PIMCO Battles iShares for Treasuries

The new PIMCO 1-3 Year US Treasury ETF (TUZ) has been trading for two days now, as the bond giant’s first stab at the ETF market. The 1-3 Year U.S. Treasury Index Fund is a passively managed exchange-traded fund comprising primarily the high-quality component securities of the Merrill Lynch 1-3 Year U.S. Treasury Index. Management fees are listed at 15 basis points, which is the same as its primary competitor, the $7 billion iShares Barclays 1-3 Year Treasury Bond Fund (SHY). Given PIMCO’s position in the bond community, it shouldn’t be too hard to chip away at the mammoth iShares fund over time.

Money Flows to Fixed Income ETFs in Q1

Today, ETFPlanet has released its complete list of Exchange Traded Funds for the first quarter ending March 31, 2009. During the first quarter ETF and ETN assets totaled approximately $475 billion, down from the $541 billion at year end 2008, representing a 12% drop in assets. The number of issues also decreased from 845, to 839 during the same period. Listed below are the ten largest ETFs by net assets, and the change since December 31, 2008. By analyzing the change in asset value, and performance of the fund over the quarter, you can start to see where investors’ money is flowing. According to our data money was flowing into fixed income during the first quarter, as assets in iShares iBoxx Corporate Bond (LQD) and iShares TIPS Bond (TIP) both increased over 30%, while their performance was -6.4% and 3.5%, respectively. Assets in the iShares MSCI Emerging Markets ETF (EEM) increased over 10%, while the fund’s return was -0.6%.

One of the more exciting developments in the ETF community has been the increasing popularity of the Direxion 3x funds, which have grown to over $3 billion under management since their funds’ inceptions beginning in November 2008, and up from $1 billion at the end of 2008. The biggest gainer in assets was the Financial Bull 3x (FAS), which gained over $1 billion in assets during the quarter.

The Excel file which contains all 839 funds and is available for download on etfplanet.com for personal use. All data contained in the file is from Morningstar, and will be updated quarterly going forward.

XRO Sheds Energy & Tech for Finance & Medical

The Claymore/Zacks Sector Rotation ETF (XRO) recently rebalanced the fund’s holdings, on April 2^nd.  The ETF is based on the Zacks Sector Rotation Index, which uses a quantitative methodology to overweight sectors with “potentially superior risk-return profiles”.  The sector allocation is done on a quarterly basis.

In the most recent rebalancing, there was a shift away from Technology and Computers, and Energy, and new allocations in the Finance and Medical sectors.  Allocations have also been also been increased in Retail/Wholesale, and reduced in Business Services, Industrial Products, and Aerospace.  Listed below are the current allocations of the fund, and the increase or decrease compared to the last rebalancing that took play on January 5^th.

Medical:  36.3%, up from 0%

Retail/Wholesale:  32.1%, up from 18.6%

Finance:  11.6%, up from 0%

Business Services:  7.9%, down from 13.5%

Consumer Discretionary:  6.0%, up from 5.4%

Industrial Products:  5.0%, down from 7.8%

Aerospace:  0.7%, down from 5.8%

Consumer Staples:  0.3%, up from 0%

Autos/Trucks:  0%, down from 0.5%

Basic Materials:  0%, down from 5.1%

Computer & Technology: 0%, down from 25%

Construction:  0%, unchanged

Conglomerates:  0%, unchanged

Energy:  0%, down from 10.4%

Transportation:  0%, down from 7.9%

Utilities:  0%, unchanged.

The fund is currently comprised of 100 companies, and has a price to earnings ratio of 13.0.  The fee structure is capped at 60 basis points, and currently has total managed assets of around $28.8 million trading on the NYSE Arca exchange.

XLF Breaks Resistance on High Volume

Financials surged Thursday on results from Wells Fargo (WFC) that were better than expected, sending the whole sector higher. The financial ETF (XLF) broke through previous resistance levels, on the heaviest volume in 10 sessions. Wells Fargo finished the day up more than 31%, Bank of America (BAC) closed up 35%, and Citigroup (C) closed up 12%.

Barclays (BCS) announced the sale of its iShares unit to CVC Capital Partners, a private equity group for $4.4 billion.

Complete ETF List for 2008

Today, ETFPlanet has released its complete list of Exchange Traded Funds for the year ending 2008. The Excel file which contains all 845 funds is available for download on etfplanet.com for personal use. All data contained in the file is from Morningstar, and will be updated quarterly going forward. The file allows the user to view funds based on fund family, fund type, and asset range.

Two ETFs for International Treasuries

In recent weeks, there hasn’t been a hotter market than fixed income, most notably treasuries. So it’s no surprise that the two newest product launches from Barclays’ iShares are both international treasury ETFs. The two new funds, the S&P/Citigroup International Treasury Fund (IGOV) and the S&P/Citigroup 1-3 Year International Treasury Bond Fund (ISHG) began trading in late January, with very light volume.

As expected, all of characteristics of these two funds, except for the average maturity are almost identical. The country allocation for both of the funds are very similar with exposure of 25% to Japan, 10% to Germany, 8% to Italy, and 7% to France. The credit rating exposures for both funds are 53% AAA, 5% AA+, and 25% AA. As for the expense ratios for these new ETFs, they are both listed at 35 basis points.

For more information visit http://www.etfplanet.com

International 3X ETFs Hit the Market

As we predicted the Direxion 3X bull and bear ETFs have been a huge success, and are now awash in volume daily. Traders love the big daily moves in these funds with the market’s current volatility. Yesterday was the launch of six more 3X funds from Direxion, launching bull and bear MSCI EAFE, Emerging Markets, and Technology shares. Here is a rundown of the new 3X funds that Direxion has added to their lineup:

(DZK) – Developed Markets Bull 3X Shares – MSCI EAFE
(DPK) – Developed Markets Bear 3X Shares – MSCI EAFE
(EDC) – Emerging Markets Bull 3X Shares – MSCI Emerging Markets
(EDZ) – Emerging Markets Bear 3X Shares – MSCI Emerging Markets
(TYH) – Technology Bull 3X Shares – Russell 1000 Technology
(TYP) – Technology Bear 3X Shares – Russell 1000 Technology

Trading in these new ETFs is likely to be light at first, but expect more liquidity in the coming months as more investors and traders become aware of these new funds, similar to their previous issues. As for the expense ratios for these new triple return ETFs, they are listed from 94 to 102 basis points, which is fair for 3X leverage.

According to the Direxion website, there will be even more 3X funds on the way. In a prospectus Direxion is showing plans for bull and bear funds for homebuilders, real estate, clean energy, Latin America, India, China, and the ever popular BRIC index.