by Kyle Woodley | June 25, 2012 12:02 pm
Exchange-traded product releases picked up the pace last week, and did so in varietal form, with new funds delivering flavors from MLPs to bonds to a little bit of responsibility.
The First Trust North American Energy Infrastructure Fund (NYSE:EMLP) shouldered its way into the crowded sector of MLP funds. EMLP’s hope is for “total returns,” leveraging both the growth in various energy infrastructure companies and the fantastic dividends of MLPs and other income vehicles, such as income trusts and utilities. Companies have to bring in at least 50% of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries.
Thus, top holdings include partnerships like Kinder Morgan Management (NYSE:KMR) and Enbridge Energy (NYSE:EEQ), as well as pipeliners TransCanada (NYSE:TRP) and Williams Co. (NYSE:WMB) and utility Dominion Resources (NYSE:D).
First Trust’s ETF is at a bit of a disadvantage by coming in late to a field with several established funds, such as the Alerian MLP ETF (NYSE:AMLP) and the Yorkville High Income MLP ETF (NYSE:YLMP). It’s also behind in expenses — EMLP charges 0.95% in fees vs. 0.85% for AMLP and 0.82% for YMLP, and it’s almost double relative newcomer Global X MLP ETF (NYSE:MLPA), which charges a paltry 0.45%.
My home state of Ohio made a little bit of news, as Columbus-based Huntington Bancshares (NASDAQ:HBAN) became the first regional bank to offer an ETF when it launched the Huntington EcoLogical Strategy ETF (NYSE:HECO).
However, while the name might suggest a portfolio of small-time solar and wind companies, HECO actually focuses on businesses that “demonstrate environmental stewardship” and “advance green practices.”
“Many green funds emphasize nascent technologies like wind and solar because they are clean, without regard to whether that’s a logical investment,” said Randy Bateman, Huntington’s chief investment officer and president of Huntington Asset Advisors. “Our approach looks at those opportunities, but then applies logic around whether or not that company is producing products that are affordable by broad markets.”
Which is why HECO is able to carry such companies as traditional “do-gooder” Whole Foods Market (NASDAQ:WFM), as well as eBay (NASDAQ:EBAY), Walt Disney (NYSE:DIS) and Ford (NYSE:F) among its 25 holdings. HECO charges 0.95% in fees.
State Street’s (NYSE:STT) Global Advisors division gave two more nods to yield as it unleashed a pair of corporate bond funds, the SPDR BofA Merrill Lynch Crossover Corporate Bond ETF (NYSE:XOVR) and the SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (NYSE:EMCD).
XOVR holds 112 U.S. dollar-denominated debt securities in the “crossover” range (between higher-rated high-yield debt and lower-rated investment-grade debt, so BBB1-BB3), while EMCD holds 80 U.S. dollar-denominated emerging-market corporate senior and secured debt securities. EMCD is the latest in a string of new emerging-market corporate debt funds. Competitors include the iShares Emerging Markets Corporate Bond Fund (BZX:CEMB), which launched in April, and the Wisdom Tree Emerging Markets Corporate Bond Fund (NASDAQ:EMCB), which launched in March.
XOVR charges 0.3%, while EMCD charges 0.5%.
The last fund coming live was the United States Metals Index Fund (NYSE:USMI), which gives investors access to futures contracts in 10 different metals — aluminum, copper, gold, lead, nickel, palladium, platinum, silver, tin and zinc. The fund rebalances monthly, and it currently does not hold any palladium futures. USMI charges 0.7% in fees.
Including last week’s launches, June has seen nine new products come to market, with 122 new funds out so far in 2012, according to XTF.com. The previous week’s new ETFs offer investors looks at alternative energy and fast earnings growth.
Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley.
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