Nobody Had a Better Week than Tin ETPs

ETF TIMES: ETPs tracking commodities, and tin in particular, had a strong week while the turmoil in Egypt weighed on Turkish equities

Morningstar ETF Analysts 1 February, 2011 | 7:06PM
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Popular ETF-domicile Luxembourg abandoned its subscription tax for funds registered in the country. In response, Lyxor has cut the total expense ratio (TER) on its Luxembourg-domiciled products to reflect the changes.

New Listings
db x-trackers launched a hedge-fund ETF on the London Stock Exchange. The new fund (ticker symbol: XHFE) tracks the performance of 17 hedge funds from 13 different managers. Unlike other hedge fund ETFs which attempt to mimic the statistical performance of the hedge fund universe, this ETF tracks the performance of actual hedge funds, including long-short and equity market neutral strategies. The fund has a TER of 0.90%, while the fees levied by the underlying funds are computed into the index’s calculation.

db x-trackers also launched a S&P 500 ETF on the Deutsche Börse Xetra. Like many existing ETFs, the new fund tracks the performance of the S&P 500 Total Return index, but is hedged against exchange rate fluctuations between the U.S. dollar and the euro. The fund is swap-based and charges a TER of 0.30%.

HSBC launched a Chinese equity ETF on the London Stock Exchange. The new fund (HMCH) tracks the performance of the MSCI China index using physical replication. The index is restricted to H shares, which are the shares of Chinese companies incorporated on the mainland but listed on the Hong Kong Stock Exchange. Foreign investors face restrictions in their purchase of A shares listed on the mainland exchanges. Because some of the companies' shares are relatively illiquid, the fund will use optimisation to minimise tracking error. The fund has a TER of 0.60% and it is listed in both pounds sterling and US dollars.

HSBC also launched an ETF benchmarked to BRIC equities on the London Stock Exchange. The new fund (HSPB) tracks the performance of the S&P BRIC 40 index and sports a TER of 0.60%. It is a physically replicated ETF, and all the constituents trade on stock exchanges in the UK, the US or Hong Kong. It is listed in both pounds sterling and US dollars.

iShares launched an ETF tracking Polish equities on the London Stock Exchange. The new fund (IPOL) tracks the performance of the MSCI Poland index using physical replication. It has a TER of 0.74%, and is available in both pounds sterling and US dollars.

Pimco and Source teamed up to launch two fixed income ETFs on the Deutsche Börse Xetra. For more information, read our full article on the new funds.

Best and Worst Performers for the week of January 24 - 28
The best performing ETPs for the week included a number of different exchange-traded (ETCs) commodities, but none had a better week than those linked to tin. Prices for the metal hit a record high as there are concerns about the supply from major exporter Indonesia. The country has been hit with major rainfall and floods threaten to disrupt mining operations. Greece had the best performing equity market for the week as a corporate tax cut and a potential solution to the country's debt crisis in the form of Brussels financing a bond buyback encouraged investors.

After a brief rally, natural gas prices resumed their downward slide as the latest US inventory numbers indicated that supplies are abundant. With the S&P 500 increasing for the week, the index's volatility declined, weighing on Source's S&P 500 VIX Futures ETF. Funds tracking the performance of Turkish equities were also among the worst performing ETPs for the week for the second week in a row over concerns that exports will be negatively impacted in the face of political unrest in the region.

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.

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