Jen Ryan in the Wall Street Journal reports on the upcoming launch of yet another technology sector ETF, the ArcaEx Tech 100 fund (AXT). While there are some differences with the other technology ETFs, it is entering an already crowded marketplace.
There are at least 18 technology ETFs listed in the U.S. so “for someone who doesn’t have a name in the market, it will be tough unless [they’re launching] something unique,” said Paul Mazzilli, an ETF strategist at Morgan Stanley. He said Archipelago’s ETF “has a chance, but not a big one.”
John Spence at Marketwatch.com weighs in on the somewhat unique price-weighting scheme the new ETF will use. In addition the fund will have some 25% in healthcare, outside of the normal technology landscape.
This is also bad news for the North Track ArcaEx Tech 100 Index fund (PPTIX) which already tracks this technology index. Karen Dolan at Morningstar.com notes that the new ETF has a decided price advantage (0.50% vs. 1.08%) over its open-end competition.
For those interested in fundamental research on sector ETFs, take a look at the Select Sector SPDRs site. There they have quantitative fundamental research from AltaVista Independent Research available for download free. Included are earning estimates, valuation data, and other fund level data. Worth a look.
Speaking of Select Sector SPDRs, Morningstar.com is reporting that StreetTracks has filed a preliminary prospectus for three new sector funds. They include Biotech, Homebuilder and Semiconductor funds.
There seems to be no limit to the number of equity related ETFs, but roadblocks remain for non-equity ETFs. You can read more about this in an previous post.