March 18, 2012

Top Portfolio Products: New ETFs From State Street, Russell

Interbank FX launches new social trading platform; Smartleaf adds model vendor portal

New products introduced over the last week include a new SPDR ETF from State Street Global Advisors and new ETFs from Russell Investments.

In addition, Interbank FX has launched a new social trading platform, and Smartleaf added a model vendor portal to its model distribution service.

Here are the latest developments of interest to advisors:

1) State Street Global Advisors Launches Short Term High Yield Bond SPDR ETF

State Street Global Advisors, the asset management business of State Street Corporation, announced Thursday that trading began on the SPDR Barclays Capital Short Term High Yield Bond ETF (SJNK). The new ETF offers investors access to high-yield corporate bonds with short durations, and has an annual expense ratio is 0.40%.

SJNK seeks to track the performance of the Barclays Capital 0-5 Cash Pay Constrained High Yield Index, which includes publicly issued U.S. dollar-denominated, non-investment-grade, fixed-rate, taxable corporate bonds that have a remaining maturity of less than 5 years, are rated high yield (Ba1/BB+/BB+ or below) using the middle rating of Moody’s Investors Service Inc., Fitch, Inc., or Standard & Poor’s Inc., and have $350 million or more of issuance. As of March 5, 2012, there were approximately 351 securities in the Index with an average modified adjusted duration of approximately 2.06 years.

2) New Russell ETFs Offer High Dividend Yield Exposure

Global asset manager Russell Investments on Thursday launched two high dividend yield ETFs. The Russell High Dividend Yield ETF (HDIV) and Russell Small Cap High Dividend Yield ETF (DIVS) seek to track the market capitalization-weighted Russell U.S. Large Cap High Dividend Yield and Russell U.S. Small Cap High Dividend Yield Indexes, respectively.

Each is composed of dividend-paying companies with characteristics such as ability to pay a higher dividend yield, exhibit sustained dividend growth and deliver earnings stability. The characteristics of each company are then evaluated by measures of financial strength including positive cash flow, return on equity and analyst forecasts for earnings growth. Once the universe is screened for financially strong securities, the constituents are selected to help maximize dividend yield.

3) Interbank FX Launches Social Trading Platform For Customers

Interbank FX, which was recently acquired by, and is a division of, TradeStation Forex Inc., announced Thursday that it has reintroduced IBFXConnect. IBFXConnect allows customers to trade FX alongside traders from around the globe. TradeStation is a wholly owned subsidiary of Monex Group, Inc.

Through IBFXConnect, everyday traders have the opportunity to see what others are doing in a “social trading network of forex traders from all over the world,” according to Drew Izzo, vice president of marketing for IBFX. They can determine if they would like to follow their trades and commentary, or even copy their trades directly. IBFXConnect enables two-way communication between a customer’s trading account and their IBFXConnect profile. From there, each customer has complete control of their privacy settings while being able to manage and copy trades from other members. No fee is required.

4) Smartleaf Adds Model Vendor Portal

Smartleaf announced Thursday the addition of an online portal for model vendors that is part of its model distribution service (MDS) and will streamline model updating by giving model vendors the ability to log in to a secure site to enter and maintain their models. Model updates will be checked for integrity and, when approved, will be automatically transmitted to subscribing firms who use the models to guide the customized management of individual wealth accounts.

To participate in the MDS, model vendors sign a contract with Smartleaf, not directly with clients, lowering the number of contracts the model vendor has to manage. This also allows model vendors to specify the price of their models, the terms and conditions of use, and which Smartleaf clients are allowed to purchase their models. Smartleaf handles invoicing clients on behalf of model vendors participating in the MDS.

Read the March 9 Portfolio Products Roundup at AdvisorOne.com

 

 

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