ETF News Archive

Van Eck Introduces Mortgage REIT Income ETF

Van Eck Global launched an ETF that provides exposure to publicly traded mortgage REITs this week.

The Market Vectors Mortgage REIT Income ETF (MORT) tracks an index of 25 REITs in the commerical and/or residential markets.  The index does not include savings associations or mortgage finance companies.

Van Eck points out that the mortgage market is dynamic and that, if the government continues to wind down its role in the mortgage market, more opportunities will open up for the private sector.

The exchange traded fund carries a net expense ratio of 0.40% and the index has a current dividend yield of 14%.

For more ETF investing choices, see the Investing for Income with ETFs.

Floating Rate Income ETF Starts Trading

A new fixed-income ETF that tracks an index of floating rate securities was launched this week by Van Eck Global.

The Market Vectors Investment Grade Floating Rate ETF (FLTR) tracks an index of floating rate notes or "floaters" with coupons that are linked to three-month LIBOR or other standard reference rates. The floating rate notes in the index are issued by corporations and are rated investment grade by at least one of the three ratings services.

Although most of the notes in the index are issued by financial services companies, the issuers range from investment banks (Goldman Sachs and Morgan Stanley) to insurance companies (MetLife) to commercial and consumer credit companies (American Express Credit, GE Capital).

Designed to be an income product, the exchange traded fund will payout monthly and has a current yield of about 1.01%.

Van Eck Launches Small-Cap ETFs for Russia and Germany

Two international small-cap exchange traded funds were recently launched by Van Eck Global.

The Market Vectors Russia Small-Cap ETF (RSXJ) provides exposure to Russia's developing local economy through the country's small-cap companies.  The ETF tracks the Market Vectors Russia Small-Cap Index which is comprised of 35 companies with an average market cap of $2.3 billion.  Top sector weightings include Utilities (18%), Materials (17%) and Energy (17%). The fund's expense ratio is 0.67%.

The Market Vectors Germany Small-Cap ETF (GERJ) provides exposure to a group of 95 German companies with an average market cap of $1.2 billion.  The German economy has bounced back from the last recession better than most on the strength of domestic consumption and exports to fast growing Asian countries.

Migration from Mutual Funds to ETFs Continues

Investors continue to embrace exchange traded funds while dropping mutual funds from their portfolios.

That's the finding of the latest industry study by Cambridge, Massachusets-based Cogent Research.

According to Cogent, as of October 2010, 75% of investors own mutual funds, a figure that is down from 78% a year earlier and a full nineteen percentage points below the more than nine in ten (94%) of investors who owned at least one mutual fund in October of 2006. Meanwhile, within the same 4-year period, the proportion of investors who report owning ETFs has increased 57%, from 7% to 11%.

A Cogent representative commented that “Traditional mutual fund providers are fighting tooth and nail for a shrinking piece of real estate, while established ETF providers face a different challenge; fending off a rush of new providers in a rapidly expanding marketplace.”

The study also tested investor perceptions of ETF providers.

Schwab Adds MId-Cap and REIT ETFs

Schwab has expanded its line-up of exchange traded funds with the introduction of a mid-cap ETF and REIT ETF.

The Schwab U.S. Mid-Cap ETF (SCHM) tracks close to 500 stocks in the Dow Jones U.S. Mid-Cap Total Stock Market Index.  The fund has an expense ratio of 0.13% and top holdings include Alexion Pharmaceuticals, Borg Warner, Carmax and Chipotle Mexican Grill.

The Schwab U.S. REIT ETF (SCHH) tracks 82 securities in the Dow Jones U.S. Select REIT Index.

Asian Gold ETF Starts Trading

ETF Securities has added another physical gold ETF to its line-up of precious metal exchange traded funds.

The ETFS Physical Asian Gold Shares (AGOL) is the first gold ETF to vault physical gold in Asia.  Specifically, the fund will custody all of its physical gold bars in London Bullion Market Association (LBMA) approved vaults in Singapore.

The objective of AGOL is to reflect the price performance of physical gold, less Trust expenses.  AGOL has an expense ratio of 0.39%.

Visit the ETF Directory for a complete list of Gold ETFs.

Name Change for Nuclear ETF

Van Eck has changed the name of the firm's nuclear exchange traded fund to the Market Vectors Uranium+Nuclear ETF (NLR).

The new name was selected to communicate to investors the relative weight of the uranium mining sub-sector among the seven nuclear energy sub-sectors represented in the DAXglobal® Nuclear Energy Index.

In addition to companies engaged in uranium mining, the ETF offers exposure to companies involved with uranium enrichment, uranium storage, equipment for nuclear energy generation, nuclear plant infrastructure, nuclear fuel transportation and nuclear energy generation. Uranium mining is the largest of these seven sectors, accounting for approximately 39% of NLR’s total market capitalization as of December 31, 2010.