The following is an excerpt from Brendan Conway | September 21, 2012 | Barrons.com |
While bond funds are in many ways the big story of 2012, there have been a number of successful new equity ETFs. A handful of strategy funds have proven an investor lure. The search for yield that has pushed money into bond funds is another important theme.
It’s also worth noting that most of these big asset gatherers don’t have rock-bottom management fees. Investors have been willing to pay a premium when they value a specialized new strategy.
Here they are, in order of assets gathered, the top new equity-based ETFs of 2012. Caveat: No time-weighting here to account for a January launch’s head start versus one from August. Figures are from XTF.com.
iShares MSCI Global Select Metals & Mining Producers Fund (PICK), $224 million, launched in February: This global fund holds the stocks of nearly 300 miners of copper, iron ore and other non-precious metals. It features a 19% BHP Billiton (BHP) weighting in two share classes followed by 7% for Rio Tinto (RIO) and smaller doses of companies ranging from Vale (VALE) to Nucor (NUE). Charging 0.39%, this fund has managed to gather assets in a field that already features the SPDR S&P Metals & Mining ETF (XME), a U.S.-only ETF with a slightly lower fee, and the iShares S&P Global Materials (MXI), a costlier fund with exposure to the chemical and precious-metals fields that nevertheless has lots of overlap with PICK.
Fisher Enhanced Big Cap Growth ETN (FBG), $116 million, June: This complex exchange-traded note is a twice-leveraged bet on the Russell 1000 Growth Index Total Return. In one important respect, it’s actually less complex than other leveraged products: There is no regular leverage reset, meaning an investor who buys on day one and holds for a long period will actually get twice the index’s return over the same period, as Morningstar’s Patricia Oey explains. But here’s where it gets more complicated: the ETN resets back to twice leveraged if the index falls 20% below the level of its inception.
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