VanEck ETF Trust VanEck IG Floating Rate ETF (ARCA: FLTR)

Latest news for VanEck ETF Trust VanEck IG Floating Rate ETF (ARCA:FLTR)

VanEck IG Floating Rate ETF Trading under the new Product Name to begin at the market open on September 13, 2022.

VanEck ETF Trust VanEck IG Floating Rate ETF

The fund normally invests at least 80% of its total assets in securities that comprise the funds benchmark index. The index is comprised of U.S. dollar-denominated floating rate notes issued by corporate entities or similar commercial entities that are public reporting companies in the United States and rated investment grade. The fund is non-diversified.

VanEck IG Floating Rate ETF

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Market Vectors Investment Grade Floating Rate ETF

FLTR

GDXJ

HILO

PowerShares DB US Dollar Index Bullish Fund

ETFs to Watch August 15, 2012 (BRF, FLTR, UUP)

Bonds

Dividends

Intraday Update

FLOT

FLRN

Floating Rate Bond ETFs Your Broker Forgot to Mention

BKLN

Two New SPDR Bond ETFs Extend Lineup

Here is the ETF Professor's ETF Watch List for Wednesday August 15, 2012.

Strong chart plays: Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) and the WisdomTree Equity Income Fund (NYSE: <a class="ticker" href="/stock/dhs#NYSE">DHS</a>).

Give the Market Vectors Oil Services ETF (NYSEL: OIH).

Check in with the Market Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdxj#NYSE">GDXJ</a>).

Emerging markets plays of the day: Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>), EGShares Low Volatility EM Dividend ETF (NYSE: <a class="ticker" href="/stock/hilo#NYSE">HILO</a>) and the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: Market Vectors Investment Grade Floating Rate ETF (NYSE: <a class="ticker" href="/stock/fltr#NYSE">FLTR</a>).

As global equity markets remain volatile, investors continue to look for somewhere to stash their cash, regardless of anemic interest rates. Resultantly, bond funds continue to thrive. One overlooked bond investment option some individuals might want to consider is floating rate securities. These securities offer periodically resetting interest payments, with rates tied to a representative interest rate index, <a href="http://www.investinginbonds.com/learnmore.asp?catid=9&amp;subcatid=52&amp;id=275">according to InvestingInBonds</a>.

Floaters, as these securities are often called, offer another benefit. They often have short durations, which significantly reduces exposure to the risk of rising interest rates. Interest paid on floaters is not compounded, but many do pay make monthly payouts, helping boost the allure of these products for income investors. 

Of course, investors can access floaters via ETFs. Not surprisingly, given that floaters do not get much attention in the bond world, floating rate bond ETFs do not get much press among bond funds. Here are three your broker probably forgot to tell you about.

iShares Floating Rate Note Fund (NYSE: <a class="ticker" href="/stock/flot#NYSE">FLOT</a>)
By far the largest of the floating rate bond ETFs, the iShares Floating Rate Note Fund has amassed $239 million in assets under management (AUM) since its June 2011 debut. FLOT stands out as valid option for investors craving a low duration bond fund. It has an effective duration of just 0.14 years <a href="http://us.ishares.com/product_info/fund/overview/FLOT.htm">according to iShares data</a>. 

Home to 215 holdings, FLOT features a 30-day SEC yield of 1.12 percent and a favorable expense ratio of 0.2 percent. More than 75 percent of FLOT's holdings hail from the banking and industrial sectors while another 11.5 percent of the fund's weight is allocated to agency bonds.

Market Vectors Investment Grade Floating Rate ETF (NYSE: <a class="ticker" href="/stock/fltr#NYSE">FLTR</a>)
The Market Vectors Investment Grade Floating Rate ETF is the oldest of the floating bond ETF trio, having debuted in April 2011. Although FLTR is far smaller than its iShares rival with just $7.3 million in AUM, FLTR is also slightly less expensive with annual fees of 0.19 percent. 

In addition, FLTR is smaller by number of holdings with 21 and this ETF features an average modified duration of almost 2.7 years. Year-to-date, FLTR has gained 4.3 percent compared to a 2.4 percent jump for FLOT. On the Standard &amp; Poor's rating scale, almost 96 percent of FLTR's holdings are rated investment grade. The ETF has a 30-day SEC yield of 1.13 percent.

SPDR Barclays Capital Investment Grade Floating Rate ETF (NYSE: <a class="ticker" href="/stock/flrn#NYSE">FLRN</a>)
The SPDR Barclays Capital Investment Grade Floating Rate ETF is the newest member of the floating rate ETF group, having debuted in November 2011. It is also the least expensive fund in the trio with an annual expense ratio of just 0.15 percent. With 102 holdings, FLRN has a modified adjusted duration of just 0.13 years. FLRN has $9.1 million in AUM and a 30-day SEC yield of 1.16 percent.

For more on obscure bond ETFs, click <a href="http://www.benzinga.com/markets/bonds/12/07/2759979/3-more-high-yield-bond-etfs-your-broker-forgot-to-mention">here</a>.

BlackRock (<a class="ticker" href="/stock/blk#">BLK</a>) introduced the iShares Floating Rate Note Fund (FLOT) on June 17, 2011.  The new ETF seeks investment results that correspond generally to the price and yield performance of the Barclays Capital US Floating Rate Note &lt; 5 Years Index.
Floating rate notes have their interest rates adjusted periodically.  This makes them less price sensitive to interest rate changes while potentially being able to capture and distribute higher yields in a rising interest rate environment.  Investors wanting a better understanding of how these securities work should read BlackRock's excellent <a href="http://us.ishares.com/content/stream.jsp?url=/content/en_us/repository/resource/introducing_flot.pdf&amp;bp=true&amp;c=D5K&amp;cmp=ProductLaunch&amp;chn=EMC&amp;mobilefilter=off" target="_blank">Mechanics of the iShares Floating Rate Note Fund (FLOT)</a> (pdf).
The underlying Barclays Capital US Floating Rate Note &lt; 5 Years Index consists of 314 constituents with an average yield to maturity of 0.74% and an effective duration of just 0.12 years. 
The fund uses a sampling technique in an attempt to match the index characteristics.  FLOT currently holds 60 securities with an average yield to maturity of 0.81% and an effective duration of 0.14 years.  Adjusting for its 0.20% expense ratio, the fund's initial yield estimate is 0.6% with monthly payments.
Country of issuance breakdown includes US 49.0%, Australia 11.3%, UK 9.6%, France 7.1%, Netherlands 5.3%, Canada 2.8%, and others 15.0%.  The sector breakdown is Financials 65.2%, Agencies 20.8%, Industrial 10.4%, and others 3.6%.
FLOT becomes the third floating rate ETF on the market.  <a href="http://investwithanedge.com/fltr-investment-grade-floating-rate-etf" target="_blank">Market Vectors Investment Grade Floating Rate ETF</a> (<a class="ticker" href="/stock/fltr#">FLTR</a>) is a direct competitor to FLOT.  It currently has a 12-month yield of 0.7%, effective duration of 0.10 years, and an expense ratio capped at 0.19%.  <a href="http://investwithanedge.com/bkln-the-first-senior-loan-etf" target="_blank">PowerShares Senior Loan Portfolio</a> (<a class="ticker" href="/stock/bkln#">BKLN</a>) holds non-investment grade (“junk”) floating rate securities with longer maturities, which makes it quite different from FLOT and FLTR.  BKLN currently has a distribution yield of 3.8% and a net expense ratio of 0.83%.
Additional background and information on FLOT is provided in the <a href="http://us.ishares.com/newsroom/pr_2011_06_17.htm" target="_blank">press release</a>, <a href="http://us.ishares.com/product_info/fund/overview/FLOT.htm" target="_blank">overview page</a>, <a href="http://us.ishares.com/content/stream.jsp?url=/content/en_us/repository/resource/fact_sheet/flot.pdf&amp;mimeType=application/pdf" target="_blank">fact sheet</a> (pdf), and <a href="http://us.ishares.com/content/stream.jsp?url=/content/en_us/repository/resource/prospectus/is_p_flot.pdf&amp;mimeType=application/pdf" target="_blank">prospectus</a> (pdf).
Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
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iShares Floating Rate Note Fund (FLOT) Launched

BlackRock's (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares unit, the world's largest ETF manager, introduced its first floating rate note fund today, the iShares Floating Rate Note Fund (NYSE: FLOT). 

Floating rate bonds pay variable rates rather than featuring fixed coupons as most fixed income investments do. FLOT is benchmarked to the Barclays Capital US Floating Rate Note &lt; 5 Years Index.

There is some competition in the floating rate arena already. In April, Van Eck Global introduced the Market Vectors Investment Grade Floating Rate ETF (NYSE: <a class="ticker" href="/stock/fltr#NYSE">FLTR</a>). FLTR has an expense ratio of 0.19% and has accumulated $7.4 million in assets under management since its late-April debut.

All of FLOT's holdings are denominated in U.S. dollars and issues from U.S. companies make up about half of the portfolio. Australia (11%), the U.K. (10%), France (7%), and the Netherlands (5%) also figure prominently in the new ETF, according to ETFdb.com.

FLOT, which features an expense ratio of 0.2%, already has nearly $20 million in assets under management, according to the iShares Web site. 

“The value of floating rate bonds fluctuates much less in response to market interest rate movements than the value of fixed-rate bonds,” said Russ Koesterich, iShares Chief Investment Strategist at BlackRock. “They can be a key instrument to help fixed-income investors insulate their portfolio in a rising inflation environment. While we don't see this as a near term threat, we still believe that interest rates are likely to rise, arguably substantially, in 2012 and beyond.”

With the introduction of FLOT, iShares now has 39 fixed-income ETFs on the market.

iShares Rolls Out Floating Rate Note ETF

A barrage of product introductions in April resulted in 23 new ETFs and 20 new ETNs coming to market.  The number of launches matches the 43 in June 2008 while falling short of the record, 50 in January 2007.  The month-end quantity now stands at 1,216 (consisting of 1,053 ETFs and 163 ETNs).  Actively-managed ETF listings remained unchanged at 34.
April became the fourth month in a row without any closures.  However, the streak ends there as BXDD, Barclays' 3x no-reset inverse S&amp;P 500 ETN, becomes <a href="http://investwithanedge.com/bxdd-bites-the-dust" target="_blank">the first casualty of 2011</a> later this week.  The four-month stretch of no closures is the longest since 2007.
Trading activity plummeted in April, with total ETP dollar volume declining 30% to less than $1.3 trillion.  There were only 13% fewer trading days than March, so daily trading activity was down as well.
The number of ETFs in the Billion Dollar Club, those averaging more than one billion dollars in daily trading activity, dropped from eleven to just seven.  However, those seven funds accounted for more than 56% of all ETP dollars traded.  New to the list this month was iShares Silver Trust (<a class="ticker" href="/stock/slv#">SLV</a>), which saw unprecedented trading activity of $67 billion due to the strong rally in silver.  SLV was the third most active ETF behind SPDR S&amp;P 500 (<a class="ticker" href="/stock/spy#">SPY</a>) at $374 billion and iShares Russell 2000 (<a class="ticker" href="/stock/iwm#">IWM</a>) at $84 billion.
Products averaging more than $100 million of trading per day numbered 67, a decrease of eight from March.  Those 67 funds, just 5.5% of all ETPs, accounted for 89% of all dollars traded.
Assets under management were $1.14 trillion at the end of April, up +5.5% for the month and +12.7% year-to-date.

<table class="wptable rowstyle-alt" id="wptable-97" cellspacing="1" cellpadding="2">
<thead>
<tr>
<th class="sortable" style="width:250px" align="left">April 2011 Month End</th>
<th class="sortable" style="width:70px" align="center">ETFs</th>
<th class="sortable" style="width:70px" align="center">ETNs</th>
<th class="sortable" style="width:70px" align="center">Total</th>
</tr>
</thead>
<tr>
<td style="width:250px" align="left">Currently Listed U.S.</td>
<td style="width:70px" align="center">1,053</td>
<td style="width:70px" align="center">163</td>
<td style="width:70px" align="center">1,216</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Listed as of 12/31/2010</td>
<td style="width:70px" align="center">967</td>
<td style="width:70px" align="center">132</td>
<td style="width:70px" align="center">1,099</td>
</tr>
<tr>
<td style="width:250px" align="left">New Introductions for Month</td>
<td style="width:70px" align="center">23</td>
<td style="width:70px" align="center">20</td>
<td style="width:70px" align="center">43</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Delistings/Closures for Month</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
</tr>
<tr>
<td style="width:250px" align="left">Net Change for Month</td>
<td style="width:70px" align="center">+23</td>
<td style="width:70px" align="center">+20</td>
<td style="width:70px" align="center">+43</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">New Introductions YTD</td>
<td style="width:70px" align="center">86</td>
<td style="width:70px" align="center">31</td>
<td style="width:70px" align="center">117</td>
</tr>
<tr>
<td style="width:250px" align="left">Delistings/Closures YTD</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Net Change YTD</td>
<td style="width:70px" align="center">+86</td>
<td style="width:70px" align="center">+31</td>
<td style="width:70px" align="center">+117</td>
</tr>
<tr>
<td style="width:250px" align="left">Actively-Managed (qty)</td>
<td style="width:70px" align="center">34</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">34</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Assets Under Mgmt ($ billion)</td>
<td style="width:70px" align="center">$1,119.4</td>
<td style="width:70px" align="center">$17.6</td>
<td style="width:70px" align="center">$1,137.0</td>
</tr>
<tr>
<td style="width:250px" align="left">% Change in Assets</td>
<td style="width:70px" align="center">+5.5%</td>
<td style="width:70px" align="center">+4.1%</td>
<td style="width:70px" align="center">+5.5%</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Monthly $ Volume ($ billion)</td>
<td style="width:70px" align="center">$1,243</td>
<td style="width:70px" align="center">$18.7</td>
<td style="width:70px" align="center">$1,262</td>
</tr>
<tr>
<td style="width:250px" align="left">% Change in Monthly $ Volume</td>
<td style="width:70px" align="center">-30.0%</td>
<td style="width:70px" align="center">-39.5%</td>
<td style="width:70px" align="center">-30.1%</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Avg Daily $ Volume > $1 Billion</td>
<td style="width:70px" align="center">7</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">7</td>
</tr>
<tr>
<td style="width:250px" align="left">Avg Daily $ Volume > $100 Million</td>
<td style="width:70px" align="center">66</td>
<td style="width:70px" align="center">1</td>
<td style="width:70px" align="center">67</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Avg Daily $ Volume > $10 Million</td>
<td style="width:70px" align="center">216</td>
<td style="width:70px" align="center">14</td>
<td style="width:70px" align="center">230</td>
</tr>
</table>

 Data sources:  AUM from National Stock Exchange, daily prices and volume of individual ETPs from Norgate Premium Data, fund counts and all other information compiled by Invest With An Edge.
New products launched in April (in chronological order):
<ol>
<li>Market Vectors Germany Small-Cap ETF (<a class="ticker" href="/stock/gerj#">GERJ</a>) (<a href="http://investwithanedge.com/market-vectors-unveils-first-germany-small-cap-etf" target="_blank">Market Vectors Unveils First Germany Small Cap ETF</a>)</li>
<li>ProShares UltraShort 3-7 Year Treasury (TBZ) (<a href="http://investwithanedge.com/proshares-introduces-additional-inverse-treasury-etfs" target="_blank">ProShares Introduces Additional Inverse Treasury ETFs</a>)</li>
<li>ProShares Short 7-10 Year Treasury (TBX)</li>
<li>SPDR Barclays Capital Issuer Scored Corporate Bond ETF (CBND) (<a href="http://investwithanedge.com/fundamental-indexing-comes-to-investment-grade-bond-etfs" target="_blank">Fundamental Indexing Comes To Investment Grade Bond ETFs</a>)</li>
<li>Global X Waste Management ETF (<a class="ticker" href="/stock/wste#">WSTE</a>) (<a href="http://investwithanedge.com/global-x-waste-management-etf-wste-launches" target="_blank">Global X Waste Management ETF Launches</a>)</li>
<li>ProShares Ultra High Yield (UJB) (<a href="http://investwithanedge.com/proshares-juices-up-junk-and-investment-grade-bonds" target="_blank">ProShares Juices Up Junk and Investment Grade Bonds</a>)</li>
<li>ProShares Ultra Investment Grade Corporate (IGU)</li>
<li>Market Vectors Russia Small-Cap ETF (<a class="ticker" href="/stock/rsxj#">RSXJ</a>) (<a href="http://investwithanedge.com/market-vectors-russia-small-cap-etf-rsxj-now-trading" target="_blank">Market Vectors Russia Small-Cap ETF Now Trading</a>)</li>
<li>SPDR Nuveen S&amp;P High Yield Municipal Bond ETF (HYMB) (<a href="http://investwithanedge.com/buying-hymb-requires-a-leap-of-faith" target="_blank">Buying HYMB Requires a Leap Of Faith</a>)</li>
<li>First Trust Asia Pacific Ex-Japan AlphaDEX Fund (FPA) (<a href="http://investwithanedge.com/first-trust-adds-13-alphadex-etfs-to-lineup" target="_blank">First Trust Adds 13 AlphaDEX ETFs to Lineup</a>)</li>
<li>First Trust Brazil AlphaDEX Fund (<a class="ticker" href="/stock/fbz#">FBZ</a>)</li>
<li>First Trust China AlphaDEX Fund (<a class="ticker" href="/stock/fca#">FCA</a>)</li>
<li>First Trust Developed Markets Ex-US AlphaDEX Fund (FDT)</li>
<li>First Trust Emerging Markets AlphaDEX Fund (FEM)</li>
<li>First Trust Europe AlphaDEX Fund (<a class="ticker" href="/stock/fep#">FEP</a>)</li>
<li>First Trust Japan AlphaDEX Fund (FJP)</li>
<li>First Trust Latin America AlphaDEX Fund (FLN)</li>
<li>First Trust South Korea AlphaDEX Fund (FKO)</li>
<li>First Trust Mid Cap Growth AlphaDEX Fund (FNY)</li>
<li>First Trust Mid Cap Value AlphaDEX Fund (FNK)</li>
<li>First Trust Small Cap Growth AlphaDEX Fund (FYC)</li>
<li>First Trust Small Cap Value AlphaDEX Fund (FYT)</li>
<li>iPath Pure Beta Agriculture ETN (DIRT) (<a href="http://investwithanedge.com/barclays-offers-new-variation-of-19-existing-commodity-etns" target="_blank">Barclays Offers New Variation of 19 Existing Commodity ETNs</a>)</li>
<li>iPath Pure Beta Aluminum ETN (FOIL)</li>
<li>iPath Pure Beta Broad Commodity ETN (BCM)</li>
<li>iPath Pure Beta Cocoa ETN (CHOC)</li>
<li>iPath Pure Beta Coffee ETN (CAFE)</li>
<li>iPath Pure Beta Copper ETN (CUPM)</li>
<li>iPath Pure Beta Cotton ETN (CTNN)</li>
<li>iPath Pure Beta Crude Oil ETN (OLEM)</li>
<li>iPath Pure Beta Energy ETN (ONG)</li>
<li>iPath Pure Beta Grains ETN (WEET)</li>
<li>iPath Pure Beta Industrial Metals ETN (HEVY)</li>
<li>iPath Pure Beta Lead ETN (LEDD)</li>
<li>iPath Pure Beta Livestock ETN (LSTK)</li>
<li>iPath Pure Beta Nickel ETN (NINI)</li>
<li>iPath Pure Beta Precious Metals ETN (BLNG)</li>
<li>iPath Pure Beta S&amp;P GSCI-Weighted ETN (SBV)</li>
<li>iPath Pure Beta Softs ETN (GRWN)</li>
<li>iPath Pure Beta Sugar ETN (SGAR)</li>
<li>iPath Seasonal Natural Gas ETN (DCNG)</li>
<li>Market Vectors Investment Grade Floating Rate ETF (<a class="ticker" href="/stock/fltr#">FLTR</a>) (<a href="http://investwithanedge.com/fltr-investment-grade-floating-rate-etf" target="_blank">Investment Grade Floating Rate ETF</a>)</li>
<li>UBS E-TRACS Wells Fargo Business Development Company ETN (BDCS) (<a href="http://investwithanedge.com/exposure-to-business-development-companies-now-available-via-bdcs-etn" target="_blank">Exposure To Business Development Companies Now Available Via ETN</a>)</li>
</ol>
Product closures/delistings in April:
none
Product changes in April:
<ol>
<li>Global X FTSE Colombia 20 ETF (<a class="ticker" href="/stock/gxg#">GXG</a>) underwent a 2-for-1 split effective April 11.</li>
<li>One Fund ETF (ONEF) was renamed Russell Equity ETF (ONEF) effective 4/15/11.</li>
<li>iShares FTSE NAREIT Industrial/Office Capped Index Fund changed its ticker symbol from FIO to FNIO effective 4/28/11.</li>
</ol>
Announced Product Changes for Coming Months:
<ol>
<li>Grail American Beacon Large Cap Value (<a class="ticker" href="/stock/gvt#">GVT</a>) becomes Columbia Concentrated Large Cap Value Strategy Fund (<a class="ticker" href="/stock/gvt#">GVT</a>) effective 5/2/11.  Columbia bought Grail and will replace Grail as the manager of this actively-managed ETF.</li>
<li>SPDR DJ Global Titans ETF (<a class="ticker" href="/stock/dgt#">DGT</a>) changes its name to SPDR Global Dow ETF (<a class="ticker" href="/stock/dgt#">DGT</a>) and will follow a new index effective 5/2/11.</li>
<li>Barclays ETN+ Short D Leveraged Exchange Traded Notes Linked to the Inverse Performance of the S&amp;P 500 Total Return Index (BXDD) have been called for redemption with <a href="http://investwithanedge.com/bxdd-bites-the-dust" target="_blank">5/4/11 being the last day of trading</a>.</li>
<li>PowerShares will change the underlying indexes for its suite of 10 style-box ETFs from Intellidex Dynamic to FTSE RAFI Fundamental Pure Style Indexes effective 6/16/11.  The fund names and ticker symbols will also change.  Additional information is available in the <a href="http://www.invescopowershares.com/pdf/P-PS-PRO-5.pdf" target="_blank">prospectus supplement</a> (pdf).</li>
</ol>
Previous monthly ETF statistics reports are available <a href="http://investwithanedge.com/category/etf-statistics" target="_blank">here</a>.
Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
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GERJ

Columbiancentrated Large Cap Value Strategy Fund

RSXJ

WSTE

ETF Stats for April 2011: 1,216 and Counting

A niche fixed-income market is opening wider with Tuesday's (4/26/11) listing of Market Vectors Investment Grade Floating Rate ETF (<a class="ticker" href="/stock/fltr#">FLTR</a>).  The product developers at Van Eck's Market Vectors ETF shop have a keen sense of timing; obviously they think demand exists for something like FLTR.  Now we will see if they have another hit on their hands.
The FLTR launch comes less than two months after that of <a href="http://investwithanedge.com/bkln-the-first-senior-loan-etf" target="_blank">PowerShares Senior Loan Portfolio (<a class="ticker" href="/stock/bkln#">BKLN</a>)</a>.  Both specialize in “floating rate” debt instruments.  These are packaged bank loans with periodically resetting interest rates, usually tied to a benchmark like LIBOR.   The reset feature means that floating-rate paper has very little exposure to the negative impact of rising interest rates.  Returns are driven primarily by credit risk.
FLTR taps into the upper part of the floating-rate market by holding only debt rated at “investment grade” or higher by one of the primary rating agencies (S&amp;P, Fitch or Moody's).  This is its primary distinction from BKLN – which despite the word “senior” in its name actually owns the floating-rate equivalent of junk bonds.  Since the 2008 financial crisis credit ratings are less trustworthy than they used to be, however, so reality may turn out to be a little different.
Nonetheless, FLTR will probably appeal to investors who want above-average yield and are concerned that inflation will drive interest rates up and Treasury bond values down.  Institutions will perceive it as less of a risk than BKLN, and the custom index that FLTR will try to replicate is designed to offer good liquidity.
FLTR comes out with a gross expense ratio of 0.49% and net expense ratio after fee waivers of 0.19%.  Average maturity of the portfolio is short at just 2.75 years.  The coupon rate for the 24 holdings is presently 0.93%, although the fund's yield is expected to be lower.  The floating rate aspect keeps the average modified duration extremely low at just 0.1 years.
For more information, visit the <a href="http://www.vaneck.com/funds/FLTR.aspx" target="_blank">FLTR page</a>at Van Eck's web site, where you can view a <a href="http://www.vaneck.com/WorkArea/linkit.aspx?LinkIdentifier=id&amp;ItemID=2147485225" target="_blank">fact sheet</a>(pdf), <a href="http://www.vanecketfs.com/WorkArea/linkit.aspx?LinkIdentifier=id&amp;ItemID=2147485226" target="_blank">investment case</a>(pdf), and <a href="http://www.vaneck.com/WorkArea/linkit.aspx?LinkIdentifier=id&amp;ItemID=2147485227" target="_blank">prospectus</a>(pdf). 
Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
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FLTR: Investment Grade Floating Rate ETF

Van Eck, the parent company of Market Vectors, the sixth-largest U.S. ETF issuer, has introduced the Investment Grade Floating Rate ETF (NYSE: <a class="ticker" href="/stock/fltr#NYSE">FLTR</a>), a fixed income ETF designed to track the Market Vectors Investment Grade Floating Rate Index that consists of dollar-denominated floating rate notes.

To be included in the index, the notes must have ratings of BBB-/Baa3 or better from one of the three top ratings agencies. Floating rate securities are different from traditional bonds in that their interest rates are reset periodically and are tied to a corresponding interest rate index. The securities were first introduced in the 1970s.

Floaters can offer enhanced yields when compared to a strategy of rolling over comparably rated short-term instruments and paying the related costs associated with each transaction, according to Investinginbonds.com.

The index FLTR will track is currently home to almost 200 securities. The longest third of FLTR's portfolio by maturity is scaled to represent about two thirds of total assets, with shorter maturity issues scaled to represent the remaining third, ETFdb.com reported.

Market Vectors issues over 30 ETFs, including seven bond funds, with over $22 billion in assets under management.

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VanEck ETF Trust VanEck IG Floating Rate ETF

News

Latest news for VanEck ETF Trust VanEck IG Floating Rate ETF (ARCA:FLTR)

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