New products introduced over the last week include a new permanent ETF from Global X and a report by BlackRock that shows fixed-income ETFs have hit record levels. In addition, Van Eck Global announced that its suite of municipal bond funds recently passed the $1 billion mark.
Here are the latest developments of interest to advisors:
1) Global X Funds Launches Permanent ETF to Diversify Across Asset Classes
On Wednesday, Global X Funds launched the Global X Permanent ETF (PERM), a diversified ETF investing across various asset classes and designed to perform in different economic environments: increasing growth, decreasing growth rate, increasing inflation, decreasing inflation. PERM seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Permanent Index.
PERM is an all-seasons portfolio tracking the performance of four asset class categories designed to perform differently across various economic climates. The fund has target allocations of 25% to equity stocks, 25% to short-term bonds, 20% to gold and 5% to silver, and 25% to-long term bonds. PERM does not try to beat an index, but rather maintains target allocations through passive indexing.
2) Fixed-Income ETFs Hit Record Levels Globally, BlackRock Reports
Global asset flows for exchange-traded products (ETPs), and fixed-income ETFs specifically, hit record levels during the month of January, illustrating a continuing market “revolution” globally as investors increasingly turn to fixed-income ETFs in an effort to help restore investment yield to their portfolios.
According to the BlackRock Investment Institute’s latest “ETP Landscape” report released Wednesday, the global ETP industry had its best month of January ever with $34.1 billion of net inflows, representing a 144% increase in inflows over the previous record set in January 2011 and up 116% from December 2011. Also, according to the report, fixed-income ETFs set a new global monthly record, attracting $9.0 billion in January 2012 up from the previous monthly record set of $6.7 billion set in January 2009.
iShares plans to continue to expand its fixed-income product offerings later this month when it is scheduled to launch six new fixed-income ETFs in the U.S., including the iShares Barclays U.S. Treasury Bond Fund (GOVT), the iShares Barclays CMBS Bond Fund (CMBS), the iShares Aaa – A Rated Corporate Bond Fund (QLTA), and three corporate sector bond funds (MONY, ENGN and AMPS).
3) Market Vectors Municipal Bond ETFs Top $1 Billion in AUM
Van Eck Global announced Tuesday that its family of municipal bond ETFs recently passed the $1 billion mark in combined assets under management. The six funds in this family, part of Van Eck’s Market Vectors line of ETFs, cover all points along the yield curve and credit spectrum, and have been driving assets even as the muni marketplace was faced with high-profile prognostications of doom at the start of 2011.
According to the firm, its full range of muni income-oriented ETF offerings now includes:
- Market Vectors High-Yield Municipal Index ETF (HYD), which tracks an index that focuses on the noninvestment-grade portion of the municipal bond market;
- Market Vectors Long Municipal Index ETF (MLN), which tracks an index that focuses on long-duration bonds with a nominal maturity of 17 years or more;
- Market Vectors Intermediate Municipal Index ETF (ITM), which tracks an index that focuses on medium-duration bonds with a nominal maturity of 6 to 17 years;
- Market Vectors Short Municipal Index ETF (SMB), which tracks an index that focuses on short-duration bonds with a nominal maturity of 1-6 years;
- Market Vectors Pre-Refunded Municipal Index ETF (NPRB), which: tracks an index that focuses on pre-refunded and escrowed-to-maturity municipal securities; and
- Market Vectors CEF Municipal Income ETF (XMPT): the first and only U.S.-listed ETF designed to track an index that provides exposure to a basket of municipal bond-focused closed-end funds.
Read the Feb. 5 Portfolio Products Roundup at AdvisorOne.com