A "flurry of new ETF debuts" are slated today, the ETF Professor of Benzinga reports. According to the online pub, First Trust [profiles] and Van Eck [profile] both plan to launch new exchange-traded funds on the NYSE.
"The pace of new product innovations from ETF issuers has been impressive to start 2012 and if Wednesday February 15 is any indication, that pace isn't slowing anytime soon," the ETF Professor writes.
New York City-based Van Eck's latest offering is the Market Vectors Unconventional Oil & Gas ETF (FRAK), with an expense ratio of 54 basis points. It is the 45th ETF in the Market Vectors family, which boasted $23.7 billion of Van Eck's $33.1 billion in assets under management as of December 31.
Wheaton, Illinois-based First Trust plans to roll out six of its seven new country-specific ETFs, all for 80 basis points: the Australia AlphaDEX Fund (FAUS); the Germany AlphaDEX Fund (FGM) the Switzerland AlphaDEX Fund (FSZ); the Taiwan AlphaDEX Fund (FTW); and the United Kingdom AlphaDEX Fund (FKU). First Trust also rolled out a sixth AlphaDEX country-specific ETF today, for Canada (FCAN), not noted by Benzinga.
Company Press Release
MARKET VECTORS ETFs ADDS TO ENERGY OFFERINGS; LAUNCHES FIRST UNCONVENTIONAL OIL & GAS ETF
Market Vectors Unconventional Oil & Gas ETF (FRAK) seeks to tap vast potential of fast-growing energy sub-sector
NEW YORK, (February 15, 2012) – Market Vectors ETFs announced today the launch of Market Vectors Unconventional Oil & Gas ETF (NYSE Arca: FRAK), the first U.S.-listed exchange-traded fund (ETF) designed to provide investors with pure play exposure to this fast-growing segment of the energy sector, which can include efforts in coal bed methane, coal seam gas, shale oil, shale gas, tight natural gas, tight oil and tight sands.
FRAK comes to the market as rising global consumption and the quest for energy independence is driving many nations to seek additional supply sources for oil and natural gas. Unconventional technologies—which include hydraulic fracturing, lateral or deep sea drilling, high pressure gas injection, and advanced 3D imaging—may have potential to transform the global energy landscape by dramatically increasing supply and altering import needs. During the past several years, new extraction techniques applied to traditional resources have led to significant, “game changing” increases in North America’s natural gas supply capacity. More recently, these same techniques have been utilized by oil companies striving to produce similar results. Companies located outside North America, in countries such as China, Australia and Argentina, have also begun exploring the potential of unconventional energy. Technological advancements and cost efficiencies have attracted interest from major global energy companies that are eager to participate, as evidenced by rapidly increasing M&A activity.
“We’re pleased to add FRAK to our family of hard assets ETFs,” said Allison Lovett, Vice President of Marketing at Van Eck Global. “As momentum continues to build in this innovative sub-sector of the energy world, companies in this space are poised to lead the way in the discovery and extraction of energy from new and existing sources.”
FRAK seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of Market Vectors Unconventional Oil & Gas Index (ticker: MVFRAKTR), a rules-based index intended to track the overall performance of companies involved in the exploration, development, extraction, production, and/or refining of unconventional oil and natural gas. The index includes companies that derive the majority of their revenues from unconventional oil and gas (or have properties with the potential to do so), have a market cap in excess of $150 million, a three-month average daily trading volume of at least $1 million, and minimum trading volume of 250,000 shares each month over the preceding six months. As of January 31, 2012, the index had 43 constituents.
Market Vectors notes that investing in unconventional oil and gas companies is not without risks, including the inherent volatility of energy prices, exploration and production spending, operating hazards, limited production history, a still evolving regulatory environment, and more.
FRAK joins a Market Vectors family of ETFs that already included such energy-focused funds as Market Vectors Coal ETF (NYSE Arca: KOL), Market Vectors Solar Energy ETF (NYSE Arca: KWT), Market Vectors Global Alternative Energy ETF (NYSE Arca: GEX), and Market Vectors Oil Services ETF (NYSE Arca: OIH).
FRAK, Van Eck’s 45th Market Vectors ETF, has a gross expense ratio of 0.62 percent and a net expense ratio of 0.54 percent, which is capped until at least May 1, 2013.
About Market Vectors ETFs
Market Vectors exchange-traded products have been offered since 2006 and span many asset classes, including equities, fixed income (municipal and international bonds) and currency markets. The Market Vectors family currently totals $23.7 billion in assets under management, making it the fifth largest ETP family in the U.S. and eighth largest worldwide as of December 31, 2011.
Market Vectors ETFs are distributed by Van Eck Global. Founded in 1955, Van Eck Global was among the first U.S. money managers helping investors achieve greater diversification through global investing. Today, the firm continues this tradition by offering innovative, actively managed investment choices in hard assets, emerging markets, precious metals including gold, and other alternative asset classes. Van Eck Global has offices around the world and manages approximately $33.1 billion in investor assets as of December 31, 2011.
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Investments in the unconventional oil and gas sector are exposed to certain risks which include, among others, volatility of energy prices, exploration and production spending, operating hazards, limited production history, royalty interests, liens and other burdens, third party pipeline availability and capacity, and an evolving regulatory environment. Additionally, the Fund is subject to changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations and other risks inherent to international investing. Investors should be willing to accept a high degree of volatility and the potential of significant loss. The Fund may loan its securities, which may subject it to additional credit and counterparty risk. See the Fund’s prospectus and summary prospectus for more complete information regarding investment risks.
Market Vectors Unconventional Oil & Gas Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Structured Solutions AG to maintain and calculate the Index. Structured Solutions AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Market Vectors Index Solutions GmbH, Structured Solutions AG has no obligation to point out errors in the Index to third parties. Market Vectors Unconventional Oil & Gas ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by Market Vectors Index Solutions GmbH and Market Vectors Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund. Market Vectors Unconventional Oil & Gas Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH, which has contracted with Structured Solutions AG to maintain and calculate the Index. Structured Solutions AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Market Vectors Index Solutions GmbH, Structured Solutions AG has no obligation to point out errors in the Index to third parties.
The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 888.MKT.VCTR or visit marketvectorsetfs.com. Please read the prospectus and summary prospectus carefully before investing.
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Van Eck Securities Corporation, Distributor, 335 Madison Avenue, New York, NY 10017
Company Press Release
First Trust Adds New Broad Market and Country Funds to Its Lineup of AlphaDEX® Index ETFs
First Trust Advisors L.P. ("First Trust"), a leading provider of investment products and services that help financial advisors meet the financial needs and objectives of their clients, today announced the addition of nine new international-focused funds to the AlphaDEX family of exchange-traded funds ("ETFs"). These additions are comprised of two broad market and seven country-specific funds listed below. The country-specific funds are launching today, while the other two will launch tomorrow.
The AlphaDEX ETFs are designed to track the performance of a group of custom "enhanced" indexes which employ a proprietary, rules-based, fundamental stock selection methodology. The AlphaDEX family of funds consists of a diverse range of sector, style, multi-cap and international funds.
"We believe this is the optimal time to expand the AlphaDEX family because of the strong opportunities for alpha that exist within developed and emerging markets, as well as specific countries whose economies are showing long-term growth potential," said Dan Waldron, Senior Vice President and ETF Strategist for First Trust. "We are committed to providing investors with opportunities to capitalize on companies outside the U.S. through ETFs using our AlphaDEX methodology."
The indexes that provide the basis for the AlphaDEX funds start with a broad-based index and are enhanced through a proprietary methodology that ranks the stock using several factors. The goal of the methodology is to identify the stocks within the index that exhibit the fundamental characteristics that enable them to provide the greatest potential for capital appreciation. The enhanced indexing approach seeks to generate positive alpha relative to the broad-based passive index from which it selects its stocks. Every step in the process is driven by a transparent, repeatable quantitative process.
The nine new AlphaDEX ETFs are:
First Trust Germany AlphaDEX Fund (NYSE: FGM)
First Trust Canada AlphaDEX Fund (NYSE: FCAN)
First Trust Australia AlphaDEX Fund (NYSE: FAUS)
First Trust United Kingdom AlphaDEX Fund (NYSE: FKU)
First Trust Taiwan AlphaDEX Fund (NYSE: FTW)
First Trust Hong Kong AlphaDEX Fund (NYSE: FHK)
First Trust Switzerland AlphaDEX Fund (NYSE: FSZ)
First Trust Developed Markets ex-U.S. Small Cap AlphaDEX Fund (NYSE: FDTS)
First Trust Emerging Markets Small Cap AlphaDEX Fund (NYSE: FEMS)
"With more than half of the world equity market capitalization represented by companies based outside of the U.S. and the accelerated pace of globalization, these additions to the First Trust AlphaDEX lineup provide investors with the potential for targeted international exposure and portfolio diversification," said Mr. Waldron.
For more information about First Trust, please contact Chris Moon of JCPR at 973-850-7304 or by email at cmoon@jcprinc.com.
About First Trust
Based in Wheaton, IL, First Trust and its affiliate First Trust Advisors L.P., provide a broad range of investment products and services that help financial advisors meet the financial needs and objectives of their clients. Among the firms' more than 200 investment product offerings are its family of 60 Exchange-Traded Funds, including the AlphaDEX® series of ETFs. As of January 31, 2011, 17 First Trust ETFs, including 10 AlphaDEX® ETFs, received a 4- or 5-Star Overall Morningstar RatingTM.* Founded in 1991 with the goal of offering investors a better way to invest, First Trust is nationally recognized for its proprietary, rules-based, quantitative investment methodology which it makes available in several of its product lines. As of 1/31/12, the firms managed or supervised approximately $51 billion in assets. For more information, visit www.ftportfolios.com.
You should consider the funds' investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 or visit www.ftportfolios.com to obtain a prospectus or summary prospectus which contains this and other information about each fund. The prospectus or summary prospectus should be read carefully before investing.
Risk Considerations: You could lose money by investing in a fund. Investors buying or selling fund shares on the secondary market may incur brokerage commissions. Investors who sell fund shares may receive less than the share's net asset value. A fund may be concentrated in an industry sector, which involves additional risks, including limited diversification. A fund may invest in small capitalization, mid capitalization and foreign companies, making a fund subject to additional risks. These funds are classified as "non-diversified." A non-diversified fund may invest a larger percentage of its assets in the securities of a smaller number of issuers. As a result, these funds may be more susceptible to the risks associated with these particular companies.
Ranking Criteria: The Morningstar RatingTM is provided for ETFs with at least a three-year history. Ratings are based on the ETF's Morningstar Risk-Adjusted Return measure which accounts for variation in monthly performance, placing more emphasis on downward variations and rewarding consistent performance. An ETF's risk-adjusted return includes a brokerage commission estimate. PLEASE NOTE, this estimate is subject to change and the actual brokerage commission an investor pays may be higher or lower than this estimate. Morningstar compares each ETF's risk-adjusted return to the open-end mutual fund rating breakpoints for that category.
Consistent with the open-end mutual fund ratings, the top 10% of ETFs in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The overall rating for an ETF is based on a weighted average of the ETF's 3, 5, and 10 year rating. The determination of an ETF's rating does not affect the retail open end mutual fund data published by Morningstar.
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