New ETFs From AdvisorShares, First Trust And KraneShares
ETF providers are lavishing ever more options on investors .
Here's an overview of three fresh funds that started trading on the stock market Wednesday.
KraneShares China A-Shares
KraneShares, an ETF provider specializing in the People's Republic of China, has built another path to the mainland market. KraneShares Bosera MSCI China AShare ( KBA ) holds a basket of stocks traded in Shanghai and Shenzen that are accessible only to citizens. The few foreign investors with access to these markets had to leap over regulatory hurdles.
The popular ASHR has swelled to $167 million in assets since its debut five months ago. It has tumbled 9% year to date, while its benchmark, iSharesMSCI Emerging Markets ( EEM ) fell 6%. PEK, which launched in October 2010, switched to holding A-shares in December. It's down 10% year to date.
KBA, co-managed by Bosera Investment Management, charges an annual management fee of 1.1%. That's higher than ASHR's 0.82% annual fee and PEK's 0.72% charge. KBA's holdings have not been released.
Economists and analysts alike are very bearish on China, where bubbles in the credit and real estate markets are seen waiting to explode.
"Uneven development, massive environmental problems, bad bank loans, reckless nonbank financing that the government cannot control, and a series of social problems have the government struggling to find the right mix of economic supercharging and long-term stability," The Jerome Levy Forecasting Center wrote in a report Feb. 24. "The tradeoffs are becoming increasingly unfavorable and frightening, and the financial situation may by now be too complicated for the government to fully stabilize conditions in the event of a crisis."
China's projected economic growth of 7% this year would be the slowest in 30 years.
The Levy center concludes: "If China has a major economic correction, its falling imports will jolt the global economy and markets, sending the emerging markets into recession, pulling down Europe, and ultimately dragging down the U.S. as well.
AdvisorShares introduced Wednesday an ETF of fat-dividend-paying, fixed-income ETFs.AdvisorShares YieldPro ( YPRO ) will be managed by the Elements Group, based in Irvine, Calif., which also managesAdvisorShares EquityPro (EPRO). It carries a rather high annual expense ratio of 1.42%. It currently holdsPowerShares Preferred (PGX), which currently yields 6.45%;AdvisorShares Peritus High Yield (HYLD), with a current yield of 9%; andVanguard Intermediate-Term Corporate Bond Index (VCIT), paying 3.2%.
Dorsey Wright Focus 5 ETF
First Trust Advisors, best known for niche ETFs, is rolling out Thursday an ETF of ETFs that holds First Trust sector or industry ETFs exhibiting the most relative strength based on Dorsey, Wright & Associates' ranking system. First Trust Dorsey Wright Focus 5 (FV) seeks to capture the five ETFs that are rising the fastest over a given period in hopes of outperforming the market. It will assess holdings weekly and replace ETFs that fall off the leaderboard. Holdings will be rebalanced periodically so that each one is equally weighted.
"DWA believes the design of the index allows them to identify major themes in the market, have exposure to those sectors whose price action is superior to others in the universe and eliminate exposure to those sectors whose price action is sub-par relative to others in the universe," First Trust said in a statement.
The holdings and management fee have yet to be disclosed. DWA offers 14 other ETFs through PowerShares based on its relative strength analysis.