Some analysts and reporters question the need for additional ETFs and the value that new ETFs bring to investors. For what it’s worth, we heard the same commentary when the universe of ETFs listed on US exchanges stood at 200, 400 and 600 and still had gaping asset coverage holes.
ETFs listed on US exchanges numbered 755 at the end of August, up eight from the end of July according to StateStreet. There are currently in the neighborhood of 500 ETFs in registration at the SEC, awaiting approvals for issuance.
A closer look at what’s been rolled out since the end of July shows that, in fact, important innovation is still very much alive and well in the ETF space.
Investors are better equipped than they were 60 days ago to make choices about how to protect against inflation risks – thanks to the launch of a short-term TIPS ETF by Pimco (STPZ). The only two ETFs that have preceded it to market each carry short, intermediate and long maturity TIPS in a single ETF having a considerably longer average duration than the new Pimco fund.
Harry Dent? Relative strength models? All rolled up in a tactically-oriented, “actively”-managed ETF? There is now (DENT), as we discussed yesterday.
US equities markets have been carved up into sector and industry ETFs by no less than a half-dozen index families-turned-ETFs. And international developed markets equities have three index family alternatives for gaining sector-based exposure. Since May, though, Emerging Global Advisors has been rolling out emerging markets sector and industry ETFs, with their latest launch made in the past month (EFN).
Investors in physical gold now have the capability to opt for an ETF which holds gold in Swiss vaults rather than in the UK via SGOL. This also represents a second ETF carrying physical gold carrying a considerably smaller market footprint than the massive $33 billion GLD.
Many regard today’s “frontier” markets as the emerging markets plays of five or ten years ago. Van Eck rolled out the first ETF (VNM) designed to provide exposure to equities domiciled in Vietnam.
ProShares recently rolled out an ETF designed to track – on a daily return basis – the un-leveraged inverse of the Barclays Capital 20+ Year US Treasury Index (TBF). In the face of the arms race to 2x and now 3x leveraged products, it’s great to see relatively simple, un-leveraged inverse tools still hitting the street. These allow investors to participate in the continuation of price trends, even when they turn negative – all within a consistent (and un-leveraged) risk management framework.
The first regional ETF to cover Nordic countries (GXF), by Global X, provides equity exposure to Sweden, Denmark, Norway and Finland.
For the vast majority of investment applications and across all major asset classes, investors are discovering the compelling advantages that ETFs bring to the table for providing access to exposure. And it’s only getting better.
