After a summer slowdown that saw the pace of new ETF launches decline dramatically, product development in the industry ramped up in September. The end of vacation season brought a wave of new exchange-traded products to market, including several first-to-market concepts and the introduction of a couple of new issuers.
September also saw a continuation of a more recent trend: fund closures. A handful of issuers announced last month that they would be shuttering products, including the departure from the industry for one firm.
New exchange-traded products that began trading in September include:
- Industry newcomer QuantShares debuted a suite of seven “market neutral” ETFs that combine equal long and short positions. The result is a market neutral portfolio that is designed to capture the spread between multiple factors, including momentum, size, and beta. The new ETFs include the Momentum Fund (MOM), Anti-Momentum Fund (NOMO), Size Fund (SIZ), Quality Fund (QLT), Beta Fund (BTAH), Anti-Beta Fund (BTAL), and Value Fund (CHEP).
- UBS made a significant expansion to its suite of volatility products, rolling out six ETNs that offer targeted exposure to indexes consisting of VIX futures contracts: the 1-Month S&P 500 VIX Futures ETN (VXAA), 2-Month S&P 500 VIX Futures ETN (VXBB), 3-Month S&P 500 VIX Futures ETN (VXCC), 4-Month S&P 500 VIX Futures ETN (VXDD), 5-Month S&P 500 VIX Futures ETN (VXEE), and 6-Month S&P 500 VIX Futures ETN (VXFF). The company also debuted six inverse VIX ETNs focusing on the same durations.
- PowerShares launched a new addition to its fixed income lineup, the Fundamental Investment Grade Corporate Bond Portfolio (PFIG), offering access to high quality corporate bonds. This fund offers a different weighting methodology that breaks the link between the size of the debt burden and weight assigned.
- UBS, the company best known for its volatility products, continued its expansion in the equity ETN space with the launch of the ETRACS ISE Solid State Drive Index ETN (SSDD) and ETRACS Monthly 2x Leveraged ISE Solid State Drive Index ETN (SSDL). SSDD offers exposure to companies in the solid state drive industry while SSDL offers two times leverage tracking the same index.
- The fourth Trendpilot offered by RBS offers allows investors to gain exposure to crude oil and a trend following strategy. The Oil Trendpilot ETN (TWTI) shifts its exposure between the 12-Month Oil Total Return Index and cash, depending on if the crude market is in a bull or a bear trend.
- Three new single-commodity funds, Teucrium Soybean Fund (SOYB), Teucrium Sugar Fund (CANE), and Teucrium Wheat Fund (WEAT) are being offered by Teucrium. Two of the products (SOYB) and (WEAT) are first to market ideas that focuses exclusively in gaining exposure to their respective commodities.
- Inverse S&P 500 VIX Short-Term Futures ETN (IVOP) was quickly launched by iPath following the termination of the Inverse January 2021 S&P 500 VIX Short-Term Futures ETN (IVO).
- Credit Suisse launched the the Market Neutral Equity ETN (CSMN), a product that will offer market neutral exposure to equity markets in the U.S., Europe, and Japan.
- As demand for emerging market bond ETFs has been on the rise, Guggenheim rolls out its China Yuan Bond Fund (RMB). This is the first U.S. listed ETF to offer exposure to the “Dim Sum” bond market.
- Northern Trust returns to the ETF world debuting with four ‘FlexShares‘ ETFs. This allows investors to gain exposure to both equity and bond markets through FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT), FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR), FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (TDTT), FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (TDTF).
- Immediately following Guggenheim, PowerShares also launched its own ETF, Chinese Yuan Dim Sum Bond Portfolio (DSUM) offering exposure to Chinese bonds.
- Nearing the end of a busy September, State Street launched three new funds: SPDR Software & Services ETF (XSW), SPDR S&P Health Care Services ETF (XHS), SPDR S&P Aerospace & Defense ETF (XAR). These funds allow investors to gain exposure to targeted key sub-sectors of the U.S. with (XHS) being the first pure play health care services ETF.
September saw a number of ETF filings to keep the pipeline full for the foreseeable future:
- AdvisorShares, known for their line of active ETFs, detailed plans for the STAR Global Buy-Write ETF (VEGA) [see ETF Pipeline: Global BuyWrite ETF On The Horizon].
- Van Eck announced plans for a small cap Indonesia ETF, making for an enticing play being that Indonesia has performed well over the last few years. The firm also detailed and unconventional oil & gas fund that has the potential to be a very unique product [see also Van Eck Plans Small Cap Indonesia ETF].
- PowerShares filed for four new products to focus on high and low beta/volatility. The proposed funds are: S&P International Developed High Beta Portfolio (IDHB), S&P International Developed Low Volatility Portfolio (IDLV), S&P Emerging Markets Low Volatility Portfolio (EELV), and S&P Emerging Markets High Beta Portfolio (EEHB) [see PowerShares Files For More High Beta, Low Volatility ETFs].
- State Street, home of the two largest ETFs in the world, outlined a new floating rate bond product to help investors in these rocky markets [see State Street Plans Floating Rate Bond ETF].
- Topping the month off, Proshares file for four new and unique inflation protected government bonds [see ProShares Files For Innovative ‘Inflation ETFs’].
One fund was forced to permanently shut its doors this month as the ETF industry experienced some necessary growing pains:
- JETS Contrarian Opportunities Index Fund (JCO) was forced to shut down midway through the month citing a failure to attract assets as the main culprit. “With many investors looking for new investing tools, we believe that contrarian and other investment styles will eventually be well represented in the ETF market” said said Javelin president and founder Brint Frith. The closing of this fund also means Javelin Funds is currently inactive in the ETF space.
Disclosure: No positions at time of writing.
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