New products introduced over the last week include currency-hedged ETFs from iShares; a floating rate Treasury ETF from WisdomTree; an MLP high-income ETF from Direxion; a low-volatility mutual fund from BPV Capital Management; a low-volatility, high-dividend index from S&P Dow Jones Indices; and an interactive calculator from Fidelity Financial Advisor Solutions.
In addition, CAIS, Citi and Atlantic Fund Services announced a collaboration to provide a turnkey solution for hedge fund managers to launch alternative mutual funds.
Here are the latest developments of interest to advisors:
1) iShares Launches Currency-Hedged ETFs
iShares, the ETF business of BlackRock, has launched three currency-hedged ETFs designed to reduce the impact of currency fluctuations on returns when investing in foreign countries. They are the iShares Currency Hedged MSCI EAFE ETF (HEFA), iShares Currency Hedged MSCI Germany ETF (HEWG) and iShares Currency Hedged MSCI Japan ETF (HEWJ).
The new funds track indexes by MSCI that employ a market-cap-weighted methodology and provide comprehensive local country exposure with diversified sector weightings. They also invest in their unhedged parent ETFs—iShares MSCI EAFE (EFA), Germany (EWG) and Japan (EWJ)— and implementing foreign currency forward contracts, the hedged ETFs provide a way to mitigate unwanted currency risk.
2) WisdomTree Launches Floating Rate Treasury ETF
WisdomTree has announced the launch of the WisdomTree Bloomberg Floating Rate Treasury Fund (USFR). For the first time, the U.S. Treasury has begun to issue floating-rate notes (FRNs) to tap the demand of investors to reduce interest rate risk.
USFR seeks to provide exposure to those floating rate notes issued by the U.S. Treasury and has a net expense ratio of 0.15%. Its gross expense ratio of 0.20% and net expense ratio of 0.15% reflect a contractual waiver of 0.05% through USFR’s first year of operations.
3) Direxion Launches MLP High-Income ETF
Direxion has announced the Direxion Zacks MLP High Income Shares ETF (ZMLP), which seeks to generate investment results based on the Zacks MLP Index’s price and yield performance.
Zacks Index Services compiles and manages the index, which is composed of roughly 25 master limited partnerships (MLPs) listed on North American stock exchanges. The index’s holdings are selected using a quantitative, rules-based methodology developed by Zacks to eliminate MLPs with insufficient share prices, market capitalizations and liquidity. All companies in the index are equally weighted so that each holding constitutes 4% of the ETF’s portfolio, which is rebalanced on a quarterly basis.
4) BPV Capital Management Announces Low-Volatility Mutual Fund
BPV Capital Management has announced the launch of the BPV Low Volatility Fund (BPVLX), a low-fee hedged equity strategy that seeks to provide institutional investors and advisors with bondlike returns and reduced volatility as compared to the S&P 500.