Thursday, October 3, 2013

New Product Launches

Our previous post was about the ETFG Liquidation Watch and what data points we use to highlight products that are at higher risk of closure in the near future.  Today, we are going to take the other side of that and talk about product launches.  There has been 99 products that have come to the market so far this year and they span many asset classes and objectives.  Here are some high level statistics.

Number of Issuers with new ETPs: 26
Number of Commodity  ETPs: 4
Number of Currency  ETPs: 2
Number of Equity  ETPs: 64
Number of Fixed Income ETPs: 24
Number of Multi Asset ETPs: 5
Total AUM: $5.673 Billion
Largest new ETPs: $1.242 Billion

Looking through the list there are two trends emerging in the equity space.  The first isn't exactly a new one and that is the focus on High Dividend Yield.  Since interest rates have been so low for such an extended period of time, it's no surprise that there has been such a demand in the market place for alternative income.  We expect continued interest in this space, but all high dividend ETPs are not the same so make sure to check out their Tearsheet. The second trend is what we will broadly call volatility managed. This includes the popular low or minimum volatility products and the more recent "BuyWrite" strategies that focus on selling calls or puts to generate income and hedge risks.  Keep an eye on this group as they have the potential to help investors decrease risks in their portfolios.

On the fixed income side we are seeing more globally focused and actively managed ETPs.  There also has been a large push, mainly from Blackrock, into the target maturity ETFs.  This space was made popular by Guggenheim's BulletShares.  These products allow investors greater control in managing the duration of their portfolios.  As the investors try to understand and anticipate Taper on/off, they can express that view in a pretty granular fashion with these target maturity products.

Thanks for reading ETF Global® Daily Perspectives.

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