UBS, Emerging Global And iShares Unveil New ETFs

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UBS, Emerging Global Advisors and iShares all unveiled a batch of new ETFs and an ETN this week. Here's an overview.

Super-Sized Mortgage REITs

UBS has rolled out a new exchange traded note designed to double the returns and dividends of theMarket Vectors Mortgage REITs Income ETF ( MORT ). The ETRACS Monthly Pay 2xLeveragedMortgage REIT ETN ( MORL ) debuted Oct. 17, boasting a fat 24.82% annual dividend yield.

The underlying index is most heavily weighted inAnnaly Capital Management ( NLY ) at 19% of assets,American Capital Agency ( AGNC ) 15%,Two Harbors Investment ( TWO ) 5%,MFA Financial (MFA) 5% andHatteras Financial (HTS) 5%.

It charges a low annual fee of 0.40% of assets -- far less than the 1% usually charged by leveraged ETFs.

Mortgage real estate investment trusts raise money by getting short-term loans to issue mortgages and buy longer-termed, higher-yielding mortgage-backed securities. They make money on the difference between their short-term borrowing costs and the yield on their longer-term investments. As REITs, they must distribute at least 90% of their income each year to investors in the form of dividends.

MORT has appreciated 25% year to date and 33% in the past 12 months. It now yields 9.43%.

As an ETN, MORL's value is subject to UBS' credit quality and a ratings downgrade of the company may affect share prices regardless of the underlying stocks. ETN holders could lose their money if UBS goes bankrupt or is unable to pay its debts.

Broader Emerging Market ETF

Emerging Global Advisors, specializing in emerging market ETFs, has released a new fund it says offers more accurate exposure to developing countries than existing ETFs.

EGShares Emerging Markets Core ETF (EMCR), tracking the S&P Emerging Markets Core Index, holds stocks from China, South Africa, India, Brazil, Russia, Chile, Malaysia and Mexico. It excludes Korea and Taiwan because EGA doesn't consider those countries developing markets due to their big tech industries and economic wealth. Korea and Taiwan are included in bellwether iShares MSCI Emerging Markets Index (EEM).

EMCR holds 108 stocks and is most heavily weighted in consumer staples at 18% of assets, consumer discretionary 17%, financials 16%, industrials 10%, utilities 7%, info tech 7%, energy 7%, health care 6%, basic materials 6% and telecom 5%.

EGA says it offers more balanced exposure to developing countries than major emerging market ETFs, which overweight financials and energy stocks that are dependent on global growth. EMCR's overweighting in consumer stocks offers more exposure to internal growth and demand.

EMCR charges an annual management fee of 0.7% of assets.

iShares New Core ETFs

IShares -- the world's biggest ETF provider -- unveiled a new Core family of ETFs by rolling out some new funds and renaming existing funds. Most got new tickers and fees were cut on six funds.

They include:

iShares Core S&P Total U.S. Stock Market ETF (ITOT) (previously ISI).

iShares Core S&P 500 ETF (IVV).

iSharesCore S&P Mid-Cap ETF (IJH).

iShares Core S&P Small-Cap ETF (IJR).

iShares Core MSCI Total International Stock ETF (IXUS).

iShares Core MSCI Emerging Markets ETF (IEMG).


iShares Core Total U.S. Bond Market ETF (AGG).

iShares Core Long-Term U.S. Bond ETF (ILTB)(previously GLJ).

iShares Core Short-Term U.S. Bond ETF (ISTB).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , ETFs
Referenced Symbols: AGNC , MORL , MORT , NLY , TWO

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