This week in portfolio products news, Global X, Van Eck and Destra launched new funds while J.P. Morgan Worldwide Securities Services inked a deal with RIA FocusShares to service 15 new Focus Morningstar ETFs. Meanwhile, the Roumell Opportunistic Value Fund launched earlier this year has been getting attention in the business media.
Global X Launches Waste Management ETF
Global X Funds, the New York-based provider of exchange traded funds, on Wednesday launched the Global X Waste Management ETF (WSTE). WSTE is approximately evenly divided among the disposal of hazardous waste, non-hazardous waste and recycling sectors.
It tracks the Solactive Global Waste Management Index, which tracks the price movements in shares of companies that are active in those same sectors. As of April 7, the three largest components of the index were Stericycle Inc., Waste Management Inc., and Veolia Environnement SA.
“The Waste Management ETF provides relatively easy access to a global industry that continues to grow rapidly as the world’s population and individual incomes expand along with the need to manage waste and recycle resources,” said Global X Funds CEO Bruno del Ama in a statement.
The proper disposal of hazardous and non-hazardous waste is a growing aspect of many industries, especially as corporations are held more accountable for the waste they produce, according to Global X’s news release. “Investors in WSTE may stand to benefit from mandatory safety standards and environmental regulations imposed on these companies.”
IndexUniverse compares WSTE to Van Eck Global’s Market Vectors Environmental Services ETF.
Van Eck Launches Russia Small-Cap ETF
In other Van Eck news, the New York-based asset manager on Thursday announced the launch of its newest ETF, the Market Vectors Russia Small-Cap ETF (RSXJ).
RSXJ is designed to give investors pure-play exposure to the developing local Russian economy as measured by the country’s small-capitalization companies. Its underlying index is the Market Vectors Russia Small-Cap Index, part of Van Eck’s proprietary family of Market Vectors indices.
Russia is among the least expensive of the major emerging markets from a valuation perspective, according to a Van Eck news release that also notes that Russia’s stock market price-to-earnings ratio is just 6.6 times, which represents a “significant” discount versus emerging markets stocks in general. Before Van Eck’s launch of RSXJ, the firm had focused on large-cap companies in its Market Vectors Russia ETF (RSX).
“The best way to gain pure-play exposure to a country’s domestic economy is through smaller companies that derive their revenue primarily from doing business locally,” said Van Eck emerging markets analyst Ed Kuczma in a statement. “Other potential advantages with small caps generally include less political interference, relatively better corporate governance practices and relatively better protection for minority shareholder interests.”
IndexUniverse reports that the benchmark index has 35 companies, including Pharmstandard,as well as property developer LSR Group and O’Key Group.
Destra Introduces Two New Mutual Funds
Investment advisory firm Destra Capital Management, Lisle, Ill., announced the April 8 launch of two new mutual funds, the Preferred and Income Securities Fund and the Focused Equity Fund.
The Preferred and Income Securities Fund’s objective seeks to achieve total return, with an emphasis on high current income. The Focused Equity Fund’s objective is to seek long-term capital appreciation.
Destra serves as investment advisor on the two funds. The Preferred and Income Securities Fund is sub-advised by Flaherty and Crumrine, which specializes in the management of preferred securities. The Focused Equity Fund is sub-advised by WestEnd Advisors, which specializes in sector-focused equities strategies.
The new funds build on Destra’s existing lineup of mutual funds sub-advised by Zebra Capital Management: International L-Series Fund, Global L-Series Fund and U.S. All Cap L-Series Fund. The funds are based on the research of Zebra founders Roger Ibbotson and Zhiwu Chen, which suggests that stocks with low trading volumes offer better discounts and outperform more actively traded peers over time.
“Advisors are seeking strategies that emphasize income while accounting for inflation, particularly as the retiree population grows,” said Destra CEO Dominic Martellaro in a statement. “In addition, advisors seek strategies that pursue excess returns both through downside risk management and innovative investment theories. We are assembling a platform of managers who are uniquely positioned to make a difference in portfolio construction, whether as recognized leaders in their fields or as pioneers in offering wholly new and proprietary approaches.”
Prior to founding Destra, Martellaro held positions as president of broker-dealer, EVP and member of the executive committee of Janus Capital Group as well as managing director of national sales for Morgan Stanley Van Kampen and managing director of the west region for SEI Corp.
JPMorgan in ETF Deal With FocusShares, Morningstar
J.P. Morgan Worldwide Securities Services on Tuesday announced that registered investment advisor FocusShares has appointed it to service the RIA’s 15 new Focus Morningstar ETFs. FocusShares is an ETF sponsor and affiliate of online investing firm Scottrade Inc.
The ETFs began trading March 30 on NYSE Arca and are the first investment products sponsored by FocusShares since Scottrade acquired it in June 2010.
The Focus Morningstar ETFs include: a U.S. market ETF; small-cap, mid-cap and large-cap ETFs; and 11 sector ETFs, including basic materials, communication services, consumer cyclical, consumer defensive, energy, financial services, health care, industrials, real estate, technology and utilities.
J.P. Morgan offers services for the development, launch and servicing of ETFs. It currently handles 138 ETFs with total assets of more than $97 billion.
Recent Roumell Opportunistic Value Fund Launch in the News
The Roumell Opportunistic Value Fund (RAMVX, RAMSX) entered the deep value space in January as a new mutual fund offering. This first mutual fund from Roumell Asset Management (RAM), which has managed separate accounts for more than a decade, is lead-managed by RAM President Jim Roumell.
Since its launch, the Roumell fund has garnered attention in the business media.
Writes Reuben Gregg Brewer for Value Line: “With a successful business in place, why did Roumell launch Roumell Opportunistic Value Fund? When I asked that question, the response from him was competitive spirits. That’s probably true, but my perception was that Roumell was tired of playing ball in the shadows and wanted to jump to the ‘big leagues,’ to be seen on a larger stage. Sure, these things are encompassed by ‘competitive sprits,’ but that term is too refined for the fire in Roumell’s belly.”
Writes James K. Glassman for Kiplinger’s Personal Finance: “The portfolio of Roumell Opportunistic Value bears watching. The fund, launched this year, is run by James Roumell, a Chevy Chase, Md., money manager who was one of the stars of The Wall Street Journal's now-defunct weekly stock-picking contest. Roumell, whose performance numbers over the past decade are similar to [Yacktman Fund’s Don] Yacktman's, says his main criterion for deep value is a positive answer to the question, ‘Would I take this company private in a heartbeat?’”