New Listings: March 7 - 11
Lyxor listed a corporate fixed income ETF on the Deutsche Börse. The Lyxor iBoxx EUR High Yield 30 ETF uses synthetic replication to track the performance of the Markit iBoxx EUR Liquid High Yield 30 index, which is composed of 30 EUR-denominated corporate bonds rated below investment grade. Bonds selected for inclusion in the index must not mature for a minimum of 15 months. The total expense ratio (TER) is 0.45%. This ETF was already listed on the London Stock Exchange (IHYG), Euronext Paris, and Borsa Italiana.
ETFS launched a global dividend ETF, ETFX Dow Jones Global Select Dividend fund (ticker symbol: GDIV), on the London Stock Exchange. This ETF uses synthetic replication to track the total return performance of the Dow Jones Global Select Dividend Index, which is composed of the equities of 100 companies from up to 25 different countries. Selection criteria for the index include minimum levels of liquidity (e.g. $3 million daily average trading volume over the previous three months) and dividend quality (e.g. non-negative dividends per share growth for the previous three years, and a five-year dividends-to-earnings ratio of at least 60% for European and American companies, and 80% for all other companies). As of February 28, the index had a dividend yield of 5.25%. The fund's TER is 0.50%.
db x-trackers listed its Global Fund Supporters ETF on the London Stock Exchange. Previously available on the Deutsche Börse, this ETF tracks the performance of the Dow Jones Global Fund 50 Index, which includes companies that support the fight against AIDS, tuberculosis, and malaria. Revenues generated by the ETF's TER of 0.50% will go into the same Global Fund once the ETF's running expenses are covered. Unique among db x-trackers line of products, this fund uses physical replication to track the performance of its benchmark index.
HSBC launched two Latin America ETFs on the London Stock Exchange. The HSBC MSCI EM Latin America ETF tracks the performance of the MSCI EM Latin America Net Total Return Index, and the HSBC MSCI Mexico Capped ETF tracks the performance of the MSCI Mexico Capped Net Total Return Index. As with all HSBC ETFs, the two funds use physical replication to track the performance of their respective index. However, the Latin America ETF will use optimisation, a technique which replicates index performance without holding all its components. Both funds trade in both GBP and USD, and charge a TER of 0.60%.
Best and Worst Performers for the week of March 7 - 11
The db x-trackers FTSE Vietnam ETF was the best performer this week as the Vietnamese authorities cracked down on black market trading of the US dollar. Domestic Vietnamese investors often hold USD when the local currency, the dong, is out-of-favour, and the crackdown has at least temporarily made investments in the local stock market more attractive. Turkish stocks also had a strong week, as rumours of local banks being acquired by foreigners heated up and investment bank HSBC upgraded the country's equity market to 'overweight'. And only one week after the Lyxor FTSE Coast Kuwait 40 ETF was the worst performer, the ETF rallied back. Finally, ETCs exposed to crude oil continued to run higher along with the price of a barrel of oil as the events in Libya unfold.
All of the worst performing ETPs of the week were commodity-based, including a number of different metal and grain ETCs. The US Department of Agriculture released a report showing global stocks of wheat, corn and soybean were higher than expected as harvests in the Southern Hemisphere were strong, leading to a decline in the price of those commodities. Meanwhile, copper prices dropped as fears that a combination of higher gas prices and slower-than-expected growth in Chinese demand could slow down global economic growth.
