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High risk also brings potential for high reward, play this risk with ETFs

riskassessmentOur proprietary seasonality charts point to emerging markets as the most likely field from which to net profits in June. True, other fields offer opportunities, from inflation-protected bonds where I like the iShares Barclays Tips Bond exchange-traded fund (TIP) , to continued strength among mid-and small-cap stocks both here and abroad. But when I look at our sector specific charts, it's easy to see the standout: energy-related themes -- coal via the Market Vectors Coal ETF (KOL)  and oil, best barreled in the United States 12-Month Oil Fund. (USL)  From this view, I can point to another with my eyes closed: emerging markets.
ETF BASIC NEWS June 1, 2009 11:28am

Travelers taking Citigroup’s spot in the Dow industrials

citigroupAnother chapter in the continuing decline of Citigroup Inc., once the nation's largest bank, was written Monday as the company was ousted from the Dow Jones Industrial Average, to be replaced by insurer Travelers Cos. -- a company with which Citigroup entered an ill-fated marriage a decade ago. Cisco Systems (CSCO)  and Travelers (TRV)  will replace General Motors Corp. (GM)  and Citigroup on the Dow Jones Industrial Average, Dow Jones Indexes said.
ETF BASIC NEWS June 1, 2009 10:51am

State Street to Rebalance Eight SPDR(R) Exchange Traded Funds In Accordance with New S&P Procedures

statestreetState Street Global Advisors (SSgA), the investment management arm of State Street Corporation (NYSE: STT), today announced it will rebalance the holdings of eight SPDR(R) exchange traded funds that seek to track S&P Select Industry Indices on June 19, 2009 in accordance with the new procedural changes implemented by Standard & Poor's. Beginning with the June 2009 rebalancing of the S&P Select Industry Indices, Standard & Poor's will rebalance the indices to equal weights using closing prices on the second Friday of the rebalancing month (i.e. the stock price reference date is one week prior to the rebalancing date effective date). The rebalancing effective date will remain after the close of the third Friday of the month.
ETF BASIC NEWS June 1, 2009 10:36am

Vanguard’s Bid For iShares Raises Questions

raises-questionsReports surfaced Sunday in London that the biggest U.S.-based index mutual fund company is tossing its hat into the ring to purchase the leading sponsor of exchange-traded funds. The Sunday Telegraph is reporting that the Vanguard Group, which virtually created the modern indexing marketplace for individual investors, has made a bid in the neighborhood of $5 billion to buy Barclays Global Investors' iShares business. The combination would create an ETF industry juggernaut with some $311.9 billion in total assets. Such a figure is based on estimated ETF asset levels for both Vanguard and BGI's iShares lineup at the end of April. It would easily bolt Vanguard, now No. 3, past current No. 2 State Street Global Advisors.
ETF BASIC NEWS June 1, 2009 10:19am

Mapping Indexes (ETF’S)

mappingIndex investing continues to grow in size and scope. The Morningstar Principia database shows that about 15% of distinct portfolios are index-based products. These funds are either open-end index funds or exchange-traded products (ETPs) that track indexes. Together, index-based funds represent more than 20% of the value of all funds in the database. As this segment of the market grows, so does the complexity of the indexes. There are now hundreds of sophisticated indexes whose construction and purpose bears little resemblance to traditional benchmarks such as the Russell 3000. These new methods include quantitative security selection and alternative weighting strategies. Today's advisors can best serve their clients with a working knowledge of the various index methodologies. Unfortunately, this is no easy task. There are simply too many indexes and strategies available. We need new tools to make the analysis of index-based products faster and easier.
ETF BASIC NEWS June 1, 2009 10:12am

ETF Stats For May 2009

statsThe month of May brought the largest monthly decline ever in the number of US-listed ETFs and ETNs.  Active listings changed by -14 after averaging more than +17 new products per month during the past three calendar years.  Additionally, the six-month moving average of net new listings turned negative for the first time in history. There were five new ETFs introduced during the month and 19 closures.  The total number of listed products at the end of May stands at 830 (745 ETFs and 85 ETNs), the lowest level since last October.  The quantity is down 15 from the start of the year and down 29 from the peak level of 859 established in early February prior to the closure of the Northern Trust NETS family of ETFs.
ETF BASIC NEWS June 1, 2009 9:56am

Is new book’s ETF-based timing system better than buy and hold?

guessingWhen investors seek to limit damage from bear markets, their approach generally is based on a gut feeling or prediction. Such short-term moves are known as "market timing." But emotional responses are counterproductive and market forecasts are a dime a dozen. Which is about what they're worth. So, if the market can't be timed - and if a buy-and-hold approach doesn't work, either - what's an investor to do?
ETF BASIC NEWS June 1, 2009 8:47am

Which ETF Sectors Are All the Rage?

rageSINCE SEPTEMBER, DEBORAH FUHR has occupied one of the loftiest perches in the world of exchange-traded funds. As managing director and global head of ETF research at Barclays Global Investors, one of the world's leading ETF shops, she is considered one of the top analysts in her field. She talked with Barrons.com by phone recently about her industry and which ETFs are sparking investor interest these days. Q: You joined Barclay's last September, around the time that the financial world as we know it changed. What has it been like in the industry during this period?
ETF BASIC NEWS June 1, 2009 8:38am

ETFs Profit From Rising Treasury Bond Yields

treasurybondLeveraged exchange-traded funds that short U.S. Treasury bonds got a nice pop last week from a jump in yields, and the ETFs could see further gains if investors lose their thirst for government-backed debt. In a dramatic sell-off Wednesday in government bonds, yields on 10-year notes surged above 3.7% at one point to their highest levels since November. That upheaval in the bond markets, which some traders said was exacerbated by mortgage-related selling, ignited fears that inflation is on the horizon as a result of the government's efforts revive the ailing financial system.
NYSE:GLD June 1, 2009 8:31am

New Pimco Bond ETF Marks Shift In Sector

shifterIn a move that could shake up the clubby business of exchange-traded funds, bond giant Pacific Investment Management Co. is poised to launch its first ETF early this week. The move by Pimco, a unit of Allianz SE co-founded by bond guru Bill Gross, marks the first time in years such a high-profile mutual-fund company has tried to muscle its way into the ETF business, long dominated by a handful of large-but-lesser-known asset managers that specialize in indexing, such as Barclays PLC and State Street Corp. ETFs, baskets of stocks or bonds that trade on an exchange, have been rapidly gaining popularity with investors, and took in tens of billions of dollars in 2008. But many big-name mutual-fund companies have shrugged off ETFs because these offerings were traditionally just index funds with low management fees, which ensured that profit margins were measly.
ETF BASIC NEWS June 1, 2009 1:00am

SPDR University weds learning with marketing

statestreetIn April 2008, State Street’s intermediary business group, which is the investment management arm of State Street Corporation, launched SPDR University—an agile learning portal exclusively for financial advisors. The intermediary business group is responsible for distributing its SPDR (pronounced “spider”) Exchange Traded Funds (ETFs) and additional products via financial advisors, brokers, and other investment professionals. While State Street is one of the world’s largest ETF providers, competition for advisor mindshare—and assets—is fierce. That’s why State Street made a strategic decision to offer its prospects and customers considerably more than just investment product and performance data.
ETF BASIC NEWS May 31, 2009 5:03pm

Plain vanilla ETFs come back into fashion

plainSimplicity was a strong selling point of the first exchange traded funds offered in the early 1990s. Issuers bought the shares that made up the underlying index and sold them on to investors in the form of a single easily traded security. But as the range of assets covered by ETFs has expanded it has become more difficult to assemble the underlying portfolio. Issuers have found a way round this difficulty by means of swaps, exchanging a perhaps less than perfect bunch of assets for a swap that precisely mirrored the relevant index.
ETF BASIC NEWS May 31, 2009 4:53pm

Do Inverse ETFs Do What They’re Supposed To?

inverseHow bad are inverse exchange-traded funds (ETFs) at returning the inverse movements of the indexes they track? Frank Elston and Doug Choi tell us in a paper published in the Proceedings of the Academy of Accounting and Financial Studies (Volume 14, Number 1: 2009). It turns out out they can be so bad in replicating implied returns that Elston and Choi conclude investors would be better off in many instances shorting the long or double-long ETFs instead.
NYSE:DOG May 31, 2009 8:29am

Active ETFs need time to catch on, some say

etfActively managed exchange traded funds are finally starting to trickle into the market. But for the trickle to become a flood, active ETFs will have to overcome a number of obstacles, not the least of which is the establishment of desirable performance. “Would people want active management that comes with the tax advantages, transparency and liquidity of an ETF?” asked Scott Burns, the director of ETF analysis at Morningstar Inc. of Chicago and editor of Morningstar ETFInvestor, a monthly newsletter. “The answer is yes, but if it turns into a tradeoff for returns, the answer is no.” It is a challenge, but some asset managers think that they are up to it. The Grail American Beacon Large Cap Value ETF (GVT) from Grail Advisors LLC of San Francisco, which began trading on May 4, allows portfolio managers unrestricted trading. Full Story: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090531/REG/305319965/1025/ETF
ETF BASIC NEWS May 31, 2009 8:01am

Coffee Sweeter Than Sugar, Think Agriculture ETF’s

cow-mooWell, here we are on the final trading day of May.  Taking account for the month, the real story's been agriculture in its manifest forms. For investors at the sector level, the 9.8% gain scored by the PowerShares DB Agriculture Fund (NYSE Arca: DBA) in May could portend a broader resurgence in commodities. A more vigorous equity market breeze blew at the back of the Market Vectors Agribusiness ETF (NYSE Arca: MOO), however, pushing the fund 17.8% higher for the month.
ETF BASIC NEWS May 31, 2009 4:00am

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