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Top Portfolio Products: SSGA, Fidelity & Direxion Launch New ETFs

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New products and changes introduced over the last week include a buyback ETF launched by SSGA, which also lowered fees on 41 SPDR ETFs; a real estate ETF launched by Fidelity; and Direxion launched four lightly leveraged ETFs.

Also, ICAP plc announced the launch of an index; Vertical launched an MLP and energy infrastructure fund; and NASDAQ launched an experimental fee program.

Here are the latest developments of interest to advisors:

1) SSGA Launches Buyback ETF, Lowers Fees on 41 SPDR ETFs

State Street Global Advisors has announced the launch of the SPDR S&P 500 Buyback ETF (SPYB), which to track the performance of the S&P 500 Buyback Index. It also announced that it has lowered the management fees on 41 SPDR ETFs.

The index provides exposure to the 100 constituent companies in the S&P 500 with the highest buyback ratio in the last 12 months. The buyback ratio is defined as the ratio of the total cash put towards buybacks in the trailing year and the market capitalization of the company as of a reference date.

The ETFs on which management fees have been lowered include those investing in a wide range of international and domestic asset classes.

2) Fidelity Adds Real Estate ETF

Fidelity Investments has announced the launch of the Fidelity MSCI Real Estate Index ETF (FREL).

FREL is a passively-managed, market-cap-weighted real estate ETF with a  total expense ratio of 0.12% and is available to individual investors and financial advisors. BlackRock is the subadvisor for this and Fidelity’s other passive sector ETFs.

3) Direxion Introduces Four Lightly Leveraged ETFs

Direxion Investments has announced the introduction of four 1.25x ETFs, the Direxion Daily S&P 500 Bull 1.25x Shares (LLSP), Direxion Daily Small Cap Bull 1.25x Shares (LLSC), Direxion Daily FTSE Developed Markets Bull 1.25x Shares (LLDM) and the Direxion Daily FTSE Emerging Markets Bull 1.25x Shares (LLEM).

The ETFs seek to achieve 125% of the daily performance of their respective benchmarks, and offer a net expense ratio of 0.50%.

4) Vertical Launches MLP and Energy Infrastructure Fund

Vertical Capital Markets Group has announced the launch of the Vertical Capital MLP & Energy Infrastructure Fund (VMLPX, VMLIX), an open-end mutual fund consisting of midstream master limited partnerships (MLPs), and energy and infrastructure securities. The fund will be subadvised by MAI Capital Management, LLC of Cleveland, Ohio.

The fund seeks long-term capital appreciation and current income through a portfolio of investments in energy infrastructure and MLPs. It is intended to have low correlation with stocks or bonds. The fund, which is structured as a regulated investment company (RIC), has for its benchmark the Alerian MLP Index.

5) ICAP plc Launches New Index

ICAP plc has announced that ICAP Information Services (IIS), the information division of ICAP, has launched the ICAP Bond Correlated Call (BCC) US Treasury Index, which represents a strategy that aims to outperform the U.S. Treasury market in a rising or stable interest rate environment.

A fixed income strategy index, it represents the enhanced income received on physical bond holdings when a product on the index is launched. The index is based on the ICAP U.S. Treasury 5–10 Year Maturity Index, which uses trade-backed data from ICAP’s electronic fixed income platform, BrokerTec. A buy-write option strategy, the ICAP BCC Index measures the performance of holding U.S. Treasury bonds and systematically writing call options on 10-year U.S. Treasury note futures contracts that are related to the underlying bonds.

6) NASDAQ Launches Experimental Fee Program

NASDAQ has launched an experimental pricing program that offers lower access fees for 14 stocks representing both small and large capitalization companies traded on U.S. equity listings venues. The program reduces the access fee to five cents per 100 shares from 30 cents per 100 shares in 14 stocks and reduces the rebates for liquidity provision on the NASDAQ stock market.

The experiment is intended to generate data about the impact of the level of access fees on areas that matter most to investors and public companies, such as the level of off-exchange trading, price discovery, trading costs, displayed liquidity and execution quality. The duration of the program will be no less than four months. Periodically, NASDAQ’s economic and statistical research group will publicly post the results of the program. Statistics to be analyzed and discussed are changes in market share, displayed liquidity, effective spread and volatility, among other metrics.

Read the Jan.31 Portfolio Products Roundup at ThinkAdvisor.


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