After a slow summer stretch, activity picked up a bit in September as ETF issuers pushed out new products and continued to produce new ideas. Not surprisingly, many of the new ETFs now coming to market continue to be innovative, first-of-their-kind offerings; September saw the debut of the first China dividend ETF, as well as a unique “alternator” ETN that shifts its allocation across various indexes.
September saw the continuation of the contraction that has hit the ETF industry in recent months. Multiple issuers shuttered or announced decisions to shutter products that have struggled to gain interest from investors. At the same time, the filing activity remains brisk; issuers of all shapes and sizes continue to stuff new ideas into the pipeline, indicating that the fourth quarter of the year could see a number of debuts [for updates on all new ETFs, sign up for the free ETFdb newsletter ]:
New exchange-traded products that began trading in September include:
- RBS U.S. Large Cap Alternator ETN (ALTL): RBS launched a new ETN linked to an index that provides exposure to one of three S&P 500 indexes depending on the relative performance of each over time.
- Global X Junior Miners ETF (JUNR): Global X also rebranded one of its products in September to highlight the concentration of small mining companies in its portfolio. Previously known as the S&P/TSX Venture 30 Canada ETF (under the ticker TSXV), this fund debuted with a new name but a substantially similar portfolio in September. The Junior Miners ETF offers access to smaller mining companies covering all aspects of the metals industry, from mining to refining, and is not limited to a single precious metal.
- iShares MSCI Frontier 100 Index Fund (FM): With such a focus on investing in emerging markets, iShares launched a new product to target economies classified as frontier status. This ETF, the MSCI Frontier 100 Index Fund includes exposures to countries that are less developed than emerging markets but possess tremendous long-term growth potential [see Everything You Need To Know About Frontier Markets].
- AdvisorShares STAR Global Buy-Write ETF (VEGA): AdvisorShares added one more actively-managed fund to its lineup this month. This ETF looks to partially hedge risk away by writing a call option for its underlying long position, offering a new way for investors to access the popular “buy-write” strategy.
- WisdomTree China Dividend Ex-Financials Fund (CHXF): The first ETF to be added to WisdomTree in six months, this ETF offers exposure exclusively to Chinese companies that pay high dividends, but are not involved in the country’s financial sector.
- FlexShares “Factor Tilt” ETFs: Chicago-based FlexShares launched two new ETFs just before the end of September, debuting an Emerging Markets Factor Tilt Index Fund (TLTE) and a Developed Markets ex-US Factor Tilt Index Fund (TLTD). These products implement a similar strategy as the existing TILT, which maintains a broad-based portfolio but shifts assets slightly toward small cap stocks and value stocks. As such, TLTE and TLTD now exist as options for investors looking to make a slight tweak on international stock exposure in their portfolios.
A number of filings for new products hit the wire in September, many of which could begin trading at some point in the fourth quarter:
- FactorShares is hoping to launch a new set of mining ETFs in the near future; three ETFs were filed with three very different perspectives into the mining industry.
- ALPS has filed plans with the SEC to offer four new ETFs, three with unique focuses on multi-assets and one based on equity markets in the United States.
- Van Eck filed for approval on more emerging markets bond ETFs; the company already offers an Emerging Markets Local Currency Bond ETF (EMLC).
September saw several more ETF and ETN issuers pull the plug on products that have struggled to gain assets:
- UBS closed 12 of its ETRACS Long and Daily Short S&P500 VIX Futures ETNs September 12th: 1Month (VXAA), 2Month (VXBB), 3Month (VXCC), 4Month (VXDD), 5Month (VXEE), 6Month (VXFF), Daily Short 1Month (AAVX), Daily Short 2Month (BBVX), Daily Short 3Month (CCVX), Daily Short 4Month (DDVX), Daily Short 5Month (EEVX) and Daily Short 6Month (FFVX).
- Barclays iPath shut down two of its products on September 14: Short Extended S&P 500 (SFSA) and Short Extended Russell 1000 (ROSA). It also closed another product on September 19: Short Russell 2000 (RTSA).
- Global X is shuttering four of its smaller ETFs on October 18: Aluminum (ALUM), Auto (VROM), NASDAQ 500 (QQQV) and NASDAQ 400 Mid Cap (QQQM).
Disclosure: No positions at time of writing.
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