Two New ETFs For European Bond Markets

Despite the economic uncertainty that continues to prevail in Europe, New York-based ETF provider, Van Eck Global, recently filed plans to launch two new ETFs that will enable investors to play the European bond markets.

According to the filings with the Securities and Exchange Commission, the first fund is expected to be the Market Vectors Sovereign Bond ETF which is expected to be designed to track the performance of local currency-denominated bonds of sovereign issuers located in Europe, excluding Russia.  Furthermore, bonds eligible for inclusion in the Index must be issued by European country governments, sovereigns, quasi-sovereigns or government-backed entities and must be rated “Baa3” or above by Moody’s or “BB-” or above by S&P or Fitch for long-term debt obligations and equivalent ratings for short-term debt obligations.

Five ETFs To Play Spread Trades

Recently, New York-based asset management firm, FactorAdvisors announced the launch of the first ever family of spread exchange traded funds (ETFs) which will enable investors to simultaneously hold a long and short position in one leveraged ETF. 

These new ETFs are designed to simplify spread trading and lower the transaction costs behind implementing such a strategy.  Furthermore, these new ETFs are designed to rebalance daily to achieve the desired effect of maintaining dollar neutrality.   The FactorShares ETFs are designed to target a daily leverage ratio of 4:1, where each dollar invested provides approximately two dollars of long futures exposure and two dollars of short futures exposure, immediately after daily rebalancing.  Although these new products offer exposure to a niche market and strategy, it is important to keep in mind that these ETFs seek investment results for a single day’s performance and rebalances on a daily basis. 

Supply And Demand To Boost New Metals ETF

As the overall health of the US labor force continues to remain in question and Central Banks in the developed world continue to implement loose monetary policies, the appeal of metals remains intact resulting in the introduction of ETF Securities newest metals ETF, the ETFS Physical White Metals Basket Shares (WITE).

WITE, which started trading today, is the first US physically backed ETF to exclusively hold silver, platinum and palladium in equal fixed weights.  According to the prospectus, the Shares of WITE represent beneficial interest in the Trust, which holds physical allocated silver, platinum and palladium bullion held in vaults by the JP Morgan Chase (JPM). The silver is expected to be held in vaults in London, while Platinum and Palladium are expected to be held in London or Zurich.   

Three Possible New ETFs To Play Commodities

As commodity ETFs have witnessed increased investor demand and increased returns over this year, there have many new resource-specific ETFs brought to market and now the United States Commodity Funds plans to introduce three more funds giving exposure to copper, agriculture and metals. 

The three aforementioned resource-specific commodity sub-sectors have been at the pinnacle of performance during the last 12 months and are expected to continue to shine in the near future.  Copper, which is used in pipes, tubing, wires and other industrial uses, is expected to witness increased demand over the next few years as global economies, in particularly in emerging markets like China and India, continue to grow.  In fact, global demand of copper is expected to outpace supply in 2011, the first time in four years, giving the metal even further positive price support.

4 New Financial ETFs To Be Launched By PowerShares

In an attempt to sustain a competitive advantage in the ever growing exchange traded fund (ETF) world, PowerShares plans to launch four new financial sector specific ETFs to its arsenal on December 2^nd, 2010.

The first will be the PowerShares KBW Premium Yield Equity REIT Portfolio (KBWY) which is based on the KBW Premium Yield Equity REIT Index. The Fund will normally invest at least 90%of its total assets in securities that comprise the Underlying Index, which uses a dividend yield weighted methodology that seeks to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the United States.

New Uranium ETF Supported By Demand For Nuclear Energy

As emerging markets continue to grow and have insatiable energy demand, there are numerous reasons to watch nuclear energy and the Global X Uranium ETF (URA). 

URA will be the first ETF to give exposure to a global pool of companies which include uranium miners, refiners and equipment makers.  Uranium is important because it is a primary component in the production of nuclear energy and is used in nearly 4 percent of the globe’s traditional non-renewable energy. 

A New ETF To Play Precious Metals

As the appeal for precious metals continues to prevail, ETF provider, ETF Securities, announced that its newest product, the ETFS Precious Metals Basket (GLTR), will begin trading on the NYSE Arca tomorrow.

This new ETF will be the first of its kind enabling investors to gain access to physically backed gold, silver, platinum and palladium all in one security. The actual gold, silver, platinum and palladium bullion that the ETF is backed by is expected to be held by the trust, vaulted in London and Switzerland and inspected biannually by the independent metal assayer, Inspectorate International. 

PIMCO Introduces Build America Bond ETF

Pimco, one of the world’s largest bond firms, just launched its latest municipal exchange traded fund (ETF), the Pimco Build America Bond Strategy Fund (BABZ).

 BABZ will carry an expense ratio of 0.45% and aims to achieve its investment objective in focusing its asset base on taxable municipal debt securities which are publicly issued under the President Obama’s Build America Bond program.  Furthermore, the fund generally invests in U.S. dollar denominated fixed income instruments that are investment grade but may allocate a percentage of assets to higher yield junk bonds which have a higher likelihood of default. 

In regards to characteristics of Build America Bonds, they are special municipal bonds designed to help municipalities raise money to invest in infrastructure projects.  The bonds are taxable; however, the Federal government pays a 35% subsidy on the interest payments to offset the tax hit.   Additionally, issuance of Build America Bonds will cease on December 31, 2010 unless the relevant provisions of the American Recovery and Reinvestment Act of 2009 are extended. In the event that the Build America Bond program is not extended, the Build America Bonds outstanding at such time will continue to be eligible for the federal interest rate subsidy, which continues for the life of the Build America Bonds; however, no bonds issued following expiration of the Build America Bond program will be eligible for the federal tax subsidy.

A New ETF To Play Global Demand Of Natural Resources

As the demand for natural resources has jumped and is expected to continue to do so due to increased wealth in developing nations and a growing global population, State Street recently launched the SPDR S&P Global Natural Resources ETF (GNR) to enable investors to gain access to the sector.

The new ETF will track the S&P Global Natural Resources Index, which is an index comprised of 90 of the largest publicly traded companies, based on market capitalization, in global natural resources and commodities businesses that meet certain investibility requirements .    Companies that are included in global natural resources include those which are engaged in agriculture, integrated oil and gas, oil and gas drilling, oil and gas exploration and exploration, oil and gas refining, coal and consumable fuels, diversified metals and mining, steel, aluminum, gold and other precious metals. 

A New ETF To Play The Emerging Market Consumer

In an attempt to offer investors yet another way to gain exposure to growing consumers in emerging markets, ETF provider, EGShares, launched the Emerging Markets Consumer ETF (ECON).

Data suggests that in the coming years consumers in emerging markets are going to be the true drivers of the global economy.  In fact, according to a research study conducted by McKinsey & Co., the rapidly expanding middle class of emerging nations is currently spending nearly $6.9 trillion annually and is expected to reach $20 trillion during the next decade.  Furthermore, the report indicates that income on a per-capita basis in these regions is expected to increase significantly with India expected to a near four-fold increase in average national income, with aggregate consumption to follow.