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Daily ETF Watch: FLAG Revamped

Heather Bell
State Street Global Advisors launched two more currency-hedged ETFs today, which will join its first such fund, the SPDR Euro Stoxx 50 Currency Hedged ETF (HFEZ), which launched in June.

Today the Forensic Accounting ETF (FLAG | D-75) offered by Exchange Traded Concepts began trading as the WeatherStorm Forensic Accounting Long-Short ETF. Although the fund will maintain its ticker and forensic accounting focus, the changes come with an index switch.

FLAG’s original index was the Del Vecchio Earnings Quality Index, which rated U.S. large-cap companies based on forensic accounting analysis of their balance sheets, cash flow and income statements, and then placed them into tiers. Companies with the best ratings were equally weighted in the top tier, which was given the most weight, with lower-rated tiers receiving lower weightings accordingly.

The WeatherStorm index instead uses a 130/30 long/short strategy and takes a 130 percent long position in the companies with high ratings and a 30 percent short position in the companies with low ratings.

The revised fund also comes with an expense ratio of 0.92 percent; the original version charged 0.85 percent. That's understandable given that long-short strategies are generally more expensive than long-only strategies.

FLAG currently has only about $13 million in assets under management; presumably the name and index change was undertaken with the hope of driving more assets to the fund.

Deutsche Bank Closing Utilities, Subordinated Debt Funds
On Aug. 6, Deutsche Bank voted to liquidate two of the funds in its lineup. The Deutsche X-trackers Regulated Utilities ETF (UTLT | B-66) launched a little more than two years ago, while the Deutsche X-trackers Solactive Investment Grade Subordinated Debt Fund (SUBD | F-52) launched more than a year ago. Each fund has less than $10 million in assets under management.

The funds will see their last day of trading on Sept. 9, with proceeds slated for distribution to investors on Sept. 21.

There have been more than 170 closures this year, putting 2015 on track to match or exceed the more than 190 closures that characterized 2014.

Contact Heather Bell at hbell@etf.com.

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