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ETF Times: December 6–10

Insurers’ trackers gained on upbeat sector outlook, while ETFs tracking the Turkish equity market were among the worst performers last week

Morningstar ETF Analysts 14 December, 2010 | 6:10PM
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ETF News
db x-trackers announced that it will provide investors with daily disclosure on the swap and collateral exposures for its ETFs online. It has joined Credit Suisse and iShares in increasing the level of transparency of its product lineup. Lyxor has also stated that it plans to offer similar transparency in the not-too-distant future.

New Listings
ETF Securities launched three physically-backed industrial metal ETPs on the London Stock Exchange for copper (PHCU), tin (PHSN) and nickel (PHNI).The products will all charge a management fee of 0.69% annually, plus insurance costs of 0.12%, as well as storage costs ranging from 36 cents per tonne per day for copper to 45 cents per tonne per day for nickel. The firm also plans to launch funds backed by aluminium, lead, and zinc in 2011. JPMorgan Chase and BlackRock have also announced plans for physically-backed industrial metal ETPs.

Source launched three new emerging market equity ETFs on the London Stock Exchange. The three new funds track the performance of the MSCI total return indices for the Brazilian (MSBX), Chinese (MXCS) and Indian (MSIS) equity markets. The management fee for the Brazil and China products is 0.65% annually, while the Indian ETF's management fee is higher, at 0.85% annually.

Amundi also launched new emerging market ETFs this week, this time on Euronext Paris. One fund tracks the performance of the MSCI Emerging Markets index, which consists of equities from 20 different countries. The second is a fixed income ETF which tracks the Markit iBoxx US Liquid Emerging Markets Sovereigns Index, which consists of sovereign bonds with a minimum credit rating of CCC. The equity ETF has a total expense ratio (TER) of 0.45%, while the fixed income ETF charges 0.30% annually. Emerging markets have been one of the most popular categories amongst investors in 2010, based on net cash inflows. Amundi's product equity product is looking to capitalise on this trend in part by charging a lower TER than most similar products.

db x-trackers listed an ETF which tracks the performance of the MSCI Indonesia total return index on the Deutsche Börse. The fund was originally listed on the London Stock Exchange. The annual management fee for the product is 0.65%.

HSBC launched two ETFs on the London Stock Exchange. One tracks the MSCI Turkey total return index (HTRY), available in either pounds sterling or US dollar-denominated versions. It has a TER of 0.65%. The second tracks the performance of the MSCI World Index (HMWO) and is also available in both sterling and US dollar-denominated versions. This fund levies a TER of 0.35%. The ETF uses sampling to track the performance of this index. This allows HSBC to keep the TERs for these products lower than those charged by the average international equity ETF.

ETF Exchange (ETFX) launched a Dutch mid-cap ETF on the Euronext Amsterdam. The swap-based fund tracks the performance of the AMX index, which consists of 25 companies.

ComStage listed two ETFs on the Deutsche Börse. The two funds were previously launched on the London Stock Exchange. The pair of swap-based ETFs track the performance of the PSI 20 index, a blue-chip index of the 20 largest and most liquid companies listed on Lisbon's Euronext Exchange. The un-leveraged long version of the ETF has a TER of 0.50%, while the leveraged long version of the fund charges 0.60% annually.

Best and Worst Performers for the Week of December 6-10
There were a number of ETFs tracking the equities of the European insurance-sector among the top performers for the week. This came as a large brokerage house recommended Prudential (PRU), and S&P lifted its outlook for the US insurance sector to 'stable' from 'negative'. Cotton also had a strong week, as US inventories were drawn down and demand remained particularly strong in China, Turkey and Pakistan.

The ongoing market rally this week weighed on volatility tracking ETNs, both those based on volatility futures linked to the S&P 500 and the EURO STOXX 50. The Turkish equity market suffered from a combination of declining oil prices and fears of a Chinese interest rate hike which could slow down global GDP growth. The country's banks were among the worst hit, as investors feared spill-over effects from the Eurozone crisis.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Morningstar ETF Analysts  research hundreds of ETFs available to European investors. The Morningstar Rating for ETFs is based on a risk-adjusted performance measure.