Some New ETFs Already Thriving


Some new exchange traded funds take a while to capture investors' attention, but others are successful right out of the gate. The funds in the latter category seemingly have no problem attracting assets as soon as they start trading. For the more than 70 new ETFs that have debuted this year, the group is predictably mixed.

Some new ETFs have been immediately successful while others are going to have to grind it out in their quests to become prolific asset gatherers.

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Related: Embrace These New ETFs.

"Some of the newer ETFs have been relatively quick to attract investor interest. For example, we see at least 23 equity ETFs launched since the start of 2012 that recently had a market capitalization of more than $100 million," said S&P Capital IQ in a new research note.

Still, overcoming the heard mentality that has been pervasive in financial markets since the dawn of time can be difficult for new ETFs. Critics assert that investors should stand idly by, waiting for new funds to become "seasoned." Those critics also say that investors need to wait for new ETFs to gain a certain amount of volume and assets before getting involved, though no one has actually said what those numbers need to be.

"Among equity ETFs launched in 2013, S&P Capital IQ Equity Research has an Overall Ranking on 18, including two that debuted as recently as June Horizons S&P 500 Covered Call ETF (NYSE:HSPX) and the Barron's 400 ETF (NYSE:BFOR)," said S&P Capital IQ. The research firm rates those ETFs Marketweight and Underweight, respectively.

One of the new ETFs S&P Capital IQ is bullish on is the iShares MSCI USA Value Factor ETF (NYSE:VLUE). The iShares MSCI USA Value Factor ETF debuted in April as part of a five-ETF lineup of iShares factor-driven funds.

VLUE offers exposure to U.S. large and mid-cap stocks with a focus on companies with lower valuations based on fundamentals. VLUE also holds 602 stocks and charges 0.15 percent per year. Seven of the new ETF's top-10 holdings are Dow components with Apple (NASDAQ:AAPL), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) the outliers. Other top-10 holdings include Exxon Mobil (NYSE:XOM), J.P. Morgan Chase (NYSE:JPM) and Chevron (NYSE:CVX).

VLUE's top-10 holdings account for just 20.15 percent of the ETF's weight and the ETF has double-digit allocations to five sectors financial services, technology, energy, consumer discretionary and health care. Financial services is by far the largest at nearly 22 percent.

VLUE, which S&P Capital IQ rates Overweight, has already amassed $113.4 million, in assets under management. The ETF has gained 12.1 percent since coming to market.

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