-term vision of building a leading multi-manager ETF platform. Focus on External Sub-Advisors All of ETFis’s ETFs, including the seven yet to launch, have external sub-advisers. The firm’s current products include the InfraCap MLP ETF (NYSEARCA: AMZA ), sub-advised by Infrastructure Capital Advisors; and the BioShares Biotechnology Products ETF (NASDAQ: BBP ) and BioShares Biotechnology Clinical Trials ETF (NASDAQ: BBC ), both of which are sub-advised by LifeSci Index Partners. ETFis’s products currently in registration with the SEC include: The Newfleet Multi-Sector Unconstrained Bond ETF; The Eccles Street Event Driven Opportunities ETF; The Tuttle Tactical Management U.S. Core ETF; The InfraCap REIT Preferred ETF; and The Manna Core Equity Enhanced Dividend Stream Fund. Of these, the Newfleet Multi-Sector Unconstrained Bond ETF will be the first managed by a Virtus affiliate added to ETFis’s platform. The fund is to be sub-advised by the experienced team at Newfleet Asset Management and will “have the flexibility to capitalize on opportunities across all sectors of the bond markets.” The fund’s paperwork was filed with the SEC on January 26. Said George Aylward, Virtus CEO: There is growing interest among financial advisors and investors to use exchange-traded funds in their retail and institutional portfolios because of the tax efficiency and liquidity benefits that ETFs offer. This partnership with ETFis will expand our product capabilities and allow us to offer compelling investment strategies in an actively managed ETF format.

ALPS Puts Twist On Biotech Investing With Medical Breakthrough ETF

Health & Biotech Equities ETFs had an astounding 2014 with the NASDAQ Biotechnology index returning a stellar 34% in 2014 – emerging as the biggest winner among all the sectors. Despite overall valuation concerns in the early phase of the year, the sector moved along strongly on rising merger and acquisition activities, several important product approvals and label expansions, ever-increasing health care spending, an aging population and last but not least Obamacare. In fact, there is likely little chance of the winning momentum snapping in the near term. Rather, health & biotech stocks are constantly giving positive signals as we move ahead into 2015. Sensing this wave, ALPS has recently launched a new type of biotech ETF. However, many investors must have noticed that, of late, there has been a surge of unique product issuances which do not deal with the cap-weighted and regular-themed index, but rather focus on the smart-beta technique or look for some unique concepts. The recently launched health & biotech ETF is also a fresh themed, being the maiden ETF structured to seize the all-important R&D opportunities in the pharma industry. The ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) in Focus The fund looks to track the Poliwogg Medical Breakthroughs Index. The fund mostly consists of mid and small caps with a market cap of not below $200 million and not above $5 billion. The index screens the U.S. listed biotech and pharma companies with one or more drugs in Phase II or Phase III FDA clinical trials. Also, the companies need to have cash for 2 years at their normal burn rate. This fund holds 75 stocks with moderate concentration in the top 10 holdings. The top 10 companies hold a 36% share of total net assets. Among individual holdings, top stocks in the ETF include NPS Pharmaceuticals (NASDAQ: NPSP ), Receptos (NASDAQ: RCPT ) and Seattle Genetics (NASDAQ: SGEN ) comprising 4.96%, 4.32% and 4.15%, respectively, of total net assets. The fund charges 50 bps in fees. How Might it Fit in a Portfolio? The fund is an interesting choice for investors seeking to gain exposure to the high potential health & biotech space. As per the portfolio manager for the ALPS ETF Trust, the fund hit the market at an opportune moment when a number of blockbuster drugs from the 1990s and 2000s have been losing patent protection and Big Pharma is struggling to boost its pipelines. The manager further notified that due to time-consuming procedure and an alarming rate of failure for drug development, the big and well-known companies normally rely on new therapies processed by smaller firms that splurge on R&D as compared to large cap stocks. As per the issuer , the earlier-stage firms in the Poliwogg Medical Breakthroughs Index (PMBI) poured in about 2.7% of market cap on R&D, 29% higher than what has been spent by the NASDAQ Biotech index components. Moreover, firms in the PMBI allocated about 2.0% on non-R&D operating expenses relative to 2.6% by the more recognized firms. Can it Succeed? Though the fund is the pioneer in its theme, another brand new product on a similar subject was launched in December in the name of the BioShares Biotechnology Clinical Trials Fund (NASDAQ: BBC ) and the BioShares Biotechnology Products Fund (NASDAQ: BBP ) . BBC tracks the LifeSci Biotechnology Clinical Trials Index to measure the performance of biotechnology companies with a primary product offering that is in a Phase 1, Phase 2 or Phase 3 clinical trial stage of development. These biotechnology clinical trial companies conduct clinical human trials with the ultimate aim of gaining FDA approval. BBP, on the other hand, tracks the LifeSci Biotechnology Products Index to measure the performance of biotechnology companies with a primary product offering that has received U.S. Food and Drug Administration approval. However, both funds charge 85 bps a year giving SBIO an edge to success. Apart from these, the space is fully packed with products being ruled by the $11.8 billion ETF, the SPDR Health Care Select Sector Fund ( XLV ) , and the $7 billion ETF, the iShares Nasdaq Biotechnology Index Fund ( IBB ) . However, thanks to the relatively new theme, we expect the newly launched product to find a solid following among investors.