USA
Global X puts two fads together
ETFs tracking preferred securities have been in vogue of late, so too have covered call ETFs. And now Global X has put the two together in a single product, called the Global X U.S. Preferred ETF (PFFD).
PFFD will invest 80% of its fund in preferred securities through the BofA Merrill Lynch Diversified Core U.S. Preferred Securities Index. Because it is unrealistic to buy all the whole the index, PFFD will use representative sampling and buy just some of them.
The fund will also commit up to 20% of its weight to buying and selling call options, allowing the fund to collect a steady stream of income.
Goldman Sachs opts for equal weight index
Goldman Sachs is listing an equal weighted large cap tracker in the US, The Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW). GSEW will track an index that looks for all intents and purposes like the S&P500, only its provided by Solactive, whose indexes are cheaper to use. The index will weigh the companies equally.
The choice of an equally weighted index is interesting. Large cap equal weight indexes have outperformed their market weighted counterparts in most years. Particularly notable has been the Guggenheim S&P 500 Equal Weight ETF (RSP), which has beaten the SPRD S&P500 (SPY) in almost every year since 2003. Equal weighting gives smaller companies more influence, and thus equal weight indexes are more exposed to the “small-cap premium”.
Nationwide joins ETF game
Insurance giant Nationwide will be listing three new ETFs in the US that target risk and diversification. They are:
· Nationwide Risk‐Based U.S. Equity ETF (RBUS)
· Nationwide Risk‐Based International Equity ETF (RBIN)
· Nationwide Maximum Diversification U.S. Core Equity ETF (MXDU)
RBUS will track US large caps that have been risk assessed by Rothschild Investments. The risk assessment ranks companies based on volatility, correlation, drawdown and Sharpe ratio. RBIN will use a similar risk assessment to RBUS, but it will chose securities from 19 developed countries excluding North America. Companies chosen will be equally weighted at around 5%.
MXDU will also be risk-assessed and invest in US large caps, but will add a socially responsible investment filter to the index. MXDU will track an index provided by Tobam, a French investment house known for its diversity and SRI approach.
UK
Deutsche Bank cross-lists US sector trackers onto London Stock Exchange
Deutsche Bank has cross-listed six US sector trackers onto the LSX. They are:
· db x-trackers MSCI USA Energy Index UCITS ETF (XUEN)
· db x-trackers MSCI USA Financials Index UCITS ETF (XUFN)
· db x-trackers MSCI USA Health Care Index UCITS ETF (XUHC)
· db x-trackers MSCI USA Information Technology Index UCITS ETF (XUTC)
· db x-trackers MSCI USA Consumer Discretionary Index UCITS ETF (XUCD)
· db x-trackers MSCI USA Consumer Staples Index UCITS ETF (XUCS)
Each ETF will track its index physically.
