There are some undeniable truths about the state of the
exchange-traded products industry. Assets are expected to rise in
2012 and in the coming years, but on the downside
fund closures are on the uptick, too
Despite a turbulent market environment and intensifying
competition, ETF sponsors continue to issue new products at a solid
recent filing data indicate pipelines for future
It is the debut of plans and for new ETFs and ETNs that shines a
light on another undeniable truth: Not all new ETPs will succeed,
but some will. In fact, a fair amount of funds that have debuted in
2012 are off to solid starts and that does not include the $2.7
billion PIMCO Total Return ETF (NYSE:
). Not surprisingly, the "Bill Gross ETF" is in a league of its own
when it comes to successful new ETFs.
recent Barron's piece
highlighted several new funds that are prospering.
We will look at some of those ETFs as well as add to the list
iShares MSCI Global Select Metals & Mining Producers Fund
In an already
crowded field for materials ETFs
, PICK has thrived, as Barron's noted. The fund has hauled in more
than $221 million in AUM since its February debut.
While PICK has clearly been a success, another pair of new
iShares mining funds have seen mixed AUM performances. The iShares
MSCI Global Gold Miners Fund (NYSE:
) and the iShares MSCI Global Silver Miners Fund (NYSE:
) have notched stellar gains in recent weeks as gold and silver
miners have surged, but the funds have just $41.4 million and $2.4
million in AUM, respectively.
In the case of RING, that is not too bad for an ETF that debuted
in February. However, both RING and SLVP prove it is tough to go up
against well-established competitors such as the Market Vectors
Gold Miners ETF (NYSE:
) and the Global X Silver Miners ETF (NYSE:
Market Vectors Preferred Securities ex Financials ETF (NYSE:
Van Eck, parent company of Market Vectors, looks like it has
struck gold with PFXF to this point. It is not surprising because
PFXF has multiple selling points. For starters, are craving yield
and PFXF features a 30-day SEC yield of 6.21 percent.
Second, PFXF is truly unique in that it is the only ETF tracking
preferred stocks that does not feature an absurd weight to
financial services names. REITs account for a third of the fund's
weight, but that is nothing compared to the 80 percent or higher
allocation given to bank stocks by other preferred stock ETFs.
Next, PFXF's expense ratio of 0.4 percent makes it the cheapest
preferred stock ETF on the market.
Add all that up, and it is not surprising that the ETF has $67.3
million in AUM in just three months of trading.
iShares MSCI Frontier 100 Index Fund (NYSE:
It might not be fair to include the iShares MSCI Frontier 100
Index Fund on this list because the fund is just starting its
second full week of trading. That said, the newest entrant to the
frontier market ETF competition is off to a banner start with
almost $13 million in assets under management.
FM's debut was widely anticipated in some corners of the ETF
industry and despite the elevated risk involved with frontier
markets compared to emerging economies, FM has thus far lived up to
the hype. Some might say it is too early to hop on the FM bandwagon
and what could prove integral to the fund's success going forward
is its ability to provide some form of decent liquidity in markets
with a reputation for being illiquid.
fact sheet indicates measures are in place
to bolster liquidity and if the fund makes good on that, it could
be one of the more popular new products of 2012.
SPDR Barclays Capital Short Term High Yield Bond ETF (NYSE:
The SPDR Barclays Capital Short Term High Yield Bond ETF is an
interesting case. One cannot look at this ETF and gloss over a
modified adjusted duration of just over two years, meaning the fund
is more exposed to changes in interest rates than its longer
Additionally, SJNK is completely overshadowed in junk bond ETF
conversation by the iShares iBoxx $ High Yield Corporate Bond Fund
) and the SPDR Barclays Capital High Yield Bond ETF (NYSE:
). Perhaps "overshadowed" is too harsh an assessment. SJNK has
accumulated almost $289 million in AUM since its mid-March debut.
That puts the fund in position to be one of this year's most
successful new ETFs of any kind and probably no worse than the
second-best new bond ETF in terms of AUM behind the PIMCO Total
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