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May 16, 2011 at 06:26 AM
Companies went global in new mutual funds and new ETFs, as well as reporting results from global funds and moving into the automotive market. Also, Schwab announced results from its Q1 Investor Snapshot in this week’s activity.
First Trust Advisors Drives New ETF
First Trust Advisors L.P. announced that Tuesday was the first trading day for its new ETF focused on global automobile manufacture. The first automotive ETF in the industry, the First Trust NASDAQ Global Auto Index Fund (CARZ), will seek investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ OMX Global Auto Index, which is designed to track the performance of the largest and most liquid companies making cars.
Ryan Issakainen, vice president and ETF strategist, said, “We are launching this fund as a way for investors to potentially capitalize on the trend toward increasing demand of automobiles, which has led automakers and suppliers to grow in emerging markets and consolidate operations in mature markets.” He cited Zacks Equity Research as foreseeing growth over the next ten years, with automakers in six major markets dominating the industry: China, India, Japan, Korea, Western Europe and the U.S.
He added, “J.D. Power and Associates expects auto sales in the U.S. to reach 13 million units, up 12% from 2010. However, in 2010, for the first time, emerging markets accounted for 51% of global light-vehicle sales, signaling the shift of power in the global automotive market that has been taking place during the past five years. Both China and India ended 2010 with sales of light vehicles up by more than 30%. Momentum in the emerging markets is expected to continue throughout 2011, with China as the driver for global market growth.”
BlackRock Launches India Fund
BlackRock, Inc.announced the launch of the BlackRock India Fund (BAINX) on May 9. The fund, which offers U.S.-based investors a new opportunity to invest in the world's fourth largest economy, is a joint venture with Mumbai-based DSP BlackRock Investment Managers Pvt. Ltd., one of India's leading investment management companies; it has advised the BGF India Fund since 2005 in partnership with BlackRock for offshore investors. The new fund for U.S.-based investors will join BlackRock's existing open-end mutual fund product offerings in the U.S.
"We believe India's strong growth and diversity of investment themes presents an exciting opportunity for investors over the medium to long term," said S. Naganath, president and chief investment officer of DSP BlackRock Investment Managers Pvt. Ltd.
Van Eck Adds New Regions, Lowers Fees
Van Eck Globalhas made a number of additions and changes. On Thursday, it announced the launch of its latest ETF. The Market Vectors LatAm Aggregate Bond ETF (BONO)("Bono" is Spanish for "bond") tracks an index consisting of sovereign and corporate debt securities issued by Latin American issuers and denominated in U.S. dollar, euro and local currencies of the issuers.
According to the company, the ETF "comes to market as Latin American debt markets have undergone several years of quick maturation. Limited overseas borrowing, proliferating infrastructure projects, and better transparency have all led to improved sovereign credit ratings," and these, combined with the bonds’ relatively high yields, have increased demand for both sovereign and corporate debt from the region.
Van Eck also announced on Tuesday that its Market Vectors Indonesia ETF had reached $500 million in AUM.
And on May 4, the company said it has reduced expense caps on five of its Market Vectors ETFs. The cuts, which were effective on May 1, were on Market Vectors Africa Index ETF (AFK), to 0.78% from 0.83%; Market Vectors Brazil Small-Cap ETF (BRF), to 0.62% from 0.65%; Market Vectors Junior Gold Miners ETF (GDXJ), to 0.56% from 0.59%; Market Vectors RVE Hard Assets Producers ETF (HAP), to 0.59% from 0.65%; and Market Vectors Uranium+Nuclear Energy ETF (NLR), to 0.60% from 0.62%. The company expects a resulting reduction in the funds’ net operating expenses. The reduced expense limitations are capped contractually until May 1, 2012; interest expense and certain other expenses are excluded.
