EGShares Plans Emerging Market ETFs With A Twist, ALPS Files For High Volatility Fund
Fri, Jan 27, 8:14 AM ET, by Michael Johnston
The ETF industry is off to a hot start in 2012 as new products continue to roll out by the plateful while the economic backdrop has also improved considerably, paving the way for growth on all fronts [see Early ETF Stars Of 2012]. Leaders in the emerging markets product space, EGShares, have filed with the SEC for new products that allow for a creative way to tap into the developing world. ALPS is also planning to roll out an intriguing product that stands to benefit if the recent optimism on Wall Street is here to stay.
EGShares is planning to launch two ETFs that would add to the firm’s already impressive emerging markets product lineup [see SEC Filing]:
- EGShares Beyond BRICs ETF: This fund will seek investment results that correspond to the price and yield performance of the INDXX Beyond BRICs Index, and will also feature a 0.85% expense fee. The underlying index is market cap weighted and consists of 50 leading companies, spread out across all industries, from emerging market countries, excluding allocations to Brazil, Russia, India, and China [see Forget The BRIC, Your Portfolio Needs The TICK]. This new fund may be useful in allowing for investors to round out their international exposure beyond the biggest emerging markets.
- EGShares Emerging Markets Domestic Demand ETF: This fund will seek investment results that correspond to the price and yield performance of the INDXX Emerging Markets Domestic Demand Index, and will also charge 0.85% in expenses. The underlying portfolio will consist of 50 leading emerging markets companies that are deemed to be favorably positioned to benefit significantly from strong industrial and consumption growth occurring in middle income nations around the globe [see Special Report: Emerging Market ETFs]. From a sector breakdown perspective, this ETF will feature allocations to consumer services, health care, telecommunications, and utilities.
Denver-based ALPS is planning to debut a volatility ETF that will give investors access to an intrguing options trading strategy [see SEC Filing]:
- U.S. Equity High Volatility Put Write Index Fund (HVPW): This ETF will seek to track the NYSE Arca U.S. Equity High Volatility Put Write Index, and will charge a 0.95% expense fee. The underlying index will track a hypothetical portfolio consisting of put options which have been sold on each of 20 large cap stocks deemed to have the highest volatility. The put options will have 60-day terms and by selling the options the fund will receive premiums from buyers, which will increase in value if the option are not exercised and expire worthless. Additionally, the fund’s cash component will be invested in 3-month Treasury bills. If optimism continues to build on Wall Street, this ETF may profit big time as high volatility stocks can clinch impressive gains during bull markets.
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Disclosure: No positions at time of writing.
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