Fidelity joins Canada’s ETF market with six dividend funds
No-one cares about Canada or its ETFs. Everyone is too busy looking at the US ETF market, to take notice of its northern neighbour. Which is a shame, because the $164bn Canadian ETF market is one of the largest and most innovative in the world. Canada – unknown to most – was where the world’s first ETF was made, when the Toronto Stock Exchange introduced the Toronto 35 Index Participation Fund in 1990. It's now in the frontline on the battlefield against exchange fees and high-frequency trading.
Today, mutual giant Fidelity is announcing its Canadian ETF ambitions. Arriving in Canada’s ETF party 28 years late, Fidelity brings six new dividend listings. The new funds will offer Canadians dividend cheques of all shapes and sizes.
- Fidelity Canadian High Dividend Index ETF (FCCD)
- Fidelity US Dividend for Rising Rates Index ETF (FCRR)
- Fidelity US Dividend for Rising Rates Currency Neutral Index ETF (FCRH)
- Fidelity US High Dividend Index ETF (FCUD)
- Fidelity US High Dividend Currency Neutral Index ETF (FCUH)
- Fidelity International High Dividend Index ETF (FCID).
The ETFs are all fairly biscuit tin and do what they say on the fund names. The logic behind the rising rates funds is that some high dividend shares – like banks, REITs, and utilities – can struggle when rates rise as they have more debt. This can lead to dividend portfolios struggling in rising rate environments.
Samsung lists two bonds and a battery ETF
Korea’s number 1 chaebol Samsung is listing three new ETFs, two of which offer exposure to ultra t-bond futures, one of which offers exposure to battery tech.
- Samsung KODEX Ultra T-bond Futures H ETF (304660)
- Samsung KODEX Ultra T-bond Futures Inverse H ETF (304670)
- Samsung KODEX Secondary Battery Industry ETF (305720)
Ultra T-bond futures are a CME Group ruse. They were invented to provide investors access to 30-year bonds after the US Treasury briefly stopped issuing them. From what we understand, they are quite niche derivatives mostly used by sophisticated futures traders and duration managers. We are unsure what the appeal of an inverse Ultra T bond ETF would be to retail investors in Korea.
The battery industry ETF is more straightforward. Like other battery listings around the world of late, it provides exposure to advances in battery technology. It will track the FnGuide Secondary Battery Industry Index. (Available here for Korean speakers).
Mirae also lists battery technology ETF
In keeping with the Korean tradition of having competitor products list on the same day, Mirae Asset is also listing a battery tech ETF to go head to head with Samsung’s. The Mirae Asset Tiger Secondary Cell ETF (305540) will track the WISE Secondary Cell Theme Index, which also provides battery technology exposure.