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New Barclays ETFs Crowd TD Ameritrade’s Turf
November 10, 2008
SAN DIEGO (ETFguide.com) - Friday was a big day for Barclays Global Investors. BGI launched a series of target date ETFs, a series of risk based ETFs and fixed income bond ETFs.
In the mutual fund segment, target date funds (also called life-cycle or age-based funds) have been wildly popular, accounting for $184 billion in assets as of the end of 2007. Target date funds have been dubbed a retirement plan on autopilot.
Target date funds automatically adjust the ratio between equities and fixed income as you get closer to your retirement date (target date). Target date funds appeal to 401(k) owners who prefer to leave the research and allocation models up to fund managers.
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TD Ameritrade in cooperation with XShares Advisors was the first to introduce target date ETFs. The set of six TDX Independence ETFs account for $150 million in assets. The performance of two TDX retirement funds has been quite impressive. Five of six have out performed the S&P 500 by a large margin (AMEX: SPY). Unlike the new iShares ETFs, the TDX series of target date ETFs consists of individual stocks and bonds (read related article here).
The new suite of iShares ETFs includes eight target date ETFs and four risk based ETFs. Both are based on Standard and Poor’s Indexes:
New target-date iShares:
iShares S&P Target Date Retirement Income Fund (NYSEarca: TGR) – expense ratio: 0.31%
iShares S&P Target Date 2010 Index Fund (NYSEarca: TZD) – expense ratio: 0.31%
iShares S&P Target Date 2015 Index Fund (NYSEarca: TZE) – expense ratio: 0.31%
iShares S&P Target Date 2020 Index Fund (NYSEarca: TZG) – expense ratio: 0.31%
iShares S&P Target Date 2025 Index Fund (NYSEarca: TZI) – expense ratio: 0.30%
iShares S&P Target Date 2030 Index Fund (NYSEarca: TZL) – expense ratio: 0.30%
iShares S&P Target Date 2035 Index Fund (NYSEarca: TZO) – expense ratio: 0.30%
iShares S&P Target Date 2020 Index Fund (NYSEarca: TZV) – expense ratio: 0.29%
New risk-based iShares:
iShares S&P Conservative Allocation Fund (NYSEarca: AOK) – expense ratio: 0.31%
iShares S&P Moderate Allocation Fund (NYSEarca: AOM) – expense ratio: 0.32%
iShares S&P Growth Allocation Fund (NYSEarca: AOR) – expense ratio: 0.33%
iShares S&P Aggressive Allocation Fund (NYSEarca: AOA) – expense ratio: 0.34%
Risk-based iShares allocation:
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Underlying Funds
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Aggressive
NYSEarca: AOA
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Growth
NYSEarca: AOR
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Moderate
NYSEarca: AOM
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Conservative
NYSEarca: AOK
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S&P 500 - IVV
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32.9%
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28.6%
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19.0%
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10.3%
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S&P 400 – IJH
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22.0%
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10.4%
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6.0%
|
3.0%
|
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S&P 600 – IJR
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8.0%
|
5.0%
|
3.0%
|
2.0%
|
|
MSCI EAFE – EFA
|
20.0%
|
19.0%
|
15.0%
|
8.0%
|
|
MSCI Emerg. - EEM
|
8.1%
|
5.0%
|
1.7%
|
0.7%
|
|
Aggr. Bond - AGG
|
5.0%
|
11.0%
|
17.3%
|
17.0%
|
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Short Treas. – SHV
|
0.0%
|
10.0%
|
20.0%
|
28.0%
|
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TIPS - TIP
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4.0%
|
10.0%
|
15.0%
|
27.0%
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Realty - ICF
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0.0%
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1.0%
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3.0%
|
4.0%
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The iShares suite of target-date and risk-based ETFs follow a “fund of funds” or ETF of ETFs solution and as such consist exclusively of iShares ETFs. Unlike the PowerShares suite of ETFs made of ETFs, the iShares expense ratio includes the fees of the component ETFs while Powershares charges 0.25% in addition to the component ETFs expense ratio.
The new iShares S&P Short Term National Municipal Bond Fund (NYSEarca: SUB) competes against three already existing municipal bond funds (Market Vectors Short Municipal – AMEX: SMB, PowerShares VRDO Tax-Free Weekly Portfolio – AMEX: PVI, SPDR Lehman Short Term Municipal Bond – NYSEarca: SHM).
The iShares Barclays Agency Bond Fund (NYSEarca: AGZ) is the first ETF under the Barclays index brand, previously known as Lehman Brothers. AGZ includes a broad spectrum of government agency debt.
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New fixed income ETFs:
iShares S&P Short Term National Municipal Bond Fund (NYSEarca: SUB)
iShares Barclays Agency Bond Fund (NYSEarca: AGZ) |
