New ETFs Beat the Yield Drum to Death

by Kyle Woodley | July 23, 2012 11:21 am

The hills were alive with the sound of ETF launches last week. Six new products came to launch, and — brace yourself — half were dedicated to investors with a thirst for yield.

Of course, if you’ve been perusing the site, you’re actually familiar with the income-based funds. We tackled these three last week, so a quick summary:

• Global X SuperIncome Preferred ETF (NYSE:SPFF[1]): This exchange-traded fund from Global X bundles about 50 of the highest-yielding preferred stocks out there. Here’s a look at my recap of SPFF.[2]
• Market Vectors Preferred Securities ex Financials ETF (NYSE:PFXF[3]): Market Vectors launched this fund the same day SPFF came out[4]. Exactly what it sounds like, PFXF targets preferred securities, but it actually poo-poos financials’ preferreds — typically the most common series found in other funds.
• ETRACS Alerian MLP Index ETN (NYSE:AMU[5]): This exchange-traded note essentially is a stand-in for the now capped JPMorgan Alerian MLP Index ETN (NYSE:AMJ[6]), tracking an index dedicated to popular yield-wielders, master limited partnerships. Aaron Levitt dug into AMU[7].

So what else came through?

Invesco added to its line of technical funds with the launch of the PowerShares DWA SmallCap Technical Leaders Portfolio (NYSE:DWAS[8]). This puppy invests at least 90% of assets into about 200 small-cap stocks that are deemed by Dorsey, Wright & Associates to have strong relative technical characteristics, and charges 0.6% in fees. PowerShares also offers a general Technical Leaders fund (NYSE:PDP[9]), as well as emerging markets (NYSE:PIE[10]) and developed markets (NYSE:PIZ[11]) funds.

Also coming to life were a pair of leveraged currency funds: the ProShares Ultra Australian Dollar (NYSE:GDAY[12]) and ProShares UltraShort Australian Dollar (NYSE:CROC[13]) ETFs.

I’ll try not to roll my eyes at the tickers (oops, I failed), but they’re pretty much how they sound — double-leveraged funds tracking the Australian dollar. ProShares also offers leveraged funds for the euro and yen; considering the increased popularity in the Australian dollar thanks to the nation’s close ties with China’s growth, CROC and GDAY are logical additions.

Of course, should you not want to tangle with something so speculative — in addition to multiplied gains and losses, CROC and GDAY are rebalanced daily, so their long-term movements likely won’t reflect the Aussie dollar too accurately — you also can get exposure to the Australian dollar through CurrencyShares Australian Dollar Trust (NYSE:FXA[14]).

Including last week’s launches, nine new exchange-traded products have come to market in July. The previous week saw new funds aimed at alpha & beta, as well as financials[15].

In all, 131 new funds have come out so far in 2012, according to XTF.com[16].

Kyle Woodley[17] is the assistant editor of InvestorPlace.com[18]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[19].

Source URL: https://investorplace.com/2012/07/new-etfs-beat-the-yield-drum-to-death/

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