A Closer Look At 2 New Actively Traded ETFs
A new entrant into the fast-growing world of exchange-traded funds has entered with some steam.
WBI Investments, an investment advisor, currently manages approximately $3 billion in assets for clients. Its new venture (ETFs) started with 10 new funds that are listed on the NYSE Arca.
The ETFs will fall into the actively managed category that is growing but still greatly lags the passive funds. One of the biggest benefits of investing in ETFs is the fact they are passive and transparent. An actively managed ETF removes the two benefits.
The 10 ETFs will not track an index as most funds do, but rather will use a computer-driven selection process to meet the ETFs objectives.
Of the 10 ETFs, the largest has $147 million in assets and the smallest is at $79 million; overall, the total is above $1 billion in assets as a fund company. These are impressive numbers, and the seed money is well above average.
Two of the ETFs that concentrate on income have the most assets under management at this time.
The WBI Tactical High Income Shares ETF (NYSE: WBIH) has a combination of ETFs and individual stocks in its holdings. WBIH has 19 holdings with total assets under management just under $144 million. Its top holdings include the iShares IBOXX Investment Grade Corporate Bond ETF with a 20.2 percent holding, the iShares U.S Preferred Stock ETF at 11.2 percent and SPDR Barclays Capital High Yield Bond ETF 9.7 percent.
The fund began trading on August 26. With an expense ratio of 1.05 percent, it is among the most expensive in the industry.
The WBI Tactical Income ETF (NYSE: WBII) also has an ETF, individual stock composition with total assets under management at $147 million. Its top holdings include LQD wish makes up 20 percent of the fund, followed by the Vanguard Intermediate-Term Corporate Bond at 12.9 percent and the Vanguard Long-Term Corporate Bond ETF 10.9 percent. WBII was launched on August 27. WBI also boasts a 1.05 percent expense ratio.
Investors looking to take an active approach to investing, similar to an actively managed mutual fund, could consider the 10 WBI ETFs. Being patient and waiting for the ETFs to trade for a couple months may be the best option for investors considering the high-cost, actively managed ETFs.
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