Four Budding ETF Rivalries Worth Watching (NORW, SIL, SMIN)
The U.S. ETF industry is now home 1,440 products with over $1.2 trillion in combined assets under management according to the latest data from the ETF Industry Association and with the pace of new ETF introductions racing higher those numbers are sure to increase.
What's also likely to increase is the number of interesting rivalries in the ETF universe, the logical result of some ETF sponsors issuing new funds that look a lot like old ones.
As has been noted, the first to market advantage is an important one for ETFs, but it's no guarantee that ETF will always be king of its respective hill.
With that let's have a look at four potentially compelling ETF rivalries that, not surprisingly, all involve new iShares funds. In no particular order...
Hi Ho Silver The battle for silver mining supremacy between the Global Silver Miners ETF (NYSE: SIL), the first silver mining ETF, and the iShares MSCI Global Silver Miners Fund (NYSE: SLVP) could be really interesting if for no other reason than that SLVP's expense ratio of 0.39% is a lot cheaper than SIL's 0.65%. Still, SIL has a distinct first-to-market advantage here and as the last few days have proven, SLVP's timing has been pretty lousy.
Since silver is so volatile, it's reasonable to surmise an ETF like SIL is used by short-term traders. In other words, SIL is optionable and has good liquidity. The same cannot yet be said of SLVP.
India Small Cap Style This one could be interesting because it involves three contenders: The EGShares India Small Cap ETF (NYSE: SCIN), the Market Vectors India Small Cap ETF (NYSE: SCIF) and the new iShares MSCI India Small Cap Index Fund (BATS: SMIN). Unfortunately for SMIN, it may also fall victim to bad timing.
Trading on BATS may prove to be a boon or a problem for the new iShares offering and while iShares doesn't have a penchant for closing ETFs, it will be interesting to see how short of a leash is given to SMIN.
EM Dividends There's a longstanding rivalry between iShares and State Street Global Advisors because they're the two biggest ETF sponsors and that rivalry could potentially expand as the SPDR S&P Emerging Markets Dividend ETF (NYSE: EDIV) and the iShares Emerging Markets Dividend Index Fund (NYSE: DVYE).
EDIV just celebrated its first birthday and now holds almost $300 million in AUM, but DVYE, which oddly enough has the same inception date as EDIV, is off to a fine start with almost $11 million in AUM in less than two weeks of trading. The combination of emerging markets and dividends should be enough to ensure both of these ETFs stick around for a long time.
ENOR has done alright in terms of AUM since its late January debut and just over 9,200 shares per day in average volume is fair for a new ETF, but ENOR has lagged its Global X rival since its debut and that's a factor that cannot be overlooked in crowning a winner in any ETF showdown.
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