Unheralded $1B ETFs? They're Out There
These ETFs have $1 billion or more in assets but still are flying under the radar.
Right or wrong, it is often said that the $100 million watermark validates an ETF's existence and ensures that fund will not be subject to sudden extinction.
There is no empirical evidence to suggest that ETFs that are short on assets also fall short when it comes to performance. In fact, with so much attention being paid to just a handful of the largest funds, it is quite possible for an ETF
But $1 billion in AUM should be another story, right? Many investors might be apt to say, "Surely all of the $1 billion ETFs
ProShares Short S&P500 (SH): The S&P 500 has been grinding higher over the past few days, but apparently, some folks have not bought into the pseudo-rally. Either that or some are using the ProShares Short S&P500 as a hedging instrument on other long positions. The bottom line is this inverse product had over $1.8 billion in AUM as of July 19, according to ProShares data. The double-leveraged ProShares UltraShort S&P500 (SDS) also has north of $1.8 billion in AUM.
iShares MSCI ACWI Index Fund (ACWI): The iShares MSCI ACWI Index Fund really does not garner a lot of attention considering it is home to almost $2.7 billion in AUM and nearly 1,330 stocks. ACWI stands for "All Country World Index," but the U.S. dominates this ETF with an allocation of 47.1 percent. The U.K. is next at 8.3 percentage.
ACWI does present the opportunity for an interesting trivia question, that being "What is the only non-U.S. company found among the ETF's top-10 holdings?" Answer: Switzerland-based Nestle (NSRGY), the world's largest food company.
PowerShares Fundamental High Yield Corporate Bond ETF (PHB): Two funds, the $15.1 billion iShares iBoxx $ High Yield Corporate Bond Fund (HYG) and the $10.9 billion SPDR Barclays Capital High Yield Bond ETF (JNK) control the high-yield bond ETF debate.
To that end, it is not surprising that the PowerShares Fundamental High Yield Corporate Bond ETF, which has just under $1 billion in AUM, occasionally falls through the cracks. That should not be the case because over the past six months, PHB has slightly outperformed its two larger rivals.
SPDR Barclays Capital Short Term Corporate Bond ETF (SCPB): The SPDR Barclays Capital Short Term Corporate Bond ETF is a quiet $1.1 billion ETF with a few advantages. First, it is cheap with an expense ratio of just over 0.12 percent. Second, a modified adjusted duration of just 1.9 years means the fund is not heavily exposed to rising interest rates. Third, SCPB's 1.63 percent dividend yield is not great, but it is a little better than what investors would get with 10-year Treasuries.
Editor's Note: This content was originally published on Benzinga.com by The ETF Professor.
Below, find some more great ETF and market content from Benzinga:
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.