FlexShares, the exchange traded fund unit of Northern Trust, launched two new fund products based on the multi-factor model approach that will provide a heavier emphasis on international small-caps and value stocks.

FlexShares Morningstar Developed Markets Ex-US Factor Tilt Index Fund (TLTD) and the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE) began trading.

The factor-based or smart beta strategy select securities based on specific characteristics.

The underlying Morningstar Developed Markets ex-US Factor Tilt Index and the Morningstar Emerging Markets Factor Tilt Index both assign a greater allocation toward small-cap and value stocks and a lesser weighting toward large or growth stocks, compared to traditional market-cap indices.

"Think of it as pouring out exposure into a series of glasses," Shundrawn Thomas, managing director and global head of ETFs at Northern Trust, said in an Investor Advisor article. "One of those glasses is marked 'small-cap' and one is marked 'value'

By Daniela Pylypczak

The coming of the new year hasn’t slowed down the rapid pace of the ETF industry, with January showing high levels of activity on the product development front. The first month of the year witnessed the debut of a number of first-to-market products as well as several long-anticipated funds from both large and small issuers:

New ETFs

New exchange-traded products that began trading in January include:

• Direxion introduced three new volatility ETFs that offer dynamic exposure to U.S. and Latin American equity markets by shifting allocations between stocks and cash based on market volatility. The Direxion S&P 500 RC Volatility Response Shares (VSPY) consists of exposure to T-bills and large cap U.S. stocks. The second U.S. ETF, VSPR, offers exposure to

This past year was the most active ever for the exchange traded industry in terms of product development; the launch of more than 300 new products shattered the record set in 2010. And innovation continues to run high in the industry; the creativity of issuers is still impressive, as many of the ETFs that have debuted over the last year have offered access to new asset classes and strategies. There are no doubt still stones to be overturned, and many new opportunities in the ETF space.

Yesterday, we profiled a number of the new additions to the ETF lineup in 2011 that had been a big hit with investors; nearly 20 of the exchange-traded products launched in 2011 have already accumulated more than $1 billion in assets. Today, we’ll take a look at ten ETFs that debuted in 2011 that haven’t been quite as successful pulling in assets, but that