January was a busy month for BlackRock, which rolled out a dozen new iShares-branded international ETFs in the month.  Even more interesting, the listings were done on three different U.S. stock exchanges.

BlackRock’s first batch of new ETFs for 2012 went the traditional route through NYSE Arca, which typically gets the lion’s share of new ETF listings.  Two more iShares international ETFs emerged on the Nasdaq on January 19.

The third wave, consisting of seven more single-country ETFs, were the first ETFs with a primary listing on BATS Global Markets, the third largest stock exchange in the U.S.  iShares MSCI Norway Capped Investable Market Index Fund (ENOR) became the first BATS-listed ETF on January 24.  Six more ETFs followed two days later.

Here is the rundown on the three new Nordic country funds:

iShares MSCI Denmark Capped Investable Market Index Fund (EDEN) launched on January 26 with a 0.53% expense ratio.  The underlying MSCI Denmark IMI 25/50 Index is a custom, free float-adjusted market capitalization index.  Largest allocations among the 32 holdings are Novo Nordisk 23.1%, Danske Bank 7.3%, AP Moeller-Maersk 7.2%, Carlsberg 5.9%, and DSV 4.2%.  Sector representation includes Health Care 35.5%, Industrials 27.0%, Financials 15.8%, Consumer Staples 8.5%, and Materials 6.3%.  (EDEN overview)

iShares MSCI Finland Capped Investable Market Index Fund (EFNL) began trading on January 26 with an expense ratio of 0.53%.  The underlying MSCI Finland IMI 25/50 Index is a custom, free float-adjusted market capitalization index.  The fund has 43 holdings, led by Nokia with 15.9%, Sampo 9.1%, Fortum 8.5%, Kone 6.9%, and UPM-Kymmene 5.3%.  Sector breakdown includes Industrials 28.3%, Technology 16.9%, Materials 16.0%, and Financials 13.0%.  (EFNL overview)

iShares MSCI Norway Capped Investable Market Index Fund (ENOR) came out on January 24 with an expense ratio of 0.53%.  The underlying MSCI Norway IMI 25/50 Index is a custom, free float-adjusted market capitalization index.  The fund’s 52 holdings are topped by Statoil 20.6%, Telenor 7.5%, Seadrill 7.4%, DNB 6.7%, and Orkla 4.7%.  Top sector breakdown is Energy 50.1%, Financials 13.0%, Materials 9.1%, Telecommunications 7.5%, and Industrials 7.4%.  (ENOR overview)

Analysis/Opinion: Not so long ago that accessing the Nordic countries via ETFs was difficult.  While iShares MSCI Sweden (EWD) has been around for more than 15 years, it was the only choice until Global X FTSE Nordic Region ETF (GXF) arrived in August of 2009.  Fifteen months later, Global X added Global X FTSE Norway 30 ETF (NORW).

The MSCI 25/50 index names (pdf) refer to the requirement for registered investment companies (a tax category that includes ETFs) to not have more than a 25% weighting in a single stock and for the combined weights of all stocks with a greater than 5% weighting to not exceed 50% of the fund.  This makes customized indexes necessary for many smaller countries.  Even with the cap, EDEN, EFNL, and ENOR all have large weightings in their top constituents.  Additionally, sector representation should be considered before buying these funds.  ENOR has more than half its assets in Energy, EDEN has more than a third in Health Care, and EFNL has a 28% allocation to Industrials.

Here is the run down on the four new single-country small cap funds:

iShares MSCI Australia Small Cap Index Fund (EWAS) launched on January 26 with an expense ratio of 0.59%.  The underlying index is a free float-adjusted market cap weighted index targeting the bottom 14% of equity market capitalization in Australia.  The largest of the fund’s 206 holdings include APA Group 2.0%, Atlas Iron 1.9%, Commonwealth Property Office 1.9%, Treasury Wine Estates 1.8%, and UGL 1.7%.  Sector allocations include Materials 26.2%, Industrials 20.2%, Financials 13.2%, Consumer Discretionary 13.0%, and Energy 9.3%.  (EWAS overview)

iShares MSCI Canada Small Cap Index Fund (EWCS) launched on January 26 with an expense ratio of 0.59%.  The underlying index is a free float-adjusted market cap weighted index targeting the bottom 14% of equity market capitalization in Canada.  The largest of the 246 holdings include SXC Health Solutions 1.7%, Keyera 1.5%, Provident Energy 1.4%, Detour Gold 1.3%, and Quadra FNX Mining 1.3%.  Sector representation includes Materials 35.2%, Energy 26.7%, Financials 10.8%, Consumer Discretionary 7.9%, and Industrials 7.4%.  (EWCS overview)

iShares MSCI Germany Small Cap Index Fund(EWGS) launched on January 26 with an expense ratio of 0.59%.  The underlying index is a free float-adjusted market cap weighted index targeting the bottom 14% of equity market capitalization in Germany.  Largest of the 81 holdings include Bilfinger Berger 5.5%, MTU Aero Engines Holdings 4.6%, Symrise 4.3%, Rhoen-Klinikum 3.4%, and SGL Carbon 3.3%.  Sector representation includes Industrials 34.5%, Technology 14.5%, Consumer Discretionary 12.8%, Health Care 12.5%, and Materials 11.4%.  (EWGS overview)

iShares MSCI United Kingdom Small Cap Index Fund (EWUS) launched on January 26 with an expense ratio of 0.59%.  The underlying index is a free float-adjusted market cap weighted index targeting the bottom 14% of equity market capitalization in the United Kingdom.  Largest of the fund’s 268 holdings include IMI 1.6%, Croda International 1.5%, Pennon Group 1.4%, Informa 1.3%, and Gulf Keystone Petroleum 1.3%.  Sector representation includes Industrials 23.1%, Consumer Discretionary 21.2%, Financials 17.7%, Materials 10.0%, and Technology 9.4%.  (EWUS overview)

Analysis/Opinion: ETF investors can remember the tickers for these new ETFs by just adding an “S” to the end of the tickers of their large-cap counterparts (EWA, EWC, EWG, and EWU).  Since the latter group targets the largest 85% of the market cap within their respective countries, there should be little or no overlap between the existing large cap ETFs and the new small cap offerings.

The new offerings have two direct competitors: IQ Small Cap Australia ETF (KROO) and IQ Small Cap Canada ETF (CNDA).  They became the first ETFs in this space at their March 2010 launch.  Both may need to reduce their current 0.69% expense ratios in order to remain viable alternatives to EWAS and EWCS.

Disclosure covering writer, editor, and publisher:  Long EWU.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

ProShares 30 Year TIPS/TSY Spread (RINF) listed on 1/12/12 with an expense ratio capped at 0.75% (RINF overview).  The underlying Dow Jones Credit Suisse 30-Year Inflation Breakeven Index tracks the performance of long positions in 30-year Treasury Inflation Protected Securities (TIPS) and duration-adjusted short positions in U.S. Treasury bonds of the closest maturity.  The difference in yield (or “spread”) between these bonds (Treasury yield minus TIPS yield) is commonly referred to as a “breakeven rate of inflation” and is considered to be a measure of the market’s expectations for inflation.  The index is designed to appreciate as the breakeven rate of inflation increases.  Additional information about the index is available at Dow Jones Indexes.  RINF is implementing this strategy with a combination of swaps and 30-year U.S. Treasury securities.

ProShares Short 30 Year TIPS/TSY Spread (FINF) listed on 1/12/12 with an expense ratio capped at 0.75% (FINF overview).  The new ETF seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Dow Jones Credit Suisse 30-Year Inflation Breakeven Index.  See the description of RINF above for additional information on the underlying index.  FINF is implementing this strategy with a combination of swaps and 30-year U.S. Treasury securities.

Analysis/Opinion:  RINF and FINF bill themselves as the first Breakeven Inflation ETFs.  However, PowerShares introduced similar inflation/deflation expectation products last month, although they were in an ETN wrapper.  Another major difference is that RINF/FINF target the 30-year spread while the INFL/DEFL pair from PowerShares measures the spread at three different maturities with 5-year securities nominally weighted at 50%, 10-year at 40%, and 30-year at 10%.  This should result in the new ProShares pair having more sensitivity (larger price swings) to changes in inflation expectations under most conditions.

SPDR S&P Small Cap Emerging Asia Pacific ETF (GMFS) listed on 1/12/12 with an expense ratio of 0.65% (GMFS overview).  The underlying S&P Asia Pacific Emerging Under USD 2 Billion Index is a market capitalization weighted index designed to track the investable universe of publicly traded small-cap companies domiciled in emerging Asian Pacific markets.  Country weightings are Taiwan 39.7%, China 23.4%, India 13.8%, Malaysia 9.6%, Indonesia 6.4%, Thailand 5.7%, and the Philippines 2.5%.  Sector breakdown includes Technology 21.6%, Financials 17.1%, Industrials 15.8%, Consumer Discretionary 13.4%, and Materials 12.3%.  GMFS currently has 491 holdings with none exceeding a 1% weighting in the fund.

Analysis/Opinion:  GMFS is the small-cap complement to the large-cap SPDR S&P Emerging Asia Pacific ETF (GMF) (GMF overview).  As is often the case, sector and country representations shift between large- and small-cap segments.  The large-cap GMF has its largest allocations going to China at 37.9% and Financials 25.2%.  Investors often mistake iShares Pacific ex-Japan (EPP) as being a competitive offering to GMF, but there is no overlap as EPP only covers developed markets.

PowerShares S&P Emerging Markets Low Volatility Portfolio (EELV) listed on 1/13/12 with an expense ratio capped at 0.29% (EELV overview).  The underlying S&P BMI Emerging Markets Low Volatility Index measures the performance of 200 of the least volatile stocks of the S&P Emerging BMI Plus LargeMid Cap Index.  Largest country allocations include Malaysia 23.3%, South Africa 18.6%, Taiwan 11.8%, Brazil 9.1%, and Chile 5.9%.  The sector breakdown has Financials at 25.4%, Utilities 15.4%, Consumer Staples 15.2%, Materials 10.1%, Telecommunications 10.0%, and Industrials 9.8%.  

PowerShares S&P International Developed Low Volatility Portfolio (IDLV) listed on 1/13/12 with an expense ratio capped at 0.25% (IDLV overview).  The underlying S&P BMI International Developed Low Volatility Index measures the performance of 200 of the least volatile stocks of the S&P Developed ex US and South Korea LargeMid Cap BMI Index.  Largest country allocations include Canada 20.3%, Japan 16.6%, U.K. 11.4%, Singapore 11.2%, and New Zealand 9.3%.  Sectors with more than 10% weightings include Financials 22.4%, Consumer Staples 17.9%, Industrials 14.0%, Consumer Discretionary 11.2%, Utilities 11.0%, and Health Care 10.3%. 

Analysis/Opinion:  PowerShares is trying to capitalize on the roaring success of its PowerShares S&P 500 Low Volatility Portfolio (SPLV) launched last May [Analysis of New High Beta and Low Volatility ETFs from PowerShares].  Not only did SPLV deliver on its promise of low volatility, but it also generated above average returns while kicking out above average yield.  Although not marketed as a dividend ETF, SPLV is now part of my ETF Dividend & Income Strategy.  I suspect EELV and IDLV will also be success stories.  IDLV has a current yield of about 3.5% while EELV yield data is not available at this time.

iShares MSCI Emerging Markets EMEA Index Fund (EEME) listed on 1/19/12 with an expense ratio of 0.49% (EEME overview).  The underlying index is a free float adjusted market capitalization weighted index that measures equity performance of the emerging market countries of Europe, the Middle East, and Africa (“EMEA”).  The largest of the 131 holdings includes Gazprom 10.0%, Lukoil 4.6%, MTN Group 4.4%, Sasol 4.3%, and Sberbank 4.0%.  The largest sector allocations fall to Energy 28.1%, Financials 24.6%, Materials 15.7%, and Telecommunications 10.6%.  Country weightings include South Africa 44%, Russia 30%, Poland 8%, and Turkey 7%.

iShares MSCI Emerging Markets Latin America Index Fund (EEML) listed on 1/19/12 with an expense ratio of 0.49% (EEML overview).  The underlying index is a free float adjusted market capitalization weighted index that measures equity market performance of Latin American emerging markets.  The largest of the 124 holdings includes Petrobras 7.0%, Vale 6.0%, American Movil 5.6%, and ITAU Unibanco 5.4%.  The five largest sector weightings are Financials 21.5%, Materials 21.1%, Energy 16.2%, Consumer Staples 14.4%, and Telecommunications 8.0%.  Country breakdown includes Brazil at 65%, Mexico 20%, Chile 8%, Columbia 4%, and Peru less than 1%.

Analysis/Opinion:  With these two new ETFs, iShares has begun the process of providing ETFs that divide the emerging markets into three major regions.  They have yet to offer the third region:  Emerging Market Asia Pacific.  However, as mentioned above in the GMFS analysis, the SPDR S&P Emerging Asia Pacific ETF (GMF) is such a fund.

AdvisorShares Accuvest Global Opportunities (ACCU) listed on 1/26/12 with an expense ratio of 1.78% that is capped at 1.80% (ACCU overview).  It is an actively managed fund-of-funds ETF targeting long-term capital appreciation in excess of the MSCI All Country World Index.  The portfolio manager, Accuvest Global Advisors, selects a portfolio of U.S. listed country-specific exchange traded funds (ETFs), using its proprietary multi-factor country ranking model.  Its current holdings and allocations are iShares MSCI Thailand (THD) 21.7%, iShares S&P 500 (IVV) 20.1%, iShares MSCI Brazil (EWZ) 15.6%, iShares MSCI South Africa (EZA) 14.9%, iShares MSCI Russia Capped (ERUS) 13.5%, and iShares FTSE China 25 (FXI) 13.0%.

Analysis/Opinion:  The AdvisorShares fee capping process and description leaves much to be desired.  It states the fees for ACCU will be capped at 1.25%, but the cap does not apply to the acquired fund fee expenses of 0.55%.  Therefore, the actual cap of 1.80% (1.25% + 0.55%) exceeds the stated gross expense ratio of 1.78%.  The ACCU prospectus (pdf) includes a discussion of the past performance of the portfolio manager, including charts and tables showing it underperformed its benchmark for the past 1-year and 5-year periods.

ProShares German Sovereign/Sub-Sovereign ETF (GGOV) listed on 1/26/12 with an expense ratio capped at 0.45% (GGOV overview).  The underlying Markit iBoxx EUR Germany Sovereign & Sub-Sovereign Liquid Index measures the performance of fixed rate debt securities of the Federal Republic of Germany as well as local governments and entities or agencies guaranteed by various German governments.  It has 33 constituents with an average yield to maturity of 1.9% and a modified adjusted duration of 4.8 years.  The fund currently holds about half of its assets in swaps with the other 50% directly in the underlying bonds.

Analysis/Opinion:  The relatively low yield of GGOV will likely make it more sensitive to currency fluctuations than interest rates.  GGOV will compete with PIMCO Germany Bond Index Fund (BUND), which also includes German corporate bonds.  Additionally, there is PowerShares DB German Bund Futures ETN (BUNL), which is an exchange-traded note and does not issue dividends.

Disclosure covering writer, editor, and publisher:  Long SPLV and THD.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Among the first listings of 2012 were three “volatility response” ETFs from Direxion, which attempt to achieve consistent volatility by controlling equity exposure based on observed volatility.  The first actively managed ETF launch of the year employs a Sector Scoring and Allocation Methodology (“SectorSAM)” to select other ETFs in a market neutral approach.  Two single-country (Singapore and Hong Kong) small cap ETFs were introduced by iShares, along with a fund covering all developed markets of the world.

1) Direxion S&P 1500 RC Volatility Response Shares (VSPR) listed on 1/11/12 with an expense ratio capped at 0.45% (VSPR overview).  The new Risk Control (“RC”) ETF seeks to provide a targeted risk level of 15% (annualized standard deviation) using a quantitative rules-based approach to dynamically reallocate exposure between equities (S&P 1500 Index) and U.S. Treasury Bills (T-Bills).

2) Direxion S&P 500 RC Volatility Response Shares (VSPY) listed on 1/11/12 with an expense ratio capped at 0.45% (VSPY overview).  The new ETF seeks to provide a targeted risk level of 15% using a quantitative rules-based approach to dynamically reallocate exposure between equities (S&P 500 Index) and U.S. Treasury Bills (T-Bills).

3) Direxion S&P Latin America 40 RC Volatility Response Shares (VLAT) listed on 1/11/12 with an expense ratio capped at 0.45% (VLAT overview).  The new ETF seeks to provide a targeted risk level of 18% using a quantitative rules-based approach to dynamically reallocate exposure between equities (S&P Latin America 40) and U.S. Treasury Bills (T-Bills).

Analysis/Opinion: The “RC” in the name stands for Risk Control.  Investors should not confuse the use of “Volatility” in the fund names with other ETFs that track VIX volatility futures.  Instead, for these new ETFs, the measured volatility of the related equity index functions as a throttle to vary the equity exposure as a means of producing the targeted volatility levels.  I am a proponent of targeted-volatility investing and therefore have keen interest in these new products.

Barclays ETN+ S&P VEQTOR ETN (VQT) is another product that attempts to hedge away the negative impacts of volatility.  However, rather than varying the exposure between equities and cash, the underlying index for VQT varies the exposure between equities and VIX futures.

4) AdvisorShares Rockledge SectorSAM ETF (SSAM) listed on 1/12/12 with an expense ratio capped at 1.50% (SSAM overview).  It is an actively managed fund-of-funds ETF hoping to “generate stable and consistent annual returns under all market conditions” using a market neutral approach.  The portfolio manager, Rockledge Advisors, uses its Sector Scoring and Allocation Methodology (“SectorSAM”) to buy sector ETFs it forecasts to outperform the S&P 500 while selling short an equal dollar amount of sector ETFs it believes will underperform. 

The methodology currently focuses on the Sector SPDR ETFs, so only nine sectors are used instead of the ten defined by GICS.  As of 1/22/12, the fund was long Materials (XLB) 34.4%, Technology (XLK) 33.9%, and Energy (XLE) 33.3%.  It was short Financials (XLF) -21.5%, Consumer Staples (XLP) -18.1%, Health Care (XLV) -17.2%, Consumer Discretionary (XLY) -16.3%, Industrials (XLI) -15.4%, and Utilities (XLU) -5.4%.  For the SPDR Select Sector family, the Telecommunications sector is included as part of Technology.

Analysis/Opinion: With indexed ETFs, we can generally expect the performance characteristics to mimic those of the underlying index.  With actively managed ETFs, there is no index, so the sponsor must give us some other means by which to set our expectations.  For SSAM we are told to expect “stable and consistent annual returns under all market conditions.”  However, we are not given any further information regarding the expected annual returns, the standard deviation (stability), or the past performance of the portfolio manager.  On the plus side, SSAM does not have much in the way of competition with Guggenheim Sector Rotation (XRO) on ETF Deathwatch.

5) iShares MSCI Hong Kong Small Cap Index Fund (EWHS) listed on 1/12/12 with an expense ratio of 0.59% (EWHS overview).  The underlying MSCI Hong Kong Small Cap Index is a free float-adjusted market capitalization index targeting the bottom 14% of the capitalization of Hong Kong securities.  The fund has 45 holdings with the largest allocations currently going to VTech Holdings 5.1%, Champion REIT 4.8%, Espirit Holdings 4.8%, AAC Technologies Holdings 4.6%, and Techtronic Industries 4.0%.  Sector composition is heavily skewed toward Consumer Discretionary at 44.1%, followed by Financials 18.5%, Industrials 12.2%, and Technology 9.2%.

Analysis/Opinion:  Blackrock is taking advantage of what I perceive to be the premature closure of IQ Hong Kong Small Cap ETF (former ticker HKK).  Index IQ shuttered its offering in December, just seven months after launch.  As I mentioned in my initial HKK review, Hong Kong small cap funds should have no overlap with the holdings of iShares MSCI Hong Kong (EWH) (EWH overview) and offer vastly different sector exposure.

6) iShares MSCI Singapore Small Cap Index Fund (EWSS) listed on 1/12/12 with an expense ratio of 0.59% (EWSS overview).  The underlying MSCI Singapore Small Cap Index is a free float-adjusted market capitalization index targeting the bottom 14% of equity market capitalization.  The fund has 38 holdings with the largest allocations currently going to Suntec REIT 7.7%, Capitacommercial Trust 7.6%, Venture Corp 4.2%, Biosensors International Group 4.0%, and SATS 4.0%.  Current sector composition has Financials at a hefty 48.8%, then Industrials 18.2%, Energy 6.2%, Technology 6.1%, and Consumer Staples 5.6%.

Analysis/Opinion:  This is the first ETF to offer access to Singapore small cap stocks.  By design, it should have no overlap with the holdings of iShares MSCI Singapore (EWS) (EWS overview) which targets the largest 85% of market capitalization in Singapore.  The top two sectors are the same for both funds with the large cap EWS having 42.9% in Financials and 24.9% in Industrials.

7) iShares MSCI World Index Fund (URTH) listed on 1/12/12 with an expense ratio of 0.24% (URTH overview).  The underlying MSCI World Index is a free float-adjusted market capitalization index targeting the developed markets of the world.  The fund has 1,490 holdings, and the five largest currently happen to all be U.S. companies: Exxon Mobil (XON) 1.8%, Apple (AAPL) 1.7%, International Business Machines (IBM) 1.0%, Microsoft (MSFT) 1.0%, and Chevron (CVX) 0.9%.  Country representation has the U.S. at 52.7%, U.K. 9.8%, Japan 9.1%, Canada 5.2%, and France 3.8%.  Sector breakdown includes Financials 17.7%, Technology 12.0%, Energy 11.8%, Industrials 11.1%, and Consumer Staples 11.0%.

Analysis/Opinion:  The name of the underlying index, and hence the ETF, is potentially misleading because the index does not include stocks from emerging market countries, which currently account for about 15% of the world’s equity market cap.  More appropriate names might be MSCI Developed World, MSCI 85% of the World, or MSCI EAFE + US + Canada.  By excluding emerging markets, URTH can make the claim that it is the only global ETF providing this level of coverage.  If you prefer a “world fund” that includes emerging markets, then consider iShares MSCI ACWI (ACWI) or Vanguard Total World Stock (VT).

Disclosure covering writer, editor, and publisher:  Long XLV and AAPL.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Quantities by broad categories for the 308 launches of 2011:

• 64 Style & Strategy
• 62 Sector
• 45 International
• 33 Bond
• 30 Commodity
• 27 Leveraged
• 24 Inverse
• 20 Volatility
• 3 Currency

The most prolific issuer of new products was Barclays, which brought out 25 ETNs under the iPath brand.  Following close behind was PowerShares with 24 new ETPs, Russell launched 23 ETFs, UBS issued 23 ETNs, and Global X came out with 22 ETFs.

The table below lists all 308 new products sorted by name.  The IPO date is the first day the product was listed and available for purchase.  The first trade may be a later date in some cases, as a few products do not have any first-day volume.  Additionally, the “inception date” listed for many ETFs is often a meaningless date as it is often a day or more before it actually becomes listed and available for purchase.

New ETFs and ETNs in 2011

Notes: 1) actively managed, 2) Fund-of-Funds, 3) delisted prior to end of year.  All exchange traded notes are identified with “ETN” as part of their name description.

List of 223 New ETPs for 2010 

List of 136 new ETPs for 2009 

Disclosure covering writer, editor, publisher, and affiliates: Long positions in some of the securities listed in the table. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

The new funds are Market Vectors Bank and Brokerage ETF (RKH), Market Vectors Biotech ETF (BBH), Market Vectors Oil Services ETF (OIH), Market Vectors Pharmaceutical ETF (PPH), Market Vectors Retail ETF (RTH), and Market Vectors Semiconductor ETF (SMH).

The underlying indexes are designed to provide liquid and diversified exposure to each particular industry.  As is typical of indexes, each is dynamic and will evolve over time to reflect changes to the industry it represents.  Common traits of the new ETFs include:

• Track one of the various Market Vectors US Listed 25 Indexes
• Hold 25 of the largest US listed stocks in the sector or industry
• Use a market capitalization weighting methodology
• Have expense ratios capped at 0.35%
• Rebalance quarterly to reflect index changes

Market Vectors Bank and Brokerage ETF (RKH) is truly global in nature, with just a 36% allocation to U.S. based banks.  Other country representation includes Canada 17%, U.K. 11%, Brazil 9%, Spain 8%, Switzerland 6%, and Japan 5%.  The five largest holdings are Wells Fargo & Co (WFC) 10.5%, HSBC Holdings ADR (HBC) 9.9%, JPMorgan Chase (JPM) 9.4%, Royal Bank of Canada (RY) 5.4%, and Toronto-Dominion Bank (TD) 5.3%.  RKH overview and RKH fact sheet (pdf).

Market Vectors Biotech ETF (BBH) is one of seven (five traditional and two geared) ETFs focused on biotechnology.  The five largest holdings are Amgen (AMGN) 18.2%, Celgene (CELG) 9.6%, Gilead Sciences (GILD) 9.6%, Biogen Idec (BIIB) 8.2%, and Alexion Pharmaceuticals (ALXN) 4.8%.  BBH overview and BBH fact sheet (pdf).

Market Vectors Oil Services ETF (OIH) has a good chance of retaining the role of its HOLDRS predecessor – being the most popular energy services industry ETF.  The five largest holdings are Schlumberger (SLB) 19.2%, Halliburton (HAL) 10.0%, National Oilwell Varco (NOV) 9.1%, Baker Hughes (BHI) 6.7%, and FMC Technologies (FTI) 4.8%.  OIH overview and OIH fact sheet (pdf).

Market Vectors Pharmaceutical ETF (PPH) is one of five pharmaceutical ETPs.  The five largest holdings are Johnson & Johnson (JNJ) 7.5%, Pfizer (PFE) 7.0%, Novartis (NVS) 5.7%, Merck & Co. (MRK) 5.2%, and Bristol-Myers Qsuibb (BMY) 5.1%.  PPH overview and PPH fact sheet (pdf).

Market Vectors Retail ETF (RTH) will likely trail far behind the current retailing ETF popularity leader – SPDR S&P Retail (XRT).  The five largest holdings are Wal-Mart Stores (WMT) 11.1%, Home Depot (HD) 6.9%, Amazon.com (AMZN) 6.7%, CVS Caremark (CVS) 5.8%, and Lowe’s Co (LOW) 5.1%.  RTH overview and RTH fact sheet (pdf).

Market Vectors Semiconductor ETF (SMH) also has a good shot at retaining the role of its HOLDRS predecessor – being the most popular semiconductor industry ETF.  The five largest holdings are Intel (INTC) 19.6%, Taiwan Semiconductor ADR (TSM), Texas Instruments (TXN) 7.1%, ASML Holding (ASML) 5.1%, and Broadcom Class A (BRCM) 4.9%.  SMH overview and SMH fact sheet (pdf).

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

A “positive trend” is established when the NASDAQ 100 Index closes at or above its historical 100-day simple moving average for five consecutive days.  A “negative trend” occurs when the index closes below its 100-day average for five days.  During a positive trend, TNDQ will track the NASDAQ 100 minus the 1.00% investor fee.  During a negative trend, TNDQ will track the performance of 3-month U.S. Treasury bills minus an investor fee of 0.50%.

The same concept is used across the entire RBS Trendpilot lineup, with the primary differences being the underlying markets and the number of days in the moving average.  The other RBS Trendpilot ETNs are:

• RBS US Large Cap Trendpilot ETN (TRND) times the S&P 500 using a 200-day moving average.
• RBS US Mid Cap Trendpilot ETN (TRNM) times the S&P MidCap 400 using a 200-day moving average.
• RBS Gold Trendpilot ETN (TBAR) times gold bullion using a 200-day moving average.
• RBS Oil Trendpilot ETN (TWTI) times crude oil futures contracts using a 100-day moving average.

Additional information on the new TNDQ is located in the overview, press release (pdf), fact sheet (pdf), and prospectus (pdf).

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

We all know Greece has its problems.  Many investors may still be surprised to know the country’s stock market lost nearly 90% of its market cap the past four years.  While there is no guarantee that the Greek economy will ever recover, US investors now have easy access.

The fund’s largest holdings include Coca Cola Hellenic 15.1%, National Bank of Greece 12.3%, Opap GA 8.7%, Hellenic Telecom 5.2%, Bank of Cyprus 3.5%, Hellenic Petroleum 3.4%, and Titan Cement Company 3.4%.  Top  sector allocations include Financials 35.1%, Consumer Discretionary 18.4%, Consumer Staples 12.7%, Industrials 9.3%, and Telecommunications 8.8%.

GREK’s expenses are capped at 0.69% and additional information is located in the summary, press release (pdf), fact sheet (pdf), and prospectus (pdf).

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

According to the company press release (pdf), the new ETFs use a verifiable, repeatable rules-based index approach.  They select stocks by focusing on insider transactions and analyst ratings of public company filings to determine weightings.

Direxion All Cap Insider Sentiment Shares (KNOW) holds 100 stocks selected from the S&P 1500 Index.  Top holdings as of 12/23/11 included Delphi Financial Group (DFG) 2.6%, Lincoln National (LNC) 2.5%, HollyFrontier (HFC) 2.4%, Gannett Co (GCI) 2.4%, and Smithfield Foods (SFD) 2.4%.  The top sector allocations were Energy 24.0%, Financials 19.6%, Technology 14.8%, Consumer Discretionary 14.5%, and Consumer Staples 8.9%.  Additional details are in the KNOW overview and fact sheet (pdf).

Direxion Large Cap Insider Sentiment Shares (INSD) holds 100 stocks from the S&P 500 Index.  Top holdings as of 12/23/11 included Gannett Co (GCI) 2.6%, Lincoln National (LNC) 2.5%, Ameriprise Financial (AMP) 2.5%, Tyson Foods (TSN) 2.5%, and MetLife (MET) 2.4%.  The largest sector allocations were Financials 22.1%, Energy 21.2%, Consumer Discretionary 17.4%, Industrials 11.3%, and Technology 9.0%.  Additional details are located in the INSD overview and fact sheet (pdf).

The new ETFs have an expense cap of 0.65% and share a common prospectus (pdf).  They face competition from one similar and two related products.  Guggenheim Insider Sentiment (NFO) also uses a Sabrient index and selects its 100 holdings from among all US listed stocks.  NFO follows an equal-weighted approach, has a 0.60% expense ratio, and has dramatically outperformed the market since inception five years ago.

Indirect competition will come from PowerShares Buyback Achievers (PKW) that buys stocks in which the company itself is buying its own shares.  PKW has an expense ratio of 0.70% and is beating the S&P 500 with lower volatility.  New entry AdvisorShares TrimTabs Float Shrink ETF (TTFS) is an actively managed ETF with a 0.99% expense ratio that buys stocks whose outstanding share quantity shrank over the past 120 days (float shrink).

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

The underlying DBIQ Duration-Adjusted Inflation Index and DBIQ Duration-Adjusted Deflation Index have very limited history, dating back only to 7/25/2011.  ETN performance is based on gain or loss of $0.10 (on a $50 starting value) for each 1 point increase or decrease in the applicable index, plus 3-month T-Bills, less an investor fee of 0.75%.  The indexes measure the TIPS spread at three different maturities with 5-year securities nominally weighted at 50%, 10-year at 40%, and 30-year at 10%.

Other inflation-oriented ETPs do not attempt to capture the performance difference between TIPs and Treasury bonds.  For example, ProShares UltraShort TIPS (TPS) is designed for investors wanting to hedge against a decline in TIPS or potentially benefit from a downturn in TIPS.  However, due to the non-symmetrical design of TIPS, a short position is not an out-and-out bet on deflation.

Additional information on INFL and DEFL can be found in the overview, fact sheet (pdf), and prospectus (pdf).  Since they are structured as ETNs (exchange traded notes) they are subject to the credit risk of Deutsche Bank, the issuer.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Global X NASDAQ 500 ETF (QQQV): summary page and fact sheet (pdf).  Largest holdings as of 12/22/11 are Apple (APPL) 11.7%, Microsoft (MSFT) 6.8%, Google (GOOG) 5.1%, Oracle (ORCL) 4.1%, and Intel (INTC) 3.9%.  Top five sector allocations are Technology 60.5%, Consumer Discretionary 16.7%, Health Care 13.2%, Industrials 4.2%, and Consumer Staples 2.4%.

Global X NASDAQ 400 Mid Cap ETF (QQQM): summary page and fact sheet (pdf).  Largest holdings as of 12/22/11 included Verisk Analytics (VRSK) 1.1%, Windstream (WIN) 1.1%, Discovery Communications (DISCA) 1.0%, Trimble Navigation (TRMB) 1.0%, and Ansys (ANSS) 0.9%.  Top five sector allocations are Technology 37.3%, Health Care 21.7%, Consumer Discretionary 18.1%, Industrials 10.5%, and Materials 3.7%.

The NASDAQ 500 Index appears to have about 79% of its capitalization in the largest 100 stocks (the NASDAQ 100 Index), with the NASDAQ 400 Index accounting for the other 21%.

Both funds have an expense ratio of 0.48%.  Additional information from Global X includes the fund profiles and index descriptions (pdf) along with the announcement press release (pdf).  The prospectus (pdf) also covers Global X NASDAQ 100 Global Technology Index ETF (QQQT), an ETF that is not yet available.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.