The ETF Sequels Outperforming the Originals

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March 28 (Bloomberg) –- Bloomberg’s Eric Balchunas discusses the ETF sequels that are outperforming the originals. He speaks with Olivia Sterns on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

That have performed as well as the godfather.

If a fund is doing well, why invest in a sequel fund?

Udf officials are scrambling to come up with new products.

When they had seen is the industry matures if they have a product, why not come up with a sequel to it but put a new spin on it?

For example, one smash hit is the spdr high-yield short-term bond etf.

The difference here is it is junk bonds and short-term.

It is a big hit because there is a demand for people concerned about rising rates.

This has a duration half of jnk, and has returned about the same over two years.

$2.5 billion.

It is spurred by a jump trilogy.

Ijnk, the spider international fund.

They are expanding like crazy, just like movies.

And offspring funds can even do better than the parent fund.

You also have a second dividend etf fund.

Idog, the sequel to sdog.

They look for the highest dividend paying stocks in each sector and equal weight every sector.

Every sector has a 10% weighting.

The reason why people like both products is because one of the raps on dividend etf in general was that they are very heavy on the utility sector or one or two sectors.

This gives you diversification across all sectors and our all performing.

The international one is actually beating the u.s. one.

Another case where this is happening, vanguard has a bond etf.

The sequel is new.

The one it is proceeding bnd, is the biggest one, $20 billion.

The sequel gives you international exposure.

It is so cheap it gives you 2300 international bonds in 50 countries for an expense ratio of .02%, making it the cheapest by far.

We have to leave it there.

Back on the markets in 30 minutes.


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