(original story March 2009) The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said it held a record 1,041.53 tonnes of bullion as of March 12, replacing Switzerland as the world’s sixth-largest holder of gold.

SPDR’s record stake, up 3.36 tonnes or 0.3 percent from the previous day, topped the 1,040.1 tonnes of gold listed as held
by Switzerland in December, the latest data from the World Gold Council showed. Switzerland ranked as the world’s sxth-biggest official gold holder after the United States, Germany, International Monetary Fund, France and Italy.

“The most significant factor for the precious market this year is that long-term, stable funds have been entering the ETF
in a systemic way,” said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.

“Driven by worries about currencies, among others, ETF’s increases have become symbolic of a market rise, and the market
is hoping that the ETF’s resumed climb will help pull up prices.”

Full Story: http://af.reuters.com/article/commoditiesNews/idAFT14717920090313

ETF BASIC NEWS, NYSE:GLD

No one’s talking about one of the most interesting developments in real estate this year.

And it’s not the plummeting home prices, or the spike in foreclosures.

Your home could lose half its value this year – since January 2007, countless have. And like many Americans who’ve seen their biggest asset depreciate, you’ve been completely defenseless, unable to stop it.

But that’s about to change.

I’m not suggesting the freefall in prices will stop. The latest reading of the S&P/Case-Shiller Composite 10 House Price Index makes it impossible to advance such an argument. (It’s dropped for the twenty-fifth consecutive month.) Instead, I’m telling you we’ll finally have a way to profit from retreating prices.

In other words, we can finally hedge home value in one simple step – through the use of exchange traded funds or ETFs.

Let me explain how…

A Rare IPO for Two ETFs

After five years in the planning stage, later this month, a pair of ETFs – the MacroShares Major Metro Housing Up (NYSE: UMM) and MacroShares Major Metro Housing Down (NYSE: DMM) – will IPO.

Full Story: http://jutiagroup.com/2009/04/16/hedging-home-value-with-etfs-how-to-buy-sell-a-home-on-the-nyse/

ETF BASIC NEWS

By Ian Salisbury OF DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–When Barclays PLC (BCS) sold its prized iShares exchange-traded fund business earlier this month, much of the speculation was about whether the deal would include revenue from a lucrative side business – lending out stocks owned by iShares funds.

In fact, that aspect of iShares’ business wasn’t really Barclays’ to sell. Profits from lending out shares of the ETFs belong to the funds’ shareholders, not to Barclays or to CVC Capital Partners, the proposed buyer of iShares.

Borrowed shares are typically used by short sellers, such as hedge funds, who pay a fee for the chance to sell the shares on the open market and, with luck, repurchase them later at a lower price.

Barclays does, in fact, earn money from iShares’ securities lending, but that’s because it received a contract for the work from iShares’ board, a group of trustees meant to look out for fund shareholders’ interests.

While Barclays could in theory sell the separate business unit that holds the contract and which also handles securities lending for Barclays’ larger institutional money management unit, Barclays can’t promise CVC that the business unit will keep its ties with iShares.

“There are a lot of people that do securities lending, and the iShares board could hire somebody else,” says John McGuire, a partner at law firm Morgan Lewis in Washington, who specializes in mutual fund regulations.

Of course, Barclays’ double role – which the confusion around its sale serves to highlight – could raise questions about self-dealing.

Barclays’ commission on iShares’ securities lending revenue – 50% – appears hefty. But with the market for securities lending basically opaque, it’s difficult to judge whether iShares holders are really getting a fair deal or not.

Full Story: http://online.wsj.com/article/BT-CO-20090416-713254.html

ETF BASIC NEWS

In a follow up interview with Fidelity Independent Adviser, released today, ETF Market Opportunity Fund (ETFOX) manager discusses recent changes to his portfolio and his reaction to recent market events.

Since its selection as Fidelity Independent Adviser’s Best Fund for Second Quarter 2009, Paul Frank’s ETF Market Opportunity Fund (ETFOX) has continued to beat the S&P 500. While Frank’s ETF based mutual fund has grown dramatically, his methodology has remained consistent, and he continues to attribute his success to both the transparency of ETFs and the fundamental oversight that a mutual fund provides.

Q: How have recent market conditions, including the March rally, impacted the composition of your portfolio?

A: ETFOX is designed to react to market movement, so several of my positions have changed along with the market in recent weeks. My model led me to trim my exposure to fixed income, and while I dropped the Proshares UltraShort 20+ Year Treasury Fund (TBT) in March, I began buying shares again on April 14. At the beginning of the March rally, I added large-value ETFs to the fund but have since moved to small cap growth. Technology ETFs have performed well, and I have added Vanguard Information Technology ETF (VGT) to the fund while increasing my position in iShares S&P North American Tech-Semiconductors (IGW). The core of ETFOX is still large growth funds.

Full Story: http://www.pr-inside.com/etf-mutual-fund-etfox-adjusts-portfolio-r1187173.htm

ETF BASIC NEWS

After 6 weeks of smooth sailing, options traders are anticipating volatility in emerging-market exchange-traded funds.

Activity spiked yesterday in the MSCI Brazil Index (EWZ) and MSCI Emerging Markets Index (EEM), which both witnessed above-average volume. In 1 of the session’s largest trades, an investor purchased 33,000 contracts of EEM May 28 puts for $1.69 and an equal number of May 28 calls for $1.49.

This so-called straddle trade will be profitable if EEM falls below $24.82, or rises above $31.18. EEM rose 1.45% yesterday to close at $28.07. (See optionMONSTER’s Education section.)

Another large transaction showed how 1 trader bet on a limited decline at very low cost. This strategy bought 5,000 May 26 puts in EEM for $0.96 and sold 10,000 May 24 puts at an average price of $0.465. By selling more puts at the lower strike, the cost was reduced to just $15,000 before commissions.

Full Story:  http://www.minyanville.com/articles/markets-EEM-SP500-efa-INDEX-Japan/index/a/22220/from/yahoo

NYSE:EEM, NYSE:EWZ

With market volatility still a concern and Treasury yields relatively low, State Street Global Advisors has filed to launch a new municipal bond exchange-traded fund.

The SPDR S&P Municipal VRDO ETF will track an index of variable rate demand obligations. Those are debt issues by states, local governments and other agencies which pay interest exempt from federal income taxes.

VRDO issuing volume skyrocketed last year after the collapse of the auction-rate securities market. Those types of fixed-income issues are similar to VRDOs since they each have long-term maturities but reset frequently, giving both types of securities short-term interest rate features. But VRDOs are considered more flexible since they allow put options as rates change.

Full Story: http://www.indexuniverse.com/sections/newsinfocus/5696-ssga-plans-vrdo-muni-bond-etf.html

ETF BASIC NEWS

* Gold little changed after weak China GDP data

* SPDR Gold Trust GLD holdings stay at record high (Updates prices, releads, adds quotes)

By Risa Maeda

 TOKYO, April 16 (Reuters) – Gold was little changed around $890 per ounce on Thursday, torn between weakening stock markets and a lack of strong physical buying. 

Bullion earlier got a boost when Asian stocks pared gains as investors cash in profits after China posted its slowest quarterly growth ever. 

But European stocks futures indicate a higher opening later in the day, which may keep gold traders from making bullish bets. [ID:nLG653897] 

“Investors seem to be closely watching developments in stock markets for any further clues. It isn’t clear whether it’s a bear market rally or a fresh rally in the beginning,” said Pradeep Unni, trader at Richcomm Global Services. 

Gold is still stuck in a range, with $885 on the downside and $900 on the higher side, he added. 

Spot gold <XAU=> stood at $891.20 per ounce at 0625 GMT, up 0.1 percent from New York’s notional close of $890.60. 

It last closed above $900 on April 2 before hitting a 10-week low of $864.30 last week.

Full Story: http://www.reuters.com/article/goldMktRpt/idUSSP11262520090416

ETF BASIC NEWS, NYSE:GLD

NEW YORK (MarketWatch) — Financial results reported by J.P. Morgan Chase & Co. that topped analyst estimates kept bank stocks’ recent rally running Thursday.

The KBW Banking ETF (BKX), the exchange-traded fund that acts as a benchmark for the sector, rose 1.4% in early action and helped the broader financials post a roughly 1% gain.

J.P. Morgan Chase’s first-quarter profit slipped 10% from the year ago period as credit losses and provisions rose, but the blue-chip bank  (JPM) posted a profit in stock and bond trading — suggesting that markets, particularly the credit market, are coming back to life, albeit with massive government help

Full Story: http://www.marketwatch.com/news/story/story.aspx?guid=%7B8E230FCA%2DB717%2D4919%2D9C6D%2D07BCAF2A967F%7D&siteid=rss

ETF BASIC NEWS

State Street Global Advisors (SSgA), the investment management arm of State Street Corporation STT, today announced that the SPDR^® Barclays Capital Convertible Bond ETF (Symbol: CWB) began trading on the NYSE Arca on April 16, 2009. It is the first convertible bond ETF available to U.S. investors.

The SPDR Barclays Capital Convertible Bond ETF seeks to track the price and yield performance of the Barclays Capital U.S. Convertible Bond >$500MM Index (the “Convertible Index”). Convertible bonds are bonds that can be exchanged, at the option of the holder, for a specific number of shares of the issuer’s preferred or common stock. As of December 31, 2008, 156 issues were included in the Convertible Index. The Fund’s expense ratio is 0.40 percent.

“Offering a unique risk-return profile that combines the yield of corporate bonds with the capital appreciation potential of stocks, convertible bond exposure is experiencing increased demand as investors look to improve the diversification of their portfolios,” said James Ross, senior managing director at State Street Global Advisors. “As the first ETF to provide exposure to the benefits of convertible bonds, the SPDR Barclays Capital Convertible Bond ETF underscores our commitment to develop innovative ETFs for investors seeking precise access to all segments of the market.”

ETF BASIC NEWS

The United States’ first platinum ETF is in registration. Ahead of the fund’s launch are some warnings for investors about the popular metal.

Investors who are bullish on platinum now have an ETF in the works that could create demand for the metal, as each share must have a corresponding quantity of the precious metal behind it, Liam Denning for The Wall Street Journal explains. The filing for the U.S. fund was made by ETF Securities, which has a platinum fund in London right now.

Since the prospective ETF first filed, platinum is up 5%, and has been up 51% since its November low. The metals had been suffering, because the auto industry hit platinum where it hurts – catalytic converters for cars make up 55% of the world’s total platinum demand.

Full Story:  http://seekingalpha.com/article/131202-could-a-new-platinum-etf-send-prices-haywire

ETF BASIC NEWS

…Traditionally, health care has been viewed as a defensive sector, meaning that health care sector stocks have held up better than the overall stock market during major bear markets. The current bear market is no exception. Regardless of what the market is doing, people tend to maintain their health care spending, and profits in the sector hold. Because senior citizens account for a disproportionate share of health care expenses, Medicare guarantees a flow of revenue to the health care industry.

There are literally dozens of health care ETFs, and not all are created equal. The first group to be aware of is the broad U.S. health care sector ETFs: Health Care Sector SPDR (XLV) from State Street Global Advisors of Boston, iShares Dow Jones U.S. Healthcare Sector Index ETF (IYH) from Barclays Global Fund Advisors in San Francisco, a subsidiary of Barclays Global Investors of Jersey City, N.J., and the Vanguard Health Care ETF (VHT) from The Vanguard Group Inc. of Malvern, Pa.

The investment performance of these ETFs has been similar over the past three and five years, with the Health Care Sector SPDR just a bit weaker than the others. On the other hand, the Health Care SPDR is the most heavily traded of the three broad health care ETFs, so if you are looking to move more than 1,000 shares at a time, there is a potential advantage to using the Health Care Sector SPDR, especially if you are an active trader.

All three of these broad sector ETFs have the same principal holdings: large pharmaceutical and equipment companies such as Johnson and Johnson, Pfizer Inc., Abbott Laboratories, Merck & Co. Inc. and Amgen Inc.

However, the Vanguard Health Care ETF does not hold the same portfolio as the well-regarded Vanguard Health Care Fund (VGHCX) which, unlike the ETF, has a minimum holding period of one year.

Full Story: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090415/FREE/904159983/1025/ETF

ETF BASIC NEWS, XLV

NEW YORK–(BUSINESS WIRE)–Direxion Funds, a pioneer in providing alternative investment strategies to sophisticated investors, today began trading four new ETFs designed to track the recently debuted NYSE Current U.S. Treasury Indexes.

The four new Direxion ETFs are:

On April 2, NYSE Euronext launched the NYSE Current 2 Year U.S. Treasury Index (AXTWO); the NYSE Current 5 Year U.S. Treasury Index (AXFIV); the NYSE Current 10 Year U.S. Treasury Index (AXTEN) and the NYSE Current 30 Year U.S. Treasury Index (AXTHR).

With a collective portfolio of over 300 benchmark indices, NYSE Euronext’s Global Index Group provides design, real-time calculation and dissemination services for NYSE Euronext, third-party customized indices and Exchange Traded Products intra-day indicative values.

NYSE Current U.S. Treasury Indexes:

The four NYSE Current U.S. Treasury Indexes (AXTWO, AXFIV, AXTEN, AXTHR) are one-security fixed income indexes that consist of the most recently issued respective 2-year, 5-year, 10-year, and 30-year U.S. Treasury notes. The indexes intend to track the performance of current on-the-run U.S. government bonds. The indexes are rebalanced monthly effective after the close of trading of the last business day of the month. At that time, each index’s bond along with any relevant accrued interest and coupon payments received will be rolled into a new U.S. Treasury security if one was more recently issued during the month.

The indexes are published each day that the U.S. bond markets are open for trading from approximately 8:30 AM to 4:30 PM EST. The divisor for each index was determined to yield a benchmark value of 1000.00 at the close of trading on February 27, 2009

Full Story: http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090416005660&newsLang=en

ETF BASIC NEWS

Even though George Soros is down on the dollar it remains the world’s reserve currency. How to play the greenback.

Though the dollar has strengthened over the past six months against arch rival the euro, George Soros isn’t backing the buck. Soros, one of the world’s foremost currency traders, stated that the dollar remains vulnerable and could be replaced as the world’s reserve currency by a basket of denominations, including the euro, yen and sterling.

ETF BASIC NEWS

Short and leveraged ETFs are one of the most powerful and misunderstood tool available to investors. Just like a power tool, short and leveraged ETFs can cause a lot of damage and do a lot of good. Here’s how to use them correctly. 
 
Short ETFs have been the best performing asset class ever since the market meltdown started in October 2007. Many short ETFs gained 100% or more and singlehandedly transformed a disastrous market into a profitable one.

Nevertheless, there are pitfalls investors need to be aware of. Otherwise unwanted side effects could leave you with all the sizzle and none of the steak.

The basics

Short ETFs intend to replicate 1x, 2x or 3x the daily inverse performance of the underlying index. Leveraged (long) ETFs intend to deliver 2x or 3x the daily performance of the underlying index. The leveraged component magnifies the performance of the underlying index while the short component delivers the opposite or inverse performance of the index.

Example: (leveraged) short ETFs

To illustrate, let’s take a look at a suite of short or inverse ETFs linked to the S&P 500 Index (NYSEArca: SPY). The Short S&P 500 ProShares (NYSEArca: SH) aim to deliver the opposite daily performance of the S&P 500, the UltraShort S&P 500 ProShares (NYSEArca: SDS)  aim to deliver twice the opposite daily performance of the S&P 500 while the Direxion Large Cap Bear 3x Shares (NYSEArca: BGZ) aim to deliver triple the opposite daily performance. A 1% loss in the S&P 500 would (ideally) translate into a 1% gain for SH, a 2% gain for SDS and a 3% gain for BGZ.

Example: leveraged (long) ETFs

On the flipside, the objective of the Ultra S&P ProShares (NYSEArca: SSO) is to deliver 2x the performance of the S&P 500 while the Direxion Large Cap Bull 3x Shares (NYSEArca: BGU) aim to deliver 3x the performance of large cap stocks as represented by the Russell 1000 Index (NYSEArca: IWB), there is no triple leveraged long ETF linked to the S&P 500.

Full Story:  http://www.etfguide.com/research/156/8/3-Pitfalls-Of-Leveraged-And-Short-ETFs/

ETF BASIC NEWS

Less than a month after launching what it called the first U.S. ETF based on hedge fund strategies, Index IQ is planning to expand the category to 15 more indexes.

The company has filed papers with the Securities and Exchange Commission seeking approval of the new exchange traded funds. Like the IQ Hedge Multi-Strategy Tracker ETF (QAI), which the firm announced March 25, the new products are apparently structured as “funds of funds” that are designed to mimic the performance of certain hedge fund strategies.

Full Story: http://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/another_15_hedgefund_etfs_planned_32897.html

ETF BASIC NEWS, QAI