ETFS Enters U.S. Market

London-based ETF Securities made its debut in the U.S. in July with the launch of the ETFS Physical Silver Shares (NYSE Arca: SIVR), an ETF holding actual silver as its sole asset. The new fund was a huge hit, quickly racking up more than $100 million in assets after only a couple months of trading. SIVR charges just 30 basis points, undercutting competing physical silver ETFs in the expenses area.

ETFS followed up SIVR’s launch with the ETFS Physical Swiss Gold Shares (NYSE Arca: SGOL) in September. Each share of the fund is backed at launch by one-tenth of an ounce of Swiss-stored physical bullion. SGOL is so far almost as big a hit as SIVR, with assets at roughly $70 million after only a couple weeks of trading. The fund charges 39 basis points in expenses.

ETFS has two more funds in registration in the U.S. that would hold palladium and platinum. Should they launch soon, they would be the first products of their kind to hit the U.S. market.

FINRA Increases Margin Limits For Leveraged ETFs

The Financial Industry Regulatory Authority announced in early September that it is imposing increased margin limits on investors who hold leveraged and inverse ETFs in their portfolios.

Starting Dec. 1, the maintenance margin requirement for portfolios will be adjusted to accommodate the inherent leverage of these positions. That is, investors who hold leveraged and inverse ETFs will not be able to take on as much extra margin as investors who hold traditional securities. The move makes sense, as the leveraged positions are in some sense margined already (at least, the returns are amplified above 100 percent exposure).

FINRA also is increasing the maintenance margin requirements for listed and over-the-counter uncovered options on leveraged ETFs.

Van Eck First To Cover Vietnam With ETF

In August, Van Eck Global became the first U.S. ETF provider to launch an ETF covering frontier favorite Vietnam as a stand-alone country.

The Market Vectors Vietnam ETF (NYSE Arca: VNM) tracks an index developed by Van Eck. The underlying index’s components include companies based in Vietnam or that generate at least 50 percent of their revenues from operations in that country.

According to Van Eck, about 70 percent of the companies in the ETF are actually domiciled in Vietnam. Some 86 percent of the benchmark is represented by small- and mid-cap-sized companies. At launch, the fund covered 28 companies.

It charges a net expense ratio of 0.99 percent.

EGA Launches Emerging Market Financials ETF

Emerging Global Advisors is continuing to roll out emerging markets sector funds with the mid-September launch of the Emerging Global Shares Dow Jones Emerging Markets Financial Titans 30 Index Fund (NYSE Arca: EFN). The fund covers the 30 largest financial companies from 10 emerging markets.

At launch, the top five countries, according to weightings in the Dow Jones Emerging Markets Financial Titans 30 Index, were: China, at 39.71 percent; Brazil, 22.8 percent; India, 13.21 percent; South Africa, 9.25 percent; and Malaysia, 3.96 percent.

The ETF comes with a price tag of 85 basis points.

Pimco Launches More ETFs

The Pimco 1-5 Year U.S. TIPS Index Fund (NYSE Arca: STPZ) rolled out in late August.

Although there are other ETFs tracking U.S. Treasury inflation protected securities available, STPZ is the first to focus on the short end of the yield curve. It charges 0.20 percent in expenses.

In September, Pimco followed up with the launches of three more funds: the Pimco Broad U.S. TIPS Index Fund (NYSE Arca: TIPZ), the Pimco 15+ Year U.S. TIPS Index Fund (NYSE Arca: LTPZ) and the Pimco 7-15 Year U.S. Treasury Index Fund (NYSE Arca: TENZ). LTPZ and TIPZ each charge 20 basis points, while TENZ carries an expense ratio of 0.15 percent.

Fidelity Unlikely To Launch More ETFs Soon

Recent reports indicate that Fidelity Investments is not looking to expand its presence in the ETF market beyond its single fund—the Fidelity Nasdaq Composite Index ETF (Nasdaq GM: ONEQ)—anytime soon.

Rodger Lawson, Fidelity’s president, told InvestmentNews that the firm had “no plans to expand proprietary ETFs.”

There has been speculation that Fidelity would look to confront its main rival, Vanguard, more aggressively in the field, and there were reports that Fidelity was actually exploring making just that sort of push. Some industry experts, however, dismissed the idea that the firm would be interested in launching traditional index-based ETFs and said that actively managed ETFs were also an unlikely source of appeal for Fidelity due to transparency requirements.

Lawson’s denial indicates that those transparency issues have likely shut the lid on ETFs for Fidelity for now, at least.

Global X Launches First Nordic ETF

The first pure-play ETF focused just on the Nordic region of Europe launched in August.

The Global X FTSE Nordic 30 ETF (NYSE Arca: GXF) charges an expense ratio of 0.50 percent. It tracks a long-standing benchmark for Nordic markets created and maintained by FTSE Group. The 30 largest companies by market-cap size and liquidity in the region are included.

The index is rebalanced semiannually. Most of the component companies are listed on local exchanges and not available directly through U.S. listings. The largest company at the end of July was Sweden’s Nordea Bank, at 10 percent. Other leading names were: Novo Nordisk (8 percent); Nokia (8 percent); Ericsson (8 percent) and Norway’s StatoilHydro (7 percent).

1 | 2 |