All ETF Daily News Articles

Where ETFs and Mutual Funds Collide

etf-newsAs the number of ETFs and ETF issuers grows at a breakneck pace and the focus of many products continues to narrow, it's a challenge to address methodology and liquidity when composing a portfolio. Simply comparing short-term performance among various ETF in any given sector often misses pitfalls such as liquidity and depth. Investors may find themselves paying up for a fast-moving ETF that looks good on paper but trades poorly in the open market. One response to these difficulties has been the emergence of several ETF mutual funds. While the transparency and low fees offered by ETFs have drawn some investors away from mutual funds, Paul Frank, who manages the ETF Market Opportunity Fund(ETFOX Quote), believes that the transparency of ETFs and the guidance of mutual funds can be combined effectively in a complex marketplace.
NYSE:TBT June 3, 2009 9:58am

‘Active’ ETFs: A Mixed Bag

mixed-bagOver the last several months, a number of actively-managed ETFs have been launched. These investment vehicles are essentially a hybrid of traditional mutual funds and ETFs, providing many of the benefits that have boosted the ETF industry (lower fees, greater transparency and flexibility, etc.), while implementing an active trading strategy in an attempt to outperform a market benchmark. While truly actively-managed ETFs (i.e., funds that permit managers discretion in trading) are a relatively new innovation, actively-managed ETFs have technically been around for some time, pioneered by PowerShares, which launched several funds in 2008. Not Quite Active, Not Quite Passive PowerShares' actively-managed ETFs are unlike traditional ETFs in that they do not attempt to track any type of benchmark. Rather, the composition of these funds is generally determined by a two-step process: 
NYSE:PQZ June 3, 2009 9:44am

Nine Basis Points With This ETF!

pimcoPimco's launch should be a big wake-up call to ETF investors. Has anyone noticed that Pimco, as of yesterday, is offering (now higher-yielding, lower-priced) short-term U.S. Treasuries at an expense ratio of 9 bps (0.09%)? Hougan notes that the new fund (NYSE Arca: TUZ) traded 300,000 shares on its first day, and I expect it'll be trading a lot more than that. Pimco's got BRAND in fixed income, and the forthcoming launch of six more ETFs (along with all sorts of other plans) indicates that it is just dipping its toes in the ETF market so far ... and is planning to jump into the pool in a big way (liquidity, transparency).
NYSE:TUZ June 3, 2009 9:34am

Think Your Gold ETF Really Invests In Gold? Better Check The Small Print

small-printSeveral analysts are bullish on gold right for reasons such as the threat of inflation or potential weakening of the dollar. However if you want to invest in gold ETFs be careful. Not all ETFs are created equal. According to Toni Straka from The Prudent Investor some ETFs hold paper contracts and claim no liability of the third party's management of the gold. Does your favorite precious metals exchanged traded fund (ETF) or exchange traded commodity (ETC) really invest in bullion all time? Or does it rely on paper contracts where a third party poses a counter party risk to a varying degree? Not everything marketed as a way to safely invest in precious metals truly shines under the spotlight. 
NYSE:GLD June 3, 2009 9:21am

Low-Risk Commodities Investing with ETFs

commoditiesThe new investments play off of Standard & Poor's Commodity Trends Indicator, or CTI, which bets on some commodity prices to rise and others to fall, depending on where the indicator's caretakers think a commodity is in its price cycle. So at some point, the indicator might call for holding futures contracts that will profit from corn prices rising (a "long" position), while at the same time it might call for selling short silver futures to bet on a drop in the metal's price.
ETF BASIC NEWS June 2, 2009 3:46pm

What Impact will GM’s Bankruptcy Have on Your ETF?

gmFunds with the Largest GM Stake The top mutual fund holders of GM’s stock are all index mutual funds and index ETFs. The Dow DIAMONDS (NYSEArca: DIA) carries almost 7 million shares, the Vanguard 500 Index Fund (Nasdaq: VFINX) has 5.8 million shares and the SPDRs S&P 500 ETF (NYSEArca: SPY) owns 5.26 million shares. Because GM is a component of key stock benchmarks like the Standard & Poor’s 500 and Dow Jones Industrial Average, index funds following these benchmarks have been forced to own the stock. What type of performance has that meant for investors?
NYSE:DIA June 2, 2009 1:04pm

Gold reclaims $980 mark as dollar weakens (ETF: GLD)

goldGold rose Tuesday, trading above $980 an ounce as the dollar fell to the lowest level against the euro in more than five months and lost ground against other major currencies, raising gold's investment appeal. The dollar index (DXY), which measures the performance of the greenback against a basket of global currencies, declined for a fourth-straight session.
ETF BASIC NEWS June 2, 2009 12:53pm

US STOCKS-Wall St rises after pending home sales XHB gained 2 percent

housing-etpU.S. stocks rose on Tuesday as key housing data provided further evidence the U.S. recession was abating. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in April, rose 6.7 percent for that month from March, well above economists' average forecast of a 0.5 percent rise, according to a Reuters poll. Shares of home builders increased after the data, as the Dow Jones U.S. Home Construction index .DJUSHB added 1.6 percent and the SPDR S&P Homebuilders ETF (XHB.P) gained 2 percent. "This is our third monthly increase, and it really supports the bullish case," said Jim Awad, managing director at Zephyr Management in New York.
NYSE:XHB June 2, 2009 10:24am

Highlighting International Real Estate ETFs

china-real-estateWe Americans live in interesting times. On the one hand, our new Camelot-like president has raised the hopes of millions. On the other hand, we’re in the most challenging economic environment of our generation. Two victims of the meltdown have been real estate and the dollar: real estate because of all the overvalued properties, the dollar because of government spending. This may lead you to disregard any investment containing the words “real” and “estate.”  It may also lead you to think all investments are bad right now. Yet while the real estate market is suffering here, there can still be opportunity abroad. Broad-based international real estate ETFs could continue to do well despite the stateside economic situation.  iShares FTSE EPRA/NAREIT Developed Real Estate ex-US (IFGL) & SPDR Dow Jones Wilshire International Real Estate (RWX) are the most actively traded and both have done very well over the last several weeks.
NYSE:RWX June 2, 2009 9:42am

Strategies for Short Selling ETFs

shortsaleYesterday there was a short signal on IYT on the close. Unfortunately many brokers did not have shares available to borrow in order to get the short position off. How do you deal with such a situation? There are a few solutions. You can trade the inverse of the ETF. In IYT's case, there was no inverse so therefore this couldn't be done. But in most ETFs an inverse exists and within time more inverse ETFs will be coming to market.
ETF BASIC NEWS June 2, 2009 9:32am

Benefit From Ultra ETFs’ Tracking Error

errorUltra ETFs have become very popular, but can destroy your portfolio if you are not careful. Most of these seek to ‘double’ the daily movement of the underlying security or sector. The important word in this description is ‘daily’ not ‘double’; these are not long-term investment vehicles! It seems like this should not present a problem, but simple math will explain how “tracking error” will erode your equity in a choppy market.
ETF BASIC NEWS June 2, 2009 9:13am

What a Vanguard-iShares Combination Would Mean for ETFs

vanguardWould the transaction be allowed under U.S. and EU anti-trust laws? On its face, this would have a hard time passing anti-trust. The combined entity would control over 60% of ETF assets under management, and that is generally not something lawmakers look favorably on. Of course, Vanguard is the "Great Disrupter," and even in this endeavor, its track record of consistently enhancing the investor experience would work in its favor. The other providers will not be happy about this, and we would expect a political dogfight. How could a merger impact ETF investors? From an ETF user's perspective, the potential merger of these two groups is mixed, mostly depending on how you use ETFs. The biggest detraction would be that this could potentially stifle competition in the ETF space. We would go from three sizable providers (SPDRs, iShares, and Vanguard) down to two. Countering that concern is the fact that Vanguard has a history of reducing costs for investors and enhancing the investor experience in every market that it has entered. If Vanguard were to lower the fees on some of iShares' more liquid products or merge them with Vanguard's lower-cost vehicles, then we would see a tremendous benefit for long-term ETF investors. Full Story:
ETF BASIC NEWS June 2, 2009 9:10am

PIMCO Launches First ETF (TUZ); Files For Six More

pimco2Currently, the largest direct competitor for TUZ is theiShares Lehman 1-3 Year Treasury Bond ETF (NYSE Arca: SHY), which has $7billion in assets and charges management fees of 0.15%.  If TUZ can attract sufficient liquidity tosupport low-cost trading, it will be a serious challenger to SHY. In related news, PIMCO also filed papers with the Securitiesand Exchange Commission to launch six additional fixed-income ETFs: •         PIMCO 3-7 Year U.S. Treasury Index Fund •         PIMCO 7-15 Year U.S. Treasury Index Fund •         PIMCO 15+ Year U.S. Treasury Index Fund •         PIMCO Broad U.S. TIPS Index Fund •         PIMCO Short Maturity U.S. TIPS Index Fund •         PIMCO Long Maturity U.S. TIPS Index Fund PIMCO ETF WEBSITE: Full Story:
ETF BASIC NEWS June 2, 2009 9:02am

PIMCO Enters ETF Business With a Bang

pimcoAfter months of talk, one of the most exciting launches yet in the exchange traded fund (ETF) business is set to happen today: Pacific Investment Management Co. (PIMCO) is now an ETF provider. PIMCO is the leader in fixed-income management, so it’s fitting that their first offering  is the PIMCO 1-3 Year U.S. Treasury Index Fund (TUZ), which focuses on low-yielding short-term Treasuries. The launch is especially exciting, because it’s going to go head-to-head with the grandfather of Treasury ETFs, iShares Barclays 1-3 Year Treasury Bond (SHY). PIMCO recognizes that competition is fierce, but they are also sensitive to the fact that current yields are close to historic lows. To lure those looking for a strong fixed-income brand name at a reasonable price, the fund will have a 0.09% expense ratio after waiving a portion of the fees for at least a year. That’s less than any other bond ETF tracked by Morningstar, notes Ian Salisbury for The Wall Street Journal. SHY’s expense ratio is 0.15%. Full Story:
ETF BASIC NEWS June 2, 2009 8:51am

Bank stocks slip as offers dilute some firms a bit

bank1The KBW Bank ETF (KBE), which tracks the industry sector, fell 0.4%.  Banks are rushing to raise capital without government assistance, because that is one of the preconditions for repayment of previous government investment that the Fed laid out late Monday. Full Story:
ETF BASIC NEWS June 2, 2009 8:47am

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