Top Portfolio Products: iShares Rolls Out Commodity Trust ETF

Emerging Global Advisors launches EGShares EM Dividend High Income ETF; Edward Jones to introduce fixed-income mutual fund

New products introduced over the last week include the iShares Dow Jones-UBS Roll Select Commodity Index Trust.

In addition, Emerging Global Advisors said it has launched the EGShares EM Dividend High Income ETF, and Edward Jones is in the process of introducing its own fixed-income mutual fund to clients using its fee-based platform.

Here are the latest developments of interest to advisors:

1) iShares Launches iShares Dow Jones-UBS Roll Select Commodity Index Trust

BlackRock, Inc. (BLK) announced recently that its iShares ETFs business has launched the iShares Dow Jones-UBS Roll Select Commodity Index Trust (CMDT). It is the first ETF based on the Dow Jones-UBS Roll Select Commodity Index, which currently tracks 22 commodities futures contracts, including agriculture, energy and metals, and is designed to minimize the costs of closing expiring futures contracts and replacing them with new ones.

CMDT accesses commodities exposure through commodity index futures contracts. When the contracts are close to expiring, the fund replaces the contracts with new ones in a process known as “rolling.” If the fund is rolling contracts for costlier later-dated contracts, then the commodity market is in “contango,” which may detract from performance. If the later-dated contracts are less expensive than the contracts held by the fund, then the commodity market is in “backwardation,” which may add to performance.

The index on which the ETF is based, a version of the Dow Jones-UBS Commodity Index, aims to mitigate the effects of contango on performance. For each commodity, the index rolls into the futures contract that shows the most backwardation or least contango, selecting from those contracts with nine months or fewer until expiration.

2) Emerging Global Advisors Launches EGShares EM Dividend High Income ETF

Emerging Global Advisors (EGA) announced Thursday that it has launched the EGShares EM Dividend High Income ETF (EMHD), an ETF designed for income-oriented investors. EMHD tracks the FTSE Equal Weighted Emerging All Cap ex-Taiwan Diversified Dividend Yield 50 Index, which has a dividend yield of 8.8% (as of 7/31/2013) and screens for emerging market companies that have consistently generated high income for their shareholders.

EGA and FTSE collaborated to design an index that seeks to provide a higher dividend payout relative to other widely used EM dividend indices. The equally weighted index measures the stock performance of the 50 highest-yielding, liquid EM equity securities in its universe, excluding the least capitalized dividend-paying companies. As a result, the index is designed to deliver a broad basket of securities across EM countries that are screened for high dividend yield and quality.

3) Edward Jones ‘Not Altering Direction of Ship’ With Proprietary Fund

Edward Jones said Wednesday that it was introducing its own fixed-income mutual fund to clients using its fee-based platform, a move that the St. Louis-based broker-dealer says represents a course correction rather than a radical shift in corporate strategy.

“We are not altering the direction of the ship and are putting the needs of our clients first,” said Steve Seifert, principal with the firm’s investment-advisory operations, in an interview with ThinkAdvisor. “As we continue to grow and look for the best ways to perform for our clients, this is an important step forward for Edward Jones.”

Read the full story at ThinkAdvisor.

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Be sure to read the Aug. 10 Portfolio Products Roundup.

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