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19 ETNs Launch in April

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With the launch of 35 new Exchange Traded Vehicles (ETVs), April was one of the busiest months in a long time for the exchange-traded field: Nineteen new Exchange Traded Notes (ETNs) were complemented by 16 new ETFs.

The thirst for commodities spilled over from the trading desks to the ETN issuers as all but one of the new ETNs (iPath Optimized Currency Carry ETN) were commodity based.

Deutsche Bank launched four commodity ETNS and four agriculture ETNs, which offer long, short, double-long and double-short exposure. UBS launched eight E-TRACS with exposure to broad commodities, industrial metals, energy, agriculture, livestock, food, gold and silver.

ETNs are debt securities backed by the credit of the issuer. As major financial institutions have become engulfed in the firestorm of mounting credit losses, investors are becoming more sensitive to taking on credit issuer risk.

The price and value of ETNs is acutely affected by the credit rating of the issuing bank or investment firm. In context with UBS’ significant write-offs, the timing of the E-TRACS launch seems especially curious.

For its part, PowerShares recently launched a series of “active” or actively managed ETFs. PowerShares Active ETFs are still closer to quantitative selection model than true pick-and choose active portfolio management.

Also new to the marketplace is the PowerShares Global Nuclear Energy Portfolio (PKN), set to compete with Van Eck’s Nuclear Energy ETF (NLR).

Alternative energy and other “green” offerings seem to be the trend these days, which Claymore and Van Eck want to capitalize on. Both firms unleashed their solar ETF: The Claymore Solar ETF (TAN) and Market Vectors Solar Energy ETF (KWT) have many similarities in addition to the same expense ratio, 0.65 percent.

Northern Trust debuted in the ETF marketplace with the launch of two new ETFs — called NETS. NETS S&P/ASX 200 Australia Index Fund (AUS) and NETS FTSE 100 United Kingdom Index Fund (LDN).

The new iShares MSCI All Country World Index Fund excluding the United States, or MSCI ACWI ex-U.S., trading as ACWX, will compete with iShares Europe, Africa & the Far East (EFA) and SPDRs MSCI ACWI ex-US ETF (CWI). So far, the performance of iShares MSCI ACWI Index (ACWI) looks similar to the iShares MSCI Kokusai Index (TOK), which measure the equity market performance of developed markets excluding Japan.

And iShares has also added three single-country ETFs that crack into the new ETF markets of Israel (EIS), Thailand (THD) and Turkey (TUR).

Reach Ron DeLegge at


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