More than 60 new ETFs have entered the arena since the start of the year, and as the midway point in in 2013 approaches, it’s time for a routine check to see how the newest players are faring in gathering assets under management.
Bond funds have been the hot-ticket investment vehicles this year, as easing monetary policies throughout the world pushed borrowing rates into the dirt until recently. In addition, high-yielding master limited partnerships have piqued plenty of interest from the ETF investor world. Dividend strategies have remained attractive, too.
The salient theme among the 10 most successful new fund launches of 2013 in two words would be “actively managed.”
Of the funds that have launched in 2013, the top asset gainers are all a spin on one of these popular strategies, and the majority of the funds are actively managed.
In reverse order, here are the biggest asset gainers of new ETFs so far in 2013, according to IndexUniverse data.
Vanguard Emerging Markets Government Bond
The Vanguard Emerging Markets Government Bond fund (VWOB) serves up access to emerging market debt at a time when investors are searching for higher yield. VWOB has pulled in $71 million since it launched at the end of May.
Cambria Shareholder Yield
One-month-old Cambria Shareholder Yield fund (SYLD) is a high-yielding active fund, combining the payout of dividend stocks with the popular payout strategy of share buybacks. At only 59 basis points, the actively managed fund is competitive in terms of expense ratios. Its cheap price tag, coupled with a compelling yield strategy, has surely helped it scoop up $76 million since it launched in May.
First Trust Preferred Securities and Income
The actively managed First Trust Preferred Securities and Income fund (FPE) promises a dividend yield of around 5.5 percent, and that’s attractive. Plus, it’s the first fund of its kind, combining active management with a preferred stock portfolio. Investors are keen on preferred stocks because they trade like an equity but offer the steady distribution of a corporate bond. First Trust pioneered something solid with FPE; it’s grabbed almost $80 million in just four months.
AdvisorShares Newfleet Multi-Sector Income
When the AdvisorShares Newfleet Multi-Sector Income ETF (MINC) entered the market in March of this year, there was skepticism regarding how it could compete with similar funds like Pimco’s Enhanced Short Maturity Strategy ETF (MINT), which has almost half the expense ratio of MINC.
MINC is diversified across 14 different bond sectors, and it’s actively managed. Plus, it has global and domestic reach. These factors set it apart from competition like MINT, and while MINT has $3.38 billion in AUM compared with MINC’s $84 million, with just three months of trading under its belt, it’s fair to say MINC has made a splash in the bond sphere.
Name:Barclays ETN+ Select MLP ETN
The Barclays ETN+ Select MLP ETN (ATMP), which launched in March of this year and comes in second place on the list of 2013 launches, has a dividend yield of 1.03 percent and $136.5 million in AUM.
Paul Baiocchi, senior ETF specialist at IndexUniverse, explains that an MLP ETN tracks an index of master limited partnerships which are pass-through vehicles that transport, process and store energy products and typically pay big yields. Baiocchi goes on to explain that the Barclays ETN does not hold any MLPs; rather, it promises to provide the return of an index of MLPs.
“MLP ETNs are unique in that they usually pay coupon payments made to replicate the distributions of the MLPs in the indexes they track,” concluded Baiocchi.
And the winner is…
Name:SPDR Blackstone / GSO Senior Loan
The champion of asset gatherers for 2013’s new funds to date is the SPDR Blackstone / GSO Senior Loan fund (SRLN). SRLN is what IndexUniverse Senior ETF Specialist Paul Baiocchi calls, “ A perfect case for active management .” SRLN is two months old and holds $279 million in assets. Why? It’s one of a kind, and it works.
Not only are actively managed fund success stories hard to come by, but an actively managed senior loan ETF has yet to be seen. However, it’s working because, as Baiocchi put it, “As rates go up, so too do yields on senior loans. Of course, there’s the potential for a lag—as long as three months—but the allure of higher, market-adjusting yields is clearly striking a chord for many investors.”
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