ProShares Leverages Currency and Commodities

The biggest name in short and leveraged funds has released a new group of ETF’s, with the promise of more to come. Having wide success with their more traditional style and sector leveraged and short funds, ProShares has now launched a series of double long and double short currency funds, covering the Yen and Euro, as well as two natural resource funds, covering the DJ-AIG commodity, and DJ-AIG crude oil indexes. Similar funds from other sponsors are already trading, but I doubt ProShares will have any problems gaining attention with their new ETFs. Here is a rundown of the new funds that ProShares now offers:

(ULE) – Ultra Euro
(EUO) – UltraShort Euro
(YCL) – Ultra Yen
(YCS) – UltraShort Yen
(UCD) – Ultra DJ-AIG Commodity
(CMD) – UltraShort DJ-AIG Commodity
(UCO) – Ultra DJ-AIG Crude Oil
(SCO) – UltraShort DJ-AIG Crude Oil

Although trading in these new ETFs is currently light, expect more liquidity in the coming months as more investors and traders become aware of these new funds, much like the launch of the other very popular ProShares ETFs. Four additional funds for gold and silver prices are also in the works, both double long and double short. As for the expense ratios for these newly launched ETFs, they are listed at 95 basis points, which is similar to most of their funds.

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

Direxion Launches Triple Leverage ETFs

Last week was an historic moment in American history as the United States elected its first African American president, but it was also an historic day for the ETF investing enthusiast. Shortly after the ballots were counted, and America knew who their next commander in chief was going to be, Direxion finally launched their newest investment products, a family of 3X Leveraged ETFs. A lineup that includes both bull and bear strategies for the Russell 1000 and 2000 indexes, and the energy and financial sectors will be should to grab the attention of traders and investors in the coming weeks and months. With volatility at an all time high recently, the daily returns of these funds should both excite, and scare onlookers. Here is a rundown of the 3X funds that Direxion now offers:

(BGU) – Large Cap Bull 3X Shares – Russell 1000
(BGZ) – Large Cap Bear 3X Shares – Russell 1000
(TNA) – Small Cap Bull 3X Shares – Russell 2000
(TZA) – Small Cap Bear 3X Shares – Russell 2000
(ERX) – Energy Bull 3X Shares – Russell 1000 Energy
(ERY) – Energy Bear 3X Shares – Russell 1000 Energy
(FAS) – Financial Bull 3X Shares – Russell 1000 Financial Services
(FAZ) – Financial Bear 3X Shares – Russell 1000 Financial Services

Although trading in these new ETFs is currently light, expect more liquidity in the coming months as more investors and traders become aware of these new funds, much like the launch of the very popular ProShares 2X ETFs. Many of the popular ProShares funds like UYG and SKF were slow at first, now they turn out a tremendous amount of volume on a daily basis. 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. As these funds gain in popularity, I would expect more fund launches in additional sectors.

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

Claymore Launches Global Shipping ETF

The new Claymore Global Shipping Index ETF (SEA) has been trading for a little over a month now, and a lot has changed since this new fund set sail. The top holdings of the fund are now more concentrated, the prior second largest holding is now the 14th largest, and the energy sector allocation of the fund has gained about a 4% additional weighting. The Global Shipping fund is based on the Delta Global Shipping Index, including companies that derive at least 80% of their revenues from the seaborne transport of goods or the operating and leasing of ships. The minimum market cap for a company to be included in the fund is $250 million, and a 30 day trading volume of $2 million.

SEA is country heavy in Greece (34%), the United States (17%), Bermuda (16%), and the Bahamas (11%).

The top 10 holdings in the Global Shipping Index ETF are:

Teekay LNG Partners – 5.48%
Frontline Ltd. – 4.89%
Tsakos Energy Navigation – 4.86%
Diana Shipping – 4.80%
Teekay Tank – 4.26%
Ship Finance International – 4.03%
DHT Maritime Inc. – 3.82%
Knightsbridge TA – 3.78%
Seaspan Corp. – 3.64%
Euroseas Ltd. – 3.60%

The fund is currently comprised of 30 companies, and has a price to earnings ratio of 6.6. The fee structure is capped at 65 basis points, and currently has total managed assets of around $5.7 million trading on the NYSE Arca exchange.

Clean Energy ETFs Face off: GEX vs. PBW

Global energy demand is on the rise and nations, businesses and individuals are looking more than ever for new renewable, clean sources of energy. This new surge of interest in the clean, renewable energy space has many people looking to the sun, the wind, the ocean, ethanol & bio fuels, and other more obscure technologies. Investors are pouring money into new projects such as wind farms, solar farms, and other breakthrough technologies. Even T. Boone Pickens, a lifetime oil man, is getting behind the revolution.

Currently there are two ETFs that dominate the clean alternative energy sector, PowerShares WilderHill Clean Energy Portfolio (PBW) and Van Eck’s Market Vectors Global Alternative Energy ETF (GEX). These two funds appear to be quite similar, and in many aspects they are. However, a closer look reveals many of their differences in structure, size, and value.The first of these ETFs to hit the market was PowerShares’ PBW, which tracks the WilderHill Clean Energy Index. This index is comprised of 54 securities covering small (58%), mid (26%), and large cap (16%) companies. Roughly 2 years after the launch of PBW, Van Eck’s GEX hit the market, which tracks the Ardour Global Index. This index is comprised of 30 securities covering small (11%), mid (40%), and large cap (49%) companies. When looking at the top five holdings of the two funds as a percentage of the total fund, PBW’s top five make up 15%, whereas GEX’s top five make up a much larger 45% of the fund. Take a closer look at the individual holdings, and you will see just how different these two funds are. The older PBW has some very small companies, such as ReneSola (SOL) and EMCORE (EMKR) as its top solar holdings, compared to First Solar (FSLR), Q-Cells, and Suntech Power (STP) in GEX. Below is a comparison of the top 10 holdings of each fund.

On a value comparison, PBW’s average trailing P/E ratio is around 38, while GEX is sporting a 47 trailing P/E. Both of these ETFs are good investments for direct exposure to the wind and solar energy sector, however Van Eck’s GEX seems to be the more appropriately weighted of the two, despite its lack of diversification. If the underlying index that PBW tracks were to reshuffle to a more relevant weighting, it would deserve a second look.

For more ETF resources, visit http://www.etfplanet.com/

Van Eck Launches Gulf States Index ETF

The new Market Vectors Gulf States Index ETF (MES) launched on July 23rd, the most recent region specific ETF to hit the market. The Gulf States fund is based on the Dow Jones GCC Titans 40 Index, which is comprised of public companies that are headquartered in countries that belong to the Gulf Cooperation Council (GCC) or that generate most of their revenues from countries belonging to the council. In addition to being part of the GCC, companies in the index must have market caps greater than $100 million, a 3-month average daily turnover of $1 million, and trade on recognized stock exchanges. MES is country heavy in Kuwait (52%), the United Arab Emirates (26%), Qatar (15%), and Oman (4%).

The Gulf States Index ETF is the most recent of a slew of Middle East, Africa, and frontier market ETFs to become available. PowerShares recently launched a similar, but more diverse MENA Frontier Countries Portfolio ETF (PMNA) which also has top country exposure in Kuwait, and exposure in Qatar, the United Arab Emirates, and Oman. Other similar ETFs include State Street’s Emerging Middle East and Africa Fund (GAF), Market Vectors Africa Index Fund (AFK), and Claymore’s Frontier Markets ETF (FRN).

The top 10 holdings in the Gulf States Index ETF are:

Mobile Telecommunications Co. – 12.14%
Kuwait Finance House – 10.45%
National Bank of Kuwait – 7.92%
Emaar Properties – 7.21%
National Industries Group – 5.43%
Qatar National Bank – 3.28%
Public Warehousing Co. – 2.87%
Global Investment House – 2.83%
First Gulf Bank – 2.65%
Commercial Bank of Kuwait – 2.63%

The fund has a heavy weighting in banks (38%), followed financial services (22%), and real estate (11%). The expense ratio for the fund is 0.98%, and trades on the NYSE Arca exchange.

USO Breaks its Upward Trendline...Finally

The moment that many investors, and all consumers have been waiting for has finally come, the possibility that oil could finally be topping out. Today the United States Oil ETF (USO) broke its upward trendline that was set back in February. In order to hold the February trend, USO would have needed to hold the $110 mark. Whether or not this will lead to a significant drop in oil, or a sideways trading range remains to be seen. Either way, the break of this trend puts significant doubt in investors and traders that the rally in oil can continue.

The best way to play a potential drop in oil is the MacroShares $100 Oil Down ETF (DOY), which tracks the inverse price of crude.

The First Middle East Frontier ETF

The eagerly awaited PowerShares MENA Frontier Countries ETF (PMNA) launched on July 9th, the second frontier ETF to hit the market. Claymore’s Frontier Markets ETF (FRN) started trading in June. Although both funds lay claim to the “frontier” market, the two couldn’t be any more different in their holdings. PowerShares’ fund is based on the NASDAQ OMX Middle East North Africa Index, whereas Claymore’s fund tracks the Bank of New York Mellon New Frontier DR Index. PMNA is country heavy in Egypt and Kuwait, and FRN is heavy in Poland and Chile.

PowerShares describes the index that PMNA is tracking in more detail on their website: “The Index seeks to provide direct exposure to liquid stocks of companies that have the majority of their assets or services residing in MENA frontier market countries, which include Kuwait, Bahrain, Qatar, the United Arab Emirates, Oman, Lebanon, Egypt, Jordan and Morocco.” The largest holding in the fund is Arab Bank PLC, which accounts for roughly 10% of the funds assets. In terms of sector allocation, the fund is 55% financials, 19% telecom, 13% industrials, 10% materials, and the remainder in energy and utilities. The current top ten holdings in the fund are as follows:

Arab Bank PLC – 10.08%
Emaar Properties – 7.71%
Nat’l Ind. Grp S.A.K. – 5.91%
Mobile Tele. Co. K.S.C. – 5.44%
Orascom Constr. Ind S.A.E. - 5.10%
Orascom Telecom Holding – 4.94%
Ban. Marocaine du Comm. – 4.69%
Maroc Telecom – 3.91%
Kuwait Fin. House K.S.C. – 3.65%
Solidere GDR Reg S – 3.49%

On a fundamental basis, the trailing P/E ratio for the fund is 14, and price to book is around 2.7 for the 50 issues that make up the fund. The expense ratio for the fund is 0.95%, and trades on the NASDAQ market.