{"id":1819,"date":"2021-07-12T10:48:16","date_gmt":"2021-07-12T10:48:16","guid":{"rendered":"https:\/\/investwithanedge.com\/?page_id=1819"},"modified":"2021-07-12T10:48:16","modified_gmt":"2021-07-12T10:48:16","slug":"focusshares-rides-again","status":"publish","type":"page","link":"https:\/\/investwithanedge.com\/focusshares-rides-again\/","title":{"rendered":"FocusShares Rides Again"},"content":{"rendered":"
They\u2019re back. Many of you reading this column have probably never heard of FocusShares, the firm that introduced four \u201cfocused\u201d ETFs in November 2007 and closed them down less than eleven months later. However, even as a defunct ETF sponsor, there was value in the firm\u2019s exemptive relief filing. Scottrade recognized that value and acquired FocusShares in 2010.<\/p>\n
Yes, they\u2019re back, but in name only. The new \u201cFocusShares\u201d is mostly devoid of any ties to the past. The new FocusShares is now a brand of Scottrade, the successful discount broker, and the products enjoy the benefits of that affiliation. The sponsor has also teamed up with Morningstar to provide the underlying indexes and to help improve brand recognition.<\/p>\n
FocusShares yesterday (3\/30\/2011) announced its new family of 15 exchange-traded funds (ETFs). They are all based on indexes from Morningstar, all sport very aggressive industry-leading pricing, and all trade commission-free for customers of Scottrade. The entire lineup is listed below.<\/p>\n
Two of the ETFs, the broad market (FMU) and large cap (FLG) funds, have expense ratios capped at 0.05%. Three have expenses capped at 0.12%: mid cap (FMM), small cap (FOS), and real estate (FRL). The remaining 10 sector ETFs all have expense ratios capped at 0.19%. According to FocusShares, these are the lowest ETF expenses available to investors (within each of their respective categories).<\/p>\n
Each underlying Morningstar index is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the designated publicly traded companies.<\/p>\n
The 15 new FocusShares ETFs:<\/p>\n
There is a single prospectus covering all 15 new Focus Morningstar ETFs (pdf) and a new FocusShares website to house all the fund data.<\/p>\n
Success for the new FocusShares is far from guaranteed, as the brand faces numerous obstacles. First and foremost is the formidable entrenched competition of the other major commission-free ETF offerings:<\/p>\n
Second, Morningstar may be a recognizable name, but not in the indexing world. Three former Claymore Morningstar SuperSector ETFs were closed in December 2009. Additionally, there are 12 existing ETPs based on Morningstar indexes that are struggling to attract investor attention (and assets).<\/p>\n