With “fiscal cliff” woes off investors’ minds, at least for this month, stocks have enjoyed a very green start in the new year. On the product development front, 2012 shaped out to be quite busy as several newcomers like Pyxis and Huntington joined the industry while veterans continue to beef up their existing lineups; the ETF universe ended the year just shy of the 1,500 mark in terms of total products, marking yet another stride forward in the democratization of the investing process [see also 101 High Yield ETFs For Every Dividend Investor].
Industry giant State Street has filled the development pipeline with six proposals for actively-managed funds [see also ETF LaunchCenter]. The first SEC filing details three value/growth products:
- SPDR MFS Systematic Core Equity ETF: This ETF will employ a bottom-up approach to buying and selling investments based on fundamental and quantitative analysis. Some of the factors considered include analysis of earnings, cash flows, competitive position and management ability.
- SPDR MFS Systematic Growth Equity ETF: This ETF will also use a bottom-up approach, however, it will focus exclusively on companies that possess attractive growth potential [see our Pure Growth ETFdb Portfolio].
- SPDR MFS Systematic Value Equity ETF: Similar to the core equity strategy, this ETF will rely on bottom-up analysis with a focus on value stocks [see our Pure Value ETFdb Portfolio].
- SPDR SSgA Risk Aware ETF: This ETF will use a proprietary quantitative investment process to measure and predict investor risk preferences while investing in securities selected from the Russell 3000 Index. The underlying portfolio is dynamic; during periods of anticipated high risk, the portfolio may increase its allocation to safer securities like large cap and value stocks, and vice versa.
- SPDR SSgA Large Cap Risk Aware ETF: This ETF uses the same strategy outlined above, although it differs by selecting its underlying holdings from the Russell 1000 Index.
- SPDR SSgA Small Cap Risk Aware ETF: This ETF also uses the “risk aware” strategy, although it differs by selecting its underlying holdings from the Russell 2000 Index.
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Disclosure: No positions at time of writing.
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