Investors: 7 ETFs To Be Excited For In 2013 (PICK, BOND, EMLP, TUR, EIPO)
Stoyan Bojinov: With over 1,400 ETPs on the market and other wild year on the books, it’s quite clear that the exchange-traded industry is continuing to grow its roots despite a mixed economic landscape. Democratization remains a driving theme in the ETF universe and investors have been quick to take advantage of cost-efficient products offering access to increasingly popular asset classes; some of the most successful fund launches in 2012 include PIMCO’s Total Return ETF (NYSEARCA:BOND), iShares’s MSCI Global Select Metals & Mining Producers (NYSEARCA:PICK) and First Trust’s North American Energy Infrastructure Fund (NYSEARCA:EMLP).
Investors of all styles and sizes were on the hunt for meaningful yield in 2012, and this theme is likely to carry over into the new year as slow growth and low-rates appear poised to stick around on both sides of the Atlantic Ocean.
In light of the sluggish global recovery, we have picked out seven intriguing filings that are currently on deck and could hit the market at some point in 2013:
1. Market Vectors Saudi Arabia ETF
As investors continue to shed their home country bias, international offerings appear poised to attract more interest as anemic growth plagues much of the developed world. The Saudi Arabia ETF filing from Van Eck marks yet another stride forward in opening up previously hard-to-reach asset classes, giving investors great flexibility when it comes to geographically rounding out their portfolio’s equity component. With energy consumption set to increase across the globe, it’s likely that the oil-centric market of Saudi Arabia is well-positioned to profit. We just wonder just when this ETF will hit the street.
2. ProShares Listed Private Equity ETF
Investors’ risk appetites have improved considerably over the last few months as solid economic data has helped to restore confidence. Those looking to bet on a bullish rebound for the beat-down financials sector have no shortage of instruments available. One particular area in this corner of the market that has caught our eye is the private equity space; this asset class is difficult to reach for mainstream investors, which is why we’re excited about ProShares’s private equity ETF filing. Currently, the only offering which targets private equity companies is PSP from PowerShares, which has accumulated over $298 billion in assets under management since launching in late 2006.
3. EGShares Turkey Small Cap ETF
After seeing the impressive performance (up 60% in 2012) posted by (NYSEARCA:TUR), the only Turkey-specific ETF on the market, we’re excited to see what the nation’s up-and-coming companies have to offer. Turkey is home to a rapidly expanding middle class that is favorably positioned between Europe and Asia, presenting investors with a lucrative opportunity as this market further develops over the coming years. The proposed ETF from EGShares will consist of small cap equities that are domiciled in Turkey and have a market capitalization between $100 million and $2 billion.
4. Market Vectors Global Chemicals ETF
With economic recovery on the horizon, the industrial sector appears poised to profit as developed and emerging markets alike kick back into gear. We’re excited about this Van Eck ETF as it will be the first of its kind, offering targeted exposure to the global chemicals industry. The filing mentioned that the proposed portfolio would consist of both foreign and domestic companies involved in the research, development or manufacture of chemicals or the marketing of products or services related to the industry.
5. Renaissance IPO ETF
(NYSEARCA:EIPO), offered through UBS, provides exposure to internet-related companies that have been publicly traded for less than three years; however, we’re interested in seeing this methodology carried over to a broader universe of potential holdings. As such, we are excited about newcomer Renaissance Capitals’ plans to enter the industry with an IPO-based ETF. This proposed fund will track an index comprised of a revolving list of U.S. IPOs that meet certain criteria, which is changed on a two-year rotation.
6. First Trust Morningstar Diversified Futures Fund
As investors have grown more comfortable with accessing alternative strategies through the ETF wrapper, issuers have responded by filling the product development pipeline with innovative ideas. One product in particular that we’re excited for is First Trust’s proposed broad-based futures fund; this actively-managed ETF will seek to generate positive total returns uncorrelated to broad equity markets. This ETF is also expected to be split 50/50 between commodities and currency/equity futures, presenting itself as a potentially attractive vehicle for those looking to tap into several asset classes using an active futures-based strategy.
7. U.S. Golden Currency Fund
The currency space could also see some innovative newcomers in 2013, including a basket portfolio from U.S. Commodity Funds. We’re particularly excited about this proposed currency basket ETF as it will feature an equal-weighted portfolio of five currencies that will be rebalanced on a monthly basis. The underlying holdings will be selected annual from a list of the 25 most actively traded currencies, with the exception of the U.S. dollar since it will serve as the base currency for this strategy.
Written By Stoyan Bojinov From ETF Database Disclosure: No Positions
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