Retail and Institutional Investment in ETF’s

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June 12, 2009 12:05pm ETF BASIC NEWS

etfMurry Coleman, writing for Index Universe came out with a story today delving into The Blackrock merger and Retail and institutional investment in ETF’s “In the U.S., Fuhr has seen individuals – or retail investors – grow in size and market activity in terms of ETF transactions. Still, she believes institutional investors continue to comprise the majority of ETF business. Now working for BGI, Fuhr estimates that about 60% of all ETF assets are tied to those types of accounts.”


 He also touches on some of the creative uses that some institutional investors have found through ETF’s that are unique “One of those is so-called “pair trading.” That’s where someone will buy or sell more than one ETF at a time to get extremely precise market exposure. For example, if investors feel strongly that stocks will continue to rally but financials are overbought, they might short the Vanguard Financials ETF (NYSE: VFH). At the same time, they could go long through the Vanguard Total Stock Market ETF (NYSE: VTI).

“It’s a strategy that’s harder to do with mutual funds. In some ways, it’s nearly impossible,” said Nessar. “With mutual funds, even if they pair traded all on the long side, there’s just a lot more redemption fees and policies that makes it far more burdensome for an institutional investor from an administrative and regulatory view.”

The full story is two pages and we found it to be a good read

For his full story click: HERE


VANGUARD FINANCIALS ETF (PACF:VFH)
Smart Scan Chart Analysis confirms that a short term counter trend move is underway. When this action is over look for the longer term positive trend to resume. Uptrend with money management stops.Based on a pre-defined weighted trend formula for chart analysis, VFH scored +85 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
     
+10 Last Hour Close Above 5 Hour Moving Average
-15 New 3 Day Low on Wednesday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, Week Ending May 9th
+30 New 3 Month High in May
+85 Total Score
 
VANGUARD TOTAL STOCK MARKET ETF (PACF:VTI)
Smart Scan Chart Analysis continues positive longer term. Look for this market to remain firm. Strong Uptrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.

Based on a pre-defined weighted trend formula for chart analysis, VTI scored +90 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

     
-10 Last Hour Close Below 5 hour Moving Average
+15 New 3 Day High on Thursday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, Week Ending June 13th
+30 New 3 Month High in June
+90 Total Score

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