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| September 14 – October 1 |
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Note: Want to receive an email notice as soon as ETF Watch is posted? Just click here to subscribe. NEW LISTINGS TDAX Cometh XShares launched the highly anticipated TDAX “lifecycle” ETFs on the New York Stock Exchange’s Arca unit on October 1, 2007. Like other lifecycle funds, these are a “set it and forget it” investment product, with each fund slowly moving toward a more conservative allocation as the target date approaches. The funds hold three main assets classes: international equities, domestic equities and fixed income. To give you a feel for the asset allocation and glide path, the “2010” target date fund today has a 33% equity allocation (25% U.S. stocks and 8% international) and 67% fixed income; by 2010, the split will be 10% equities and 90% fixed income. In contrast, the “2040” fund is currently 97% equities (24% international, 73% domestic). That will reduce to 10% equities in 2040, before ratcheting back up to 33% by 2045. The new funds are:
TDX is designed for investors already at their target date. It is currently a very conservative portfolio (89% fixed income), although it will become less so over time, rising to 33% equities by 2012. All of the new funds charge 0.65% in annual expenses. The prospectus is available here. PowerShares International PowerShares continued its aggressive product expansion with the launch of five new funds, many of which target the hot small-cap international space. The new funds launched on the American Stock Exchange (AMEX), and are the:
The PowerShares funds aren’t cheap. PWD, PDN and PFP charge 0.75% in annual expenses, PDQ charges 0.80%, and PXH charges 0.85%. Aside from the private equity fund, the new funds run up against value-screened competition from WisdomTree, which offers International, European and Japan small-cap funds, as well as a high-yield emerging markets fund at much lower costs. PowerShares is likely betting that the FTSE RAFI name and methodology will carry the day with investors. The international private equity fund is a significant improvement over the existing PowerShares Listed Private Equity Portfolio (PSP), which focuses on U.S. names. The market for publicly traded private equity firms is very limited in the U.S., causing PSP to stretch the definition of private equity to fill its portfolios. In Europe, however, the market is well-developed, allowing PFP to create a much more sensible, balanced portfolio.
The prospectus for the FTSE RAFI funds is available here. The prospectus for the private equity fund is available here. Adelante! XShares has added seven new REIT ETFs to its lineup, with the launch of Adelante Shares on the New York Stock Exchange (NYSE Arca) on September 28. The funds are equal-weighted REIT funds that use different screens to try to capture unique, outperforming slices of the REIT marketplace. They are:
The funds all charge 0.58% in annual expenses. The prospectus is available here.
MyShares With ISE Indexes A new entrant hits the ETF scene… A group called “MyShares Trust” filed papers last week for four new ETFs, becoming the latest ETF start-up to move toward the market in the United States. MyShares filed papers for four ETFs, each of which is tied to an index from the International Securities Exchange (ISE). The new funds are:
The ETFs include some fun and interesting indexes. The SINdex, as the name suggest, invests in so-called “vice” industries, like liquor, gaming and firearms. The Wal-Mart Suppliers fund, meanwhile, will buy an array of companies that sell much of their products through Wal-Mart … a kind of backdoor play on the growth of the largest retailer in the world. The homebuilders ETF will charge just 0.35% in annual expenses, while the other funds will charge 0.60%. The prospectus is available here. SPDR Lehman High Yield State Street Global Advisors (SSgA) has joined the rush of firms moving into the high-yield bond space, filing its SPDR Lehman High Yield ETF with the SEC. The fund focuses on the most highly liquid names in the high-yield space, requiring $600 million in outstanding face value. It tracks the Lehman Brothers High Yield Very Liquid Index. PowerShares also has a high-yield bond ETF in registration, and ProShares has leveraged and short-leveraged high-yield bond funds in registration. Van Eck has a high-yield muni bond ETF in development as well. There is no word yet on expenses. The prospectus is available here. iShares Emerging Markets Bonds Barclays Global Investors added its name to the emerging market bond ETF mix, filing papers for the new JPMorgan USD Emerging Markets Bond Fund. The fund will track the JPMorgan EMBI Global Core Index, which covers all actively traded external debt instruments in 26 emerging markets countries.
PowerShares has an emerging markets debt ETF in registration as well, while State Street has a global Treasuries ETF. The prospectus is available here. iShares Kokusai?
The Dow … the S&P 500 … the Wilshire 5000 … the MSCI Kokusai? The fund will charge just 0.25% in annual expenses, so if you’re looking for DEEJ exposure, this is likely as cheap and as good as it gets in one fund. The prospectus is available here. Vanguard Targets Mega-Caps With large-cap stocks doing well, Vanguard is looking to jump into the large/mega-cap market. The indexing giant filed papers for three “mega-cap” index funds, all of which will be available in ETF shares. The funds will track the MSCI U.S. Large-Cap 300 Index, MSCI U.S. Large-Cap Growth Index and MSCI U.S. Large-Cap Value Index. The funds will help round out Vanguard’s offerings: the company already offers small- and mid-cap funds tied to the MSCI U.S. Mid-Cap 450 and MSCI U.S. Small-Cap 1750, as well as a “Prime Market” fund that combines the Mid-Cap 450 with the Large-Cap 300. Now, it will cover all segments. The ETF shares will cost 0.13% in expenses. Investor shares will be priced at 0.20%, while Institutional Shares will cost 0.08%.
The prospectus is available here. AirShares EU Carbon Allowances One of the most unique and interesting ETF filings to hit the market arrived in mid-August, from XShares. The new AirShares EU Carbon Allowances Fund will buy futures contracts tied to carbon emissions allowances in the European Union. Unlike the U.S., the EU plans to launch a “cap and trade” emissions trading program beginning in 2008 under the auspices of the Kyoto Protocol. Depending on when XShares gets SEC approval for the fund, the initial trading could be quite interesting. There is likely to be a period of intense and interesting price discovery as the EU carbon trading market really takes off in 2008, and savvy players with a good understanding of the market could find interesting opportunities. Either way, the fund will be an interesting way to play the value that people put on pollution, global warming and carbon emissions. The fund will charge 0.95% in annual expenses. The prospectus is available here. UPDATES SPA Prices At 85 Basis Points The new SPA Marketgrader ETFs will charge 0.85 percent in annual expenses, ranking them among the most expensive non-leveraged equity ETFs on the market. Only select XShares and PowerShares funds rank at this level. The SPA ETFs aim to achieve high alpha returns that will more than offset these high fees. The updated prospectus is available here. ETF Data Watch
Note: These numbers refer only to U.S. ETFs. Data as of September 28, 2007, from the American Stock Exchange.
ETFs Filed – By Fund Company You can click on any fund and link directly to the prospectus.
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