ETF Times: 5 - 9 April
Last week saw a rush of new ETF launches, covering the FTSE 250, eurozone government bonds, real estate, and much more
HSBC launched its fifth ETF last week. The fund tracks the FTSE 250 index, and trades on the London Stock Exchange. With a total expense ratio of 0.35%, the new physical replication ETF may be able to take some market share from iShares FTSE 250 ETF which charges 0.4% and also uses physical replication, although there are three swap-based funds tracking the index which each charge 0.35% annually.
Comstage listed three new ETFs on Xetra tracking German covered bond indices of varying maturities. Covered bonds are a debt instrument issued by financial institutions but which are typically safer than unsecured debt as they are secured by a pool of mortgage loans to which investors have a claim in the event of default. The three new ETFs each have an expense ratio of 0.17% annually. Comstage’s offerings will compete with existing products from db x-trackers, ETFlab, iShares and Lyxor.
Deutsche Bank’s db x-trackers platform launched seven leveraged ETFs, including long and inverse products, based on common equity indices on the Frankfurt Xetra exchange. The three inverse products provide two times the daily return of the Dax, EURO STOXX 50 and S&P 500, and the four long products include those indices as well as the FTSE 100. The ETFs should have an audience among institutional investors taking tactical positions who don’t want to use derivatives or go short by borrowing ETF shares, and Deutsche Bank’s own research shows that this market accounts for around 20% of European ETF volume. The firm plans to list the ETFs on the Borsa Italiana on April 14 and the London Stock Exchange on April 26.
Amundi continues to keep busy, listing 20 ETFs on Xetra. Six of the new funds track the daily inverse performance of the eurozone government bond market with varying maturities of 1 to 15 years, allowing investors to gain exposure to all parts of the yield curve. Four of the ETFs track commodity segments including agriculture, precious metals, industrial metals and energy, as well as a commodity ex-energy fund. Finally, the firm also listed ten new equity ETFs, tracking MSCI country indices such as Brazil, Eastern Europe ex Russia, non-EMU Europe, Scandinavia, Switzerland and the UK, as well as sector-based indices like MSCI World Financials, MSCI World Energy and an index comprising 25 of the top real estate companies across Europe. All of the ETFs are swap-based.
Source continues to build upon its base of sector ETFs with four new products launched on the Xetra exchange. The Market Quartile range tracks STOXX indices which divide the equity market based upon a company’s exposure to the economic cycle. For instance, the Consumer Discretionary sector includes companies which produce non-essential goods and services which profit from an economic upswing, such as luxury goods manufacturers, while the Defensive sector’s companies are not affected much by the economic cycle, and include companies like utilities. Consumer Staples companies include food and beverage companies which produce goods in all phases of the economic cycle, and the Cyclicals sector includes companies which are sensitive to economic fluctuations. The ETFs will allow investors to tactically allocate their portfolio based on macroeconomic trends. Source charges an annual management fee of 0.30% for these ETFs.
Best and Worst Performers for the week of April 5 - 9
With spot gold prices breaching the $1,150 barrier for the first time this year, it was no wonder that gold-related ETFs dominated the list of best-performing ETFs for the week. Other precious metals including silver and palladium were also popular, as investors searched for protection from potential inflation.
Greek equity ETFs topped the list of worst performers of the week, as the turmoil surrounding the bail out package took a turn for the worse, although an agreement has since been announced.
