5 New ETFs Play With Bonds and Beans

by Kyle Woodley | April 2, 2012 12:47 pm

5 New ETFs Play With Bonds and Beans

While bonds were the most prevalent theme among last week’s five new exchange-traded fund offerings, the most interesting could be found in the dirt.

The Teucrium Agricultural Fund (NYSE:TAGS[1]) is a first-of-its-kind agricultural fund-of-funds meant to give investors exposure to four commodities: corn, soybeans, sugar and wheat. Thus, it has just four holdings, with equal weightings doled out to four commodity funds:

CORN, the largest of the four funds at $65 million in total assets, has been the worst-performing of the quartet year-to-date, down about 6.5%. WEAT has shed almost 6%, too, while CANE is up about 4% and SOYB is up around 9%. CORN charges 0.32% in expenses.

The remaining four ETFs stuck to bonds. Guggenheim released three funds for corporate bonds that expire in 2018, 2019 and 2020 — BSCI, BSCJ and BSCK, each at 0.24% expense ratios — but the fund of note came from ProShares, which launched an inverse triple-leveraged bond fund, the ProShares UltraPro Short 20+ Year Treasury ETF (NYSE:TTT[6]).

TTT, like its 2X cousin, the ProShares UltraShort 20+ Year Treasury ETF (NYSE:TBT[7]), tracks the Barclays Capital U.S. 20+ Year Treasury Index. As always, investors should be aware of the risk that such a multiple-leveraging fund can multiply your losses, as well as the risks involved in the compounding of daily returns, which ProShares succinctly explains here[8]. TTT charges 0.95% in expenses.

And while PIMCO didn’t launch any new funds last week, the company did make a pair of headlines. Today, Bill Gross, manager of the Total Return Fund (MUTF:PTTRX[9]) and the recently launched Total Return ETF (NYSE:TRXT[10]), told CNN Money that PIMCO is preparing to create other actively managed ETFs[11]. And, starting April 4, the quickly popular TRXT fund will be getting a name change, to BOND.

All in all, 85 new funds launched during the first quarter of 2012, according to XTF.com. The previous week’s launches were small in number, but varying in flavor[12].

Kyle Woodley[13] is the assistant editor of InvestorPlace.com[14]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[15].

Endnotes:
  1. TAGS: http://studio-5.financialcontent.com/investplace/quote?Symbol=TAGS
  2. CANE: http://studio-5.financialcontent.com/investplace/quote?Symbol=CANE
  3. CORN: http://studio-5.financialcontent.com/investplace/quote?Symbol=CORN
  4. SOYB: http://studio-5.financialcontent.com/investplace/quote?Symbol=SOYB
  5. WEAT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WEAT
  6. TTT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TTT
  7. TBT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TBT
  8. succinctly explains here: http://www.proshares.com/funds/performance/the_universal_effects_of_compounding.html
  9. PTTRX: http://studio-5.financialcontent.com/investplace/quote?Symbol=PTTRX
  10. TRXT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TRXT
  11. preparing to create other actively managed ETFs: http://money.cnn.com/2012/04/01/markets/bondcenter/pimco-bill-gross-etf/index.htm?iid=HP_LN
  12. small in number, but varying in flavor: http://investorplace.com/2012/03/plenty-of-flavor-in-new-etfs-qqqe-rwxl-idxj/
  13. Kyle Woodley: http://investorplace.com/author/kyle-woodley/
  14. InvestorPlace.com: http://investorplace.com/
  15. @KyleWoodley: https://twitter.com/#%21/kylewoodley

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