Today's listings

Canada

Royal Bank of Canada lists three funds

Canada's largest company, the Royal Bank of Canada, is listing three new ETFs in Toronto. They are:

  • RBC Canadian Bank Yield Index ETF (RBNK)
  • RBC 6-10 Year Laddered Canadian Corporate Bond ETF (RMBO)
  • RBC Short Term US Corporate Bond ETF (RUSB)
One of the enjoyable ironies of banks listing bank ETFs is that the banks usually end up tracking themselves. And in this regard, RBNK doesn't disappoint. RBNK will track an index of the biggest banks in Canada weighted by dividend yields. The National Bank of Canada and Canadian Imperial Bank take up half the index's weight between them. RBC weighs in at fifth.

Listing a banking ETF in Canada is an interesting proposition because the Canadian stock market, much like its close cousin, Australia, tends to be dominated by the biggest banks anyway. In the MSCI Canada Index, Canadian banks take seven of the top 10 spots by market cap. This means that the country's stock exchange, as a whole, tends to correlate with the performance of its banks.

RMBO and RUSB are very different. They are both actively managed and hoover up debts issued in Canada and the US. RMBO will have the additional feature of being divided ("laddered") into five groupings with successive maturities from six to ten years. I could not find any information on which corporates or what the ratings of the bonds would be.

Taiwan

Fubon lists preferred US ETF

Fubon Securities, one of Taiwan's biggest ETF issuers by assets, is listing the Fubon S&P US Preferred Stock ETF (00717) in Taipei. 00717 will track the S&P US Preferred Stock Index, which puts together an index of US preferred stocks. Preferred stocks are different from regular shares in that they are more secure. They come higher in the capital structure and have a higher claim on income security.

Today's news from around the web

Vanguard votes on genocide

Vanguard is a mutual, so people who owns its ETFs also own shares in the company and get to vote on how it operates. As part of the company's once-in-a-decade annual shareholder meeting, Vanguard is sending out a postal vote. Curiously, the postal vote includes members' views on African genocides, and whether Vanguard should divest from companies alleged to be involved. Vanguard's management is pushing against the initiative.

Ride the IBM wave

IBM has reported some of its best ever earnings in Q3, giving a lift to its stock prices and outlook. So which ETFs work best to help gain exposure to IBM? Tech ETFs are the obvious choice but as they tend to give better exposure to IBM's competitors, they might not be the best way to go. A better bet might be the Ultra Dividend Revenue ETF (RDIV), which weights IBM 5% and is lighter on the competition.

Indexing is the real revolution

Opinion piece. The ETF revolution is less about ETFs and more about indexing. As a result of ETFs - but more importantly, of indexes - people no longer view stocks as stocks, but rather as blocs or groupings. Thus investors no longer see specific companies with specific business models -- instead they see "equities". This is at once an important change and a dumbing down.