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ETF Roundup: New Offerings
June 4, 2010
SAN DIEGO (ETFguide.com) – Assets invested in U.S. listed exchange-traded funds (ETFs) declined by $47.23 billion during the month of May. Declining assets were triggered by weakness in the global equity market and the slumping euro dollar (NYSEArca: FXE).
Stock ETFs were particularly weak as the Dow Jones Industrial Average (NYSEArca: DIA) suffered its worst performing May in 70 years. Still, ETF assets at the end of May 2010 increased by an impressive $200 billion or 34 percent year-over-year.
The number of ETF offerings over the past year has grown to 902 funds from 744, according to the National Stock Exchange. By comparison, there were just 93 exchange-traded notes (ETNs). ETNs are bond like instruments which are linked to the performance of currencies, commodities or stock indexes.
The top three ETF providers in terms of assets under management at the end of May were BlackRock ($368 billion), State Street Global Advisors ($186.20 billion) and the Vanguard Group ($103.06 billion).
New ETF Offerings
The United States Brent Oil Fund, LP (NYSEArca: BNO) was introduced this week. BNO is designed to track the daily changes in the spot price of Brent crude oil.
The Brent crude oil contract is the second most liquid commodity futures contract in the world, after West Texas Intermediate itself and ahead of gold and natural gas. Brent trades in U.S. dollars on the ICE Futures Exchange in London.
BNO’s portfolio consists primarily of investments in futures contracts for crude oil, heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the ICE Futures Exchange, the New York Mercantile Exchange (NYMEX), or other U.S. and foreign exchanges.
BNO also invests in short-term U.S. treasuries with remaining maturities of two years or less along with cash equivalents to be used to meet its current or potential margin or collateral requirements with respect to its positions in futures contracts.
BNO’s annual expenses are 0.75 percent.
In other new ETF offerings, Invesco PowerShares, introduced the PowerShares International Corporate Bond Portfolio (NYSEArca: PICB). The Wheaton, IL-based company now offers a total of 10 bond ETFs.
PICB is linked to the S&P International Corporate Bond Index which measures the performance of investment-grade corporate bonds issued by non-U.S. issuers in the following G-10 currencies: Australia dollar (AUD), British pound (GBP), Canadian dollar (CAD), Euro (EUR), Japanese yen (JPY), Swiss franc (CHF), Danish krone (DKK), New Zealand dollar (NZD), Norwegian krone (NOK) and Swedish krona (SEK). Fund holdings use a modified market cap weighting strategy and are rebalanced monthly.
PICB plans to make monthly income distributions and its annual expense ratio is 0.50 percent. |
