Community Banks ETF Set To Launch July 1
Source: http://www.indexuniverse.com/sections/newsinfocus/6107-etf-focused-on-community-banks-set-to-launch-july-1st.html?Itemid=3&utm_source=straightstocks.com&utm_medium=sidebar&utm_campaign=rssPosted on Friday, June 26th, 2009 | In Exchange Traded Funds, Market Commentary
New Community Bank ETF sets July 1 launch date.
First Trust Advisors on Friday announced plans to launch its new exchange-traded fund focused on community banks on July 1.
The firm had previously filed for Securities and Exchange Commission approval to offer the fund. (See related story here.)
But the press splash is the company’s first comments after completing the required regulatory process. It also provided full details of the ticker and made official the new ETF’s name: The First Trust Nasdaq ABA Community Bank Fund (NASDAQ: QABA).
First Trust will serve as the investment adviser for the fund. It will come with an expense ratio of 0.60%, according to the ETF’s prospectus.
Community banks follow a different economic paradigm than the New York-centered financial giants; they’re even quite different from the regional banking companies captured by ETFs such as the SPDR KBW Regional Banking ETF (NYSE Arca: KRE). When well-run, they tend to be steady, low-risk performers, with limited upside but similarly limited volatility.
“There has been little distinction made between the stress-tested megabanks and the nearly 8,000 community banks throughout the country,” said Robert Carey, First Trust’s chief investment officer, in a statement.
“Because these banks tend to practice more conservative banking strategies and have tended to stay away from subprime lending and exotic financial instruments, they have recently shown higher capital levels and healthier balances sheets as compared to larger financial institutions.”
As reported previously by IU.com, the ETF’s underlying index has a variety of exclusion criteria designed to maintain a pure-play focus on the community banking sector. Companies entering the index, for example, cannot be among the 50 largest banks or thrifts based on asset size; cannot focus on international servicing; cannot specialize in credit cards; etc. In other words, they are supposed to be local banks.
Last 5 posts by IndexUniverse Staff
- Rethinking Leverage - November 24th, 2009
- Will UNL Beat UNG? - November 19th, 2009
- A Real Hedge Fund ETF? - November 17th, 2009
- ProShares’ Positive Tax Surprise? - November 17th, 2009
- Better Than Cash? - November 17th, 2009
advisors, Chief Investment Officer, Community Bank ETF, community banking sector;, conservative banking strategies, Exchange Traded Funds, First Trust Nasdaq ABA Community Bank Fund, index universe, investment adviser for the fund, Market Commentary, New York, Robert Carey, Securities And Exchange Commission, SPDR KBW Regional Banking ETF;, The First Trust Nasdaq ABA Community Bank
 About IndexUniverse Staff (http://indexuniverse.com)
IndexUniverse encompasses the world of indexing and beyond. Our website and related subsites cover product and market developments related to index funds, exchange-traded funds (ETFs), index derivatives (futures / options / swaps), and the sophisticated investment strategies which use these financial tools. Our goal is to provide the industry's best news, columns, research, and features about the dynamic field of index-based investing and trading. Industry professionals, individual investors, business/finance students and academic researchers will find various features targeting their interests and needs. We also provide valuable tools and data to assess markets and investment products, and specialized discussion boards for our registered members to exchange cutting-edge ideas and market views. We aim to be educational, thought-provoking, and most importantly, rigorously independent in our perspective. The development of IndexUniverse was a global effort, originally led by Steven Schoenfeld and Jim Wiandt, supported by John Spence and a diverse team in the U.S., Europe and Latin America, and enhanced by editorial contributors from around the world. The site is now managed solely by Jim Wiandt and the global Index Publications LLC team. The site was originally started by Steven as a data and information complement to his book, Active Index Investing, published by Wiley Finance in July 2004. As he recognized the need and potential for such a resource, in August 2003, Steven partnered with Jim, who as editor of The Journal of Indexes similarly recognized the industry's need for timely, useful and independent information on products and markets. |
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.