Whatever Happened to...The First Trust LatAm ETF?

One thing 2011 was not short on was the introduction of new exchange-traded products. In fact, a record 308 ETFs and ETNs came to market last year and plenty of those funds were of the emerging markets variety. Problem is 2011 was not the best of years to be rolling out new emerging markets fare as many of the most venerable emerging markets ETFs suffered through a miserable. Of the nearly 20 ETFs introduced last year by First Trust, five can be tagged with the emerging markets label and one of those funds was the First Trust Latin America AlphaDEX Index Fund FLN. Since its debut on April 20, 2011, FLN has predictably struggled, shedding almost 21% of its value as nearly every ETF with exposure to Brazil was savagely repudiated last year. Today, the First Trust Latin America AlphaDEX Index Fund has just over $2.5 million in assets under management and average daily volume of 1,375 shares. The volume figure isn't terrible, but as an interesting note, this piece is being written after 3PM Eastern time on Wednesday January 4 and according to Yahoo Finance, not a single share in FLN has changed hands. Sure, that's just one day, but it's not a good sign either. On the other hand, FLN and its 50-stock lineup could make for an interesting 2012 rebound candidate should Latin American stocks find their way back into the good graces of investors. Materials, utilities, consumer staples and industrials all get double-digit allocations in FLN. The ETF's exposure to financials (1.8%) and energy names (8.2%) is surprisingly low and those could also be selling points for risk-averse investors.. However, FLN faces cheaper, larger and more established competition in the form of ETFs like the SPDR S&P Emerging Latin America ETF GML. FLN, which has an expense ratio of 0.8%, allocates its entire weight to Brazil, Mexico and Chile. With an expense ratio of 0.59%, GML has $121.1 million in AUM and also features Peru and Colombia in its lineup. Of course, we cannot forget to mention FLN also must do battle with the iShares S&P Latin America 40 Index Fund ILF. That ILF has a similar country breakdown to GML and features fees of 0.5% with a whopping $1.78 billion in AUM. Plus, GML and ILF offer somewhat decent yields while FLN does not. Indeed, it would appear that FLN has its work cut out for it in 2012. Good places to start for the ETF in terms of being a more able competitor would be a lower expense ratio and adding Colombia and Peru to its country allocations at weights that surpass the aforementioned iShares and SPDR offerings.