4 New ETFs Cover Popular Ground

by Kyle Woodley | August 20, 2012 12:13 pm

Two fund companies helped get August out of the launch doldrums for new exchange-traded funds by debuting a combined four ETFs this past week. EGShares brought emerging markets into the spotlight, while First Trust continued the ongoing search for new ways to hunt yield.

The EGShares Emerging Markets Domestic Demand ETF (NYSE:EMDD[1]) offers an out-of-the-usual way to invest in emerging markets. While many EM funds tend to have heavy biases in sectors like energy and materials[2], EMDD will focus on consumer goods, consumer services, health care, telecommunications and utilities stocks.

EGShares’ country exposure will include 11 nations, including the BRICs countries, South Africa and Mexico. Some of EMDD’s biggest holdings include India’s ITC Limited, which deals in everything from cigarettes to IT services; Corona maker Grupo Modelo (PINK:GPMCF[3]); beverage producer/distributor FEMSA (NYSE:FMX[4]); Mexican telecom America Movil (NYSE:AMX[5]) and South Africa-based telecom MTN Limited (PINK:MTNOY[6]).

Meanwhile, the EGShares Beyond Brics ETF (NYSE:BBRC[7]) will give investors emerging-market exposure outside of the BRICs (naturally), with the heaviest weightings going to South Africa, Mexico, Malaysia, Thailand and Indonesia. The fund also includes companies from Chile, Colombia, the Czech Republic, Egypt, Hungary, Morocco, Peru, the Philippines, Poland and Turkey.

BBRC is heavily weighted in financials (34.2%), with double-digit weightings in telecom (18.7%) and oil and gas (11.1%), and the rest going to consumer staples, consumer discretionary, industrials and utilities. Similar to EMDD, Grupo Modelo, American Movil, MTN and FEMSA all have significant weightings, with other top companies including South Africa energy and chemicals firm Sasol (NYSE:SSL[8]), Indian auto company Astra International and Colombian energy company Ecopetrol (NYSE:EC[9]).

BBRC and EMDD both pointedly exclude South Korea and Taiwan, which are heavily weighted in ETFs like the iShares MSCI Emerging Markets Index Fund (NYSE:EEM[10]), and both charge 0.85% in expenses.

First Trust debuted a pair of funds for dividend-hungry investors, the First Trust Multi-Asset Diversified Income Index Fund (NASDAQ:MDIV[11]) and the First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV[12]).

MDIV takes a multi-pronged attack, with holdings strictly relegated to 25% in stocks/ADRs, 20% in real estate investment trusts, 20% in preferred stocks, 20% in master limited partnerships and 15% in an ETF — currently the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE:HYG[13]).

Other current top holdings include American Capital Agency Corp. (NASDAQ:AGNC[14]), Invesco (NYSE:IVR[15]) and Two Harbors Investment Corp. (NYSE:TWO[16]). MDIV charges 0.6% in expense.

Meanwhile, TDIV — which hopes to bank on the trend of tech companies increasingly maturing and improving their payouts — has 59 holdings split at 80% in techs and 20% in telecoms, based on a modified market-cap weighting system.

Top holdings include Qualcomm (NASDAQ:QCOM[17]) and Microsoft (NASDAQ:MSFT[18]), as well as recent dividend-hiking champion[19] Cisco (NASDAQ:CSCO[20]). TDIV charges 0.5% in expenses.

The previous week saw just one new ETF come to market[21]. In all, 139 new funds have come out so far in 2012, according to XTF.com[22].

Kyle Woodley[23] is the assistant editor of InvestorPlace.com[24]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[25].

  1. EMDD: http://studio-5.financialcontent.com/investplace/quote?Symbol=EMDD
  2. energy and materials: https://investorplace.com/2012/05/frontier-markets-for-the-fearful-vnm-ark-mes/
  3. GPMCF: http://studio-5.financialcontent.com/investplace/quote?Symbol=GPMCF
  4. FMX: http://studio-5.financialcontent.com/investplace/quote?Symbol=FMX
  5. AMX: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMX
  6. MTNOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=MTNOY
  7. BBRC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBRC
  8. SSL: http://studio-5.financialcontent.com/investplace/quote?Symbol=SSL
  9. EC: http://studio-5.financialcontent.com/investplace/quote?Symbol=EC
  10. EEM: http://studio-5.financialcontent.com/investplace/quote?Symbol=EEM
  11. MDIV: http://studio-5.financialcontent.com/investplace/quote?Symbol=MDIV
  12. TDIV: http://studio-5.financialcontent.com/investplace/quote?Symbol=TDIV
  13. HYG: http://studio-5.financialcontent.com/investplace/quote?Symbol=HYG
  14. AGNC: http://studio-5.financialcontent.com/investplace/quote?Symbol=AGNC
  15. IVR: http://studio-5.financialcontent.com/investplace/quote?Symbol=IVR
  16. TWO: http://studio-5.financialcontent.com/investplace/quote?Symbol=TWO
  17. QCOM: http://studio-5.financialcontent.com/investplace/quote?Symbol=QCOM
  18. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  19. recent dividend-hiking champion: https://investorplace.com/2012/08/7-companies-increasing-dividends-aug-13-17-csco-anf/
  20. CSCO: http://studio-5.financialcontent.com/investplace/quote?Symbol=CSCO
  21. saw just one new ETF come to market: https://investorplace.com/2012/08/new-etf-hopes-to-simplify-hedges/
  22. XTF.com: http://www.xtf.com/
  23. Kyle Woodley: https://investorplace.com/author/kyle-woodley/
  24. InvestorPlace.com: https://investorplace.com/
  25. @KyleWoodley: https://twitter.com/#%21/kylewoodley

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