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The ETF industry has gained immense popularity within just over 20 years. Though the pace of rollout slackened a bit year over year in 2016 as we saw close to 240 launches compared with approximately 300 seen in 2015, it was way higher than about 180 ETF initiations in 2014, 150 in 2013 and 170 rollouts in 2012 (read: Too Many ETFs Flying in the Market?).
All these have tallied to 1,958 ETFs so far. Not only this, a considerable number of ETFs are in the pipeline, pointing to growing investor interest for exchange-traded products in this market. The credit goes mainly to a wide range of innovative and fresh-themed products in the space, which hold investors’ attention despite the peaks and troughs of the market (read: 6 ETF Ideas Most Favored by Issuers in 2016).
Below are six ETFs launched in 2016 that amassed a decent asset base.
WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM - Free Report) – $300.0 million
It forayed into the ETF universe in January 2016 and saw huge success. It focuses on the performance of dividend-paying companies in the industrialized world, barring Canada & the U.S., and rules out the effect of foreign currency translations relative to the USD from the index performance with a hedge ratio ranging from 0–100% on a monthly basis, as per the issuer.
With the currency market remaining extremely volatile in 2016 following moderation in the greenback, strength in yen and plunge in pound on Brexit in the first half and a recovery in the U.S. dollar in the second half, a dynamic currency-hedging technique was sure to win (read: Europe After Brexit: 5 Keys to Investing with ETFs).
As of September 30, 2016, the fund’s aggregate hedge ratio is 52.21%, with pound being the most hedged by 82.61%. The fund charges 35 bps in fees and has solid exposure in the U.K., Japan and France.
SPDR SSGA Gender Diversity Index ETF (SHE - Free Report) – $272.5 million
The fund has generated about $272.5 million of assets since it debuted in March. It tracks the SSGA Gender Diversity Index and looks to focus on large-cap companies with female employees in senior leadership positions (read: Women Leaders ETFs Head to Head: WIL vs. SHE).
First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC - Free Report) – $255.6 million
FVC is the dynamic version of the popular First Trust Focus 5 ETF (FV - Free Report) that invests in the top five ranked First Trust sector and industry ETFs as identified by their relative strength rankings.
FVC offers a lower risk quotient than FV’s strategy as the former uses cash as represented by 1–3 month U.S. Treasury bills. In a volatile market scenario, focus on lower-risk products has greater chances of outperforming. The fund entered the ETF world in March and charges 79 bps in fees.
Franklin LibertyQ Emerging Markets ETF – $248.3 million
The 203-security fund hit the market in June having invested in emerging market with favorable exposure to multiple investment style factors. The net expense ratio of the fund 55 bps in fees. South Korea (15.98%) and Taiwan (14.5%) get a double-digit weight in the fund.
Principal U.S. Small Cap Index ETF (PSC - Free Report) – $245.4 million
The 441-security fund entered the market in September. The underlying index of the fund – the Nasdaq U.S. Small Cap Select Leaders Index – looks to track the small-cap U.S. stocks (both growth and value stock) with the “potential for high degrees of sustainable shareholder yield, pricing power and strong momentum, while adjusting for liquidity and quality as determined by a quantitative model.” The fund charges 38 bps in fees.
IQ Enhanced Core Plus Bond U.S. ETF – $210.8 million
The underlying index of the fund looks to track the U.S. dollar-denominated fixed income universe by focusing on a momentum investing strategy (read: Top Performing Bond ETFs of 1H).
The fund takes a fund-of funds approach with iShares Iboxx $ Investment Grade Corporate Bond ETF (16.68%), SPDR Bloomberg Barclays High Yield Bond ETF (14.00%) and Vanguard Intermediate-Term Corporate Bond ETF (12.9%) taking the top three spots. The fund charges 35 bps in fees and has roped in about $210.8 million after making a debut in May.
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6 Successful ETF Launches of 2016
The ETF industry has gained immense popularity within just over 20 years. Though the pace of rollout slackened a bit year over year in 2016 as we saw close to 240 launches compared with approximately 300 seen in 2015, it was way higher than about 180 ETF initiations in 2014, 150 in 2013 and 170 rollouts in 2012 (read: Too Many ETFs Flying in the Market?).
All these have tallied to 1,958 ETFs so far. Not only this, a considerable number of ETFs are in the pipeline, pointing to growing investor interest for exchange-traded products in this market.
The credit goes mainly to a wide range of innovative and fresh-themed products in the space, which hold investors’ attention despite the peaks and troughs of the market (read: 6 ETF Ideas Most Favored by Issuers in 2016).
Below are six ETFs launched in 2016 that amassed a decent asset base.
WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM - Free Report) – $300.0 million
It forayed into the ETF universe in January 2016 and saw huge success. It focuses on the performance of dividend-paying companies in the industrialized world, barring Canada & the U.S., and rules out the effect of foreign currency translations relative to the USD from the index performance with a hedge ratio ranging from 0–100% on a monthly basis, as per the issuer.
With the currency market remaining extremely volatile in 2016 following moderation in the greenback, strength in yen and plunge in pound on Brexit in the first half and a recovery in the U.S. dollar in the second half, a dynamic currency-hedging technique was sure to win (read: Europe After Brexit: 5 Keys to Investing with ETFs).
As of September 30, 2016, the fund’s aggregate hedge ratio is 52.21%, with pound being the most hedged by 82.61%. The fund charges 35 bps in fees and has solid exposure in the U.K., Japan and France.
SPDR SSGA Gender Diversity Index ETF (SHE - Free Report) – $272.5 million
The fund has generated about $272.5 million of assets since it debuted in March. It tracks the SSGA Gender Diversity Index and looks to focus on large-cap companies with female employees in senior leadership positions (read: Women Leaders ETFs Head to Head: WIL vs. SHE).
First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC - Free Report) – $255.6 million
FVC is the dynamic version of the popular First Trust Focus 5 ETF (FV - Free Report) that invests in the top five ranked First Trust sector and industry ETFs as identified by their relative strength rankings.
FVC offers a lower risk quotient than FV’s strategy as the former uses cash as represented by 1–3 month U.S. Treasury bills. In a volatile market scenario, focus on lower-risk products has greater chances of outperforming. The fund entered the ETF world in March and charges 79 bps in fees.
Franklin LibertyQ Emerging Markets ETF – $248.3 million
The 203-security fund hit the market in June having invested in emerging market with favorable exposure to multiple investment style factors. The net expense ratio of the fund 55 bps in fees. South Korea (15.98%) and Taiwan (14.5%) get a double-digit weight in the fund.
Principal U.S. Small Cap Index ETF (PSC - Free Report) – $245.4 million
The 441-security fund entered the market in September. The underlying index of the fund – the Nasdaq U.S. Small Cap Select Leaders Index – looks to track the small-cap U.S. stocks (both growth and value stock) with the “potential for high degrees of sustainable shareholder yield, pricing power and strong momentum, while adjusting for liquidity and quality as determined by a quantitative model.” The fund charges 38 bps in fees.
IQ Enhanced Core Plus Bond U.S. ETF – $210.8 million
The underlying index of the fund looks to track the U.S. dollar-denominated fixed income universe by focusing on a momentum investing strategy (read: Top Performing Bond ETFs of 1H).
The fund takes a fund-of funds approach with iShares Iboxx $ Investment Grade Corporate Bond ETF (16.68%), SPDR Bloomberg Barclays High Yield Bond ETF (14.00%) and Vanguard Intermediate-Term Corporate Bond ETF (12.9%) taking the top three spots. The fund charges 35 bps in fees and has roped in about $210.8 million after making a debut in May.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>