ETF Trends
ETF Trends

PowerShares has filed for an exchange traded fund (ETF) that would invest in speculative bank loans, while a new VIX exchange traded note (ETN) could soon hit the scene.

The provider filed papers with the Securities and Exchange Commission to launch the PowerShares S&P Bank Loan Portfolio. The ETF will track the S&P/LSTA U.S. Leveraged Loan 100 Index through representative sampling, reports Cinthia Murphy for Index Universe.

The ETF will track the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads and interest payments, and the index will rebalance semi annually. Leveraged loans are those rated below investment-grade or are unrated. [New ETFs: Hedge Fund Replication, Treasuries.]

Murray Coleman for Barron’s reports that Citigroup has also filed with the SEC for an ETN that will follow a volatility index rivaling those offered by Barclays.

The new C-Tracks Citi Volatility Index ETN is designed to take long positions on a portfolio of third- and fourth- month VIX futures contracts, similar to iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX). But the new C-Tracks will leverage its holdings by a factor of 200%. It’ll also have the flexibility to take short positions in the S&P 500 Total Return Index.  [VIX ETNs: Calm Before the Storm?]

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.