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New Kids On The Block: Five New ETFs With The Recipe For Success

by
June 6, 2011 12:52 pm
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In April and May alone, a combined 82 new exchange traded products came to market, again indicating issuers are nowhere close to running short of ideas for new ETFs and ETNs.

That’s good news for investors, but not everything that is new, ETFs included, is worth embracing. New ETFs are a lot like aspiring actors that move to Los Angeles. Some really will end up to be big stars. Others may have years of getting bit parts, but that is enough to sustain them and keep them on the market. Others will simply disappear.

Here’s a list of five ETFs that have the right stuff in terms of not only being able to stay on the market for years to come, but also in terms of attracting robust trading volume and assets under management.

1) Global X FTSE Andean 40 ETF (NYSE: AND):
This may not be the best day to extol the virtues of AND, the first ETF offering combination exposure to Chile, Colombia and Peru, because Peruvian stocks are getting slammed on the back of that country’s presidential election results.

That said, the new MILA exchange that provides a home for equities from all three of the aforementioned countries could be a catalyst for AND going forward and the ETF has attracted over $7.7 million in assets under management in four months on the market. That’s not a bad haul.

2) First Trust Nasdaq CEO Smartphone Index Fund (Nasdaq: FONE):
FONE is a great example of right place, right time in the ETF world. The ETF is just a few days shy of being four months old and has accumulated almost $17 million in assets under management. While investors should note that FONE isn’t heavily allocated to popular smartphone plays such as Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG), the smartphone craze is only expected to get stronger over the next few years, and that bodes well for FONE’s future.

3) First Trust Brazil AlphaDEX Fund (NYSE: FBZ):
When FBZ made its mid-April debut, we noted it was facing stiff competition as there were already a healthy number of ETFs offering Brazil exposure on the market. While challenging the iShares MSCI Brazil Index Fund (NYSE: EWZ) is no small task, FBZ has an interesting niche for itself in that it offers plenty of exposure to Brazilian mid-caps, meaning investors don’t have to worry about excessive allocations to Petrobras (NYSE: PBR) and Vale (NYSE: VALE). FBZ has attracted almost $7.6 million in AUM in less than two months of trading.

4) Market Vectors LatAm Aggregate Bond ETF (NYSE: BONO):
Investors still like Latin America and apparently they like the bonds from that corner of the globe, too. BONO features the following country weights: Brazil 36.52%, Mexico 29.03%, Colombia 12.19%, Venezuela 6.50% and Argentina 4.17%. Issues from Chile, Peru, Panama, Jamaica and Uruguay are also featured in the ETF’s all-investment-grade mix. Not even a month old, BONO has already attracted $7.6 million in AUM.

5) Global X Fishing Industry ETF (NYSE: FISN):
FISN may seem like an obscure idea, but there are fundamentals in place that could keep this 20-stock ETF around for a long time. Don’t worry about the fact that you probably haven’t heard of many of FISN’s holdings because fishing is a huge global industry.

In 2008, CNN reported the industry employed 200 million across the globe and generated $80 billion in revenue. China’s per-capita fish consumption has been growing by 5.7% a year for the past five decades. No, those stats aren’t guarantees FISN will be the best ETF ever, but hey, the ETF has accumulated nearly $2.9 million in AUM in less than a month on the market.


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