This Week’s ETF Launches: Shiny Silver, Small Stocks & Shorter Bonds
Coming off the Labor Day holiday, exchange-traded funds’ (ETFs) issuers were quite busy. This week we saw four launches from such providers as BlackRock’s iShares, Direxion and venerable investment bank Goldman Sachs. Each of the four launches touched on some new and interesting segments of the overall market. Once again, investors continue to have plenty of choices when crafting their portfolios. Here’s a look at the four ETFs hitting the tape.
Here’s a look at the four ETFs hitting the tape.
Direxion Daily Silver Miners Index Bull 2X Shares (SHNY n/a) and Direxion Daily Silver Miners Index Bear 2X Shares (DULL n/a). Goldman Sachs TreasuryAccess 0-1 Year ETF (GBIL n/a). iShares Edge MSCI Min Vol USA Small-Cap ETF (SMMV n/a)
Ticker | Name | Issuer | ETFdb Category | Expense Ratio |
|---|---|---|---|---|
(SHNY n/a) | Direxion Daily Silver Miners Index Bull 2X Shares | Direxion | Leveraged Equities | 0.80% |
(DULL n/a) | Direxion Daily Silver Miners Index Bull 2X Shares | Direxion | Inverse Equities | 0.80% |
(GBIL n/a) | Goldman Sachs TreasuryAccess 0-1 Year ETF | Goldman Sachs | Government Bonds | 0.14% |
(SMMV n/a) | iShares Edge MSCI Min Vol USA Small-Cap ETF | iShares | Small-cap Blend Equities | 0.20% |
Direxion Bets Big on Silver
Leveraged, inverse and alternatives ETF issuer Direxion continued to expand its line up of funds this week with two launches targeted at precious metals traders. Surprisingly, silver hasn’t received much attention from the ETF sponsor before. Its gold funds, like the Daily Gold Miners Index Bull 3x Shares (NUGT C+), remain immensely popular with investors and traders.
Looking to capture a similar spark and plug the hole in its line up, Direxion launched the Direxion Daily Silver Miners Index Bull 2X Shares (SHNY n/a) and Direxion Daily Silver Miners Index Bear 2X Shares (DULL n/a) on September 8.
Like many of Direxion’s products, both SHNY and DULL will track an index made popular by another ‘regular’ ETF on the market – in this case, the Solactive Global Silver Miners Index. The index is a measure of the largest and most liquid miners from across the world that receive the bulk of their revenues from silver mining or silver-related activities. SHNY will provide 2x the daily exposure of the index, while DULL will allow investors to short silver miners by delivering inverse daily exposure to the index’s returns.
Interesting to note is that SHNY follows the firm’s recent trend of only doing 2x leveraged products. The perceived future regulation risks has Direxion scaling back its leveraged ETF efforts in an attempt to prevent a ban on its funds.
Expenses for the ETFs cost just 0.80%, or $80 per $10,000 invested.
Goldman Goes Short-Term
Since entering the ETF arena just a few quarters ago, Goldman Sachs has actually become a big-time player. Several of its funds have ballooned in assets, and its various smart-beta products seem to be delivering on their promises. Its new ETF will take a different approach and was most likely created as a client-demand product.
The duality of rising interest rates and low current rates is throwing many income investors for a loop. Goldman is offering a solution with its Goldman Sachs TreasuryAccess 0-1 Year ETF (GBIL n/a).
GBIL through its index, the Citi US Treasury 0-1 Year Composite Select Index, will bet on U.S. Treasury bonds with maturities of less than 12 months. The idea is that these bonds are yielding more than a bank account, but still offer quick access to rising interest rates. Investors can get better and safer income today, while still protecting themselves for tomorrow.
Products like PIMCO’s Enhanced Short Maturity Active Exchange-Traded Fund (MINT A+) follow a similar vein and have become popular cash-management products. Goldman hopes to cash in on some of that excitement. The kicker for GBIL is that it will only cost a rock-bottom 0.14% in expenses.
iShares Rounds out Low-Volatility Offerings
Finally, the week’s last launch comes from iShares. With volatility continuing to rear its ugly head, the firm has expanded on its low-volatility offerings with the iShares Edge MSCI Min Vol USA Small-Cap ETF (SMMV n/a).
Under its rebranded iShares Edge smart-beta line, SMMV plugs a hole in its low-volatility offerings. The ETF will track the MSCI USA Small Cap Minimum Volatility (USD) Index. The index is a measure of all the small-cap stocks in the U.S. that exhibit lower volatility than the overall market. This should help to eliminate the jumpiness of the small-cap sector. With SMMV, investors now have the full range of asset classes, regions and market segments that can be exploited with a low-beta twist.
Expenses run at just 0.20%.
The Bottom Line
ETF sponsors continue to fill the gaps with their respective line ups. In the end, that’ll help investors hone in on more opportunities and craft better portfolios over the long haul. This week’s new issued certainly deliver on that front.
