Industry Updates

Subprime mortgage ETFs

David Tuckwell

Today's listings


Another ETF open to subprime mortgages

Mutual fund specialist Hartford Funds has listed an actively managed bond ETF that's open to subprime mortgages and other kinds of junk debt.

According to its prospectus, HTRB will invest at least 70% of its funds in investment grade debt, while up to 20% can be invested in junk. HTRB can invest up to 40% in debts from a foreign issuer and up to 20% in currencies other than the US dollar. Within these loose parameters, HTRB is free to invest in pretty much any kind of debt with any dated maturity.

Fund of Funds ETF that tries to be different

Two Roads and Anfield Capital have listed a new actively managed and equally weighted "fund of funds" ETF that tries to be different.

The Anfield Capital Diversified Alternatives ETF (DALT) will invest mostly in "sectors, market segments or asset classes that do not represent the general investment universe," the prospectus says. It will do this by investing in other ETFs, CEFs and REITs. The sectors DALT will be most interested in include computing, medical sciences and nano-technology, infrastructure, resource exploitation and private equity. Securities will be selected based on their growth potential and risk.


Horizons eyes international horizons - through futures

Horizons ETF is listing a new ETFs in Canada that tracks mid and large cap companies in the world's richest countries outside of North America. The Horizons International Developed Markets Equity Index ETF (HXDM) gets exposure to foreign equity by futures contracts that are listed on "a major North American Exchange", its prospectus says. HXDM will be listed in both Canadian and US dollars.


US real estate comes to Taipei

Taiwanese issuer Capital Fund will be listing a new fund next month that tracks the American real estate market. The Capital Dow Jones U.S. Real Estate Index Exchange Traded Fund (00714), will track the popular Dow Jones benchmark, which is also used by iShares. Other popular REIT ETFs, such as those by Vanguard and Charles Schwab, use in-house indexes.

Today's news from around the web

Investors ability to sue ETF issuers curtailed by courts

Investors' ability to sue ETF providers in the US for bad risk warnings has been limited by a Californian court. During the August 2015 "flash crash", ETFs traded at sharp discounts compared with the sum of their holdings. Plaintiffs claimed that BlackRock knew this risk but failed to disclose it. But Blackrock successfully argued that this fault had to be pinned on them when ETFs are issued to authorised participants, which can never be done.

Currency-hedged ETFs fall from grace

Currency-hedged ETFs go in and out of fashion. Right now, they're out of fashion, with the biggest three US currency-hedged ETFs seeing $19 billion in outflows since 2016. Why? Because currency-hedged ETFs are ultimately hedging against a rising US dollar. And when the dollar performs poorly, as it has the past two years, currency-hedged funds lose their sheen.

Canadian experts dismiss ETF myths

A discussion in which Canadian experts discuss - and dismiss - key ETF myths. There is no liquidity problem with ETFs: they're as liquid as their underlying market. ETFs aren't destroying active management: both are still growing. ETFs do not undermine the IPO market: the correlation between assets in ETFs and the IPO market is 0.03%.

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