Source's launch of 13 new funds last week marked the arrival of a major new issuer in the European exchange-traded products market.
The launch of an ETF "platform", with backing from several financial institutions, was a topic that we covered in a recent feature. But Source's pricing policy went against the grain of recent competitor launches, which have been characterised by falling fund fees. Is this a sign that a long-standing trend towards cheaper management charges is about to change? And what should one make of the issuer's decision to list funds on a single European exchange, the Deutsche Boerse, rather than cross-listing its ETFs in different European countries?
In a recent blog we highlighted some recent research from Debbie Fuhr's team at Barclays Global Investors, which showed that European ETF average fee levels had converged with those in the US, at 31 basis points per annum.
There are still some differences between the two markets—to give two examples, Europe still cannot match the ultra-low fees on offer from US large-cap equity ETFs, which average 12 basis points, while the more institutional investor base in Europe means that there is no real equivalent to the multi-billion US leveraged and inverse leveraged funds sector, which is popular with retail investors, and where the typical fee is 95 basis points.
Full Story: http://www.indexuniverse.com/component/content/article/12-features/5774.html?Itemid=19 Source Poses Questions
Source's launch of 13 new funds last week marked the arrival of a major new issuer in the European exchange-traded products market.
The launch of an ETF "platform", with backing from several financial institutions, was a topic that we covered in a recent feature. But Source's pricing policy went against the grain of recent competitor launches, which have been characterised by falling fund fees. Is this a sign that a long-standing trend towards cheaper management charges is about to change? And what should one make of the issuer's decision to list funds on a single European exchange, the Deutsche Boerse, rather than cross-listing its ETFs in different European countries?
In a recent blog we highlighted some recent research from Debbie Fuhr's team at Barclays Global Investors, which showed that European ETF average fee levels had converged with those in the US, at 31 basis points per annum.
There are still some differences between the two markets—to give two examples, Europe still cannot match the ultra-low fees on offer from US large-cap equity ETFs, which average 12 basis points, while the more institutional investor base in Europe means that there is no real equivalent to the multi-billion US leveraged and inverse leveraged funds sector, which is popular with retail investors, and where the typical fee is 95 basis points.
Full Story: http://www.indexuniverse.com/component/content/article/12-features/5774.html?Itemid=19 Case-Shiller: Just Being Less Poor In Housing Prices (XHB)
There is some good news on the housing front, although this “good news” may only be a relative issue and we are having to go back to February in this data. The S&P/Case-Shiller home-price index for February did stay on path for its neverending slide, but the good news is that the record declines were broken after 16 months. The report showed that 15 of the 20 major metropolitan areas posted average sale price declines of 10% or more and housing prices on a national average look more similar to 2003 levels. The SPDR S&P Homebuilders ETF (NYSE: XHB) is down 1.4% at $13.37 so far this morning.
Full Story: http://247wallst.com/2009/04/28/case-shiller-just-being-less-poor-in-housing-prices-xhb/ OOK Advisors Files Texas Exchange-Traded Fund with Securities and Exchange Commission
Well, it does not take a genius to assume that we will be seeing more of these. It is only a matter of time for all the States to establish an ETF of their own to offer investment opportunities for their local economies.
Oklahoma-based OOK Advisors, a sister company of Capital West Securities, recently filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to launch the Texas Exchange-Traded Fund. The Fund is expected to be traded on the NYSE Arca under the stock symbol “TXF.” The initial paperwork was filed with the SEC in January. The fund will be made up exclusively of stocks issued by Texas’s publicly traded companies. TXF is expected to be one of the first state-based equity Exchange Traded Funds (ETF) to “ring the bell” and begin trading. “We believe there are some outstanding companies in Texas with proven abilities that will make this fund a great vehicle to invest in Texas with us,” said Keith Geary, chairman of the Geary Companies. Full Story: http://news.morningstar.com/newsnet/viewnews.aspx?article=/bw/20090424005638_univ.xml
New Filings: Foreign Sector ETFs Planned By iShares
In a move expected to round out its lineup, iShares has filed to launch 10 international sector exchange-traded funds.
The firm already has some 38 sector ETFs for the U.S. and North America. It also has 11 different global funds focused on industries covering U.S. and foreign markets.
Now, iShares wants to boost its coverage to just non-U.S. developed and emerging markets divvied up by sectors.
No expense ratios were mentioned in the filings. The proposed iShares international sector ETFs will face several competitors, including a full lineup tracking S&P indexes sponsored by State Street Global Advisors. Most have tiny asset bases and charge 0.50% in annual expense ratios.
Full Story with list: http://www.indexuniverse.com/component/content/article/10-news-in-focus/5773.html?Itemid=19 Jim Cramer rants on leveraged ETF’s
ETFs Most Sickened By Swine Flu Fears
Mexico and airlines led ETFs south Monday on fears the swine flu crisis could deepen the global recession.
The worst-hit industry, as tracked by Claymore/NYSE Arca Airline (NYSEArca:FAA - News), plunged 11% as the U.S. declared a public health emergency and discouraged nonessential travel to Mexico. The ETF experienced its steepest one-day dive since it started trading in late January. Volume swelled more than five times usual.
Two of the ETF's largest holdings: Delta Air Lines (NYSE:DAL - News) and Continental Airlines (NYSE:CAL - News) nose-dived 14% and 16%, respectively, upon hitting overhead resistance at their 40-week moving averages.
FAA rallied 68% off its low over the past seven weeks vs. 31% for the S&P 500 and was due for some profit-taking. It reversed last week after failing to break prior resistance above 22. It may be forming a handle in a V-shaped base.
The pullback offers a buying opportunity in airlines, which should continue rising through May, according to Yiorgo Aretos, founder of the TMPProject.com.
He recommended buying airlines at the end of 2008. He also expected the market overall to pull back after rising for seven weeks.
| Symbol | Price | Change |
|---|---|---|
| CAL | 11.08 | -2.17 |
| COW | 30.10 | -0.87 |
| DAL | 6.75 | -1.13 |
| EWW | 30.73 | -2.38 |
| FAA | 19.71 | -2.32 |
Watch the ‘Mexico ETF’ Fall (EWW)
Mexico's economy is in serious trouble, tourism was already hurting thanks to the recent drug trade violence, the peso has never been more volatile, and now you add the Swine Flu to the mix?! Don't forget about Mexico City's 5.6 magnitude earthquake a few hours ago. The downfall of the iShares MSCI Mexico Inv. Mt. Idx. (ETF) (NYSE:EWW) is just beginning.
Today the EWW has already shed 8%, trading at $30 a share and there's no doubt that if iShares could file and put out an Inverse Mexico ETF, they would rush to do so.
Full Story: http://thestockmasters.com/short-EWW-Mexico-ETF-04272009 How does a 3x ETF gain 3 times the index performance
We have been asked many times the question: How can an ETF gain three times the performance of an index and where does this money come from. We have included the following from the Direxion Prospectus (FAS, FAZ) which should help answer this question. Keep in mind, these tools are to be used as a daily trading instrument, not a long term investment.
Rafferty Asset Management, LLC (“Rafferty” or “Adviser”), the investment adviser to the Funds, uses a number of investment techniques in an effort to achieve the stated goal for each Fund. For the Bull Funds, Rafferty attempts to magnify the returns of each Bull Fund’s index or benchmark for the relevant period. The Bear Funds are managed to provide returns inverse (or opposite) by a defined percentage to the return of each Bear Fund’s index or benchmark for the relevant period. Rafferty creates net “long” positions for the Bull Funds and net “short” positions for the Bear Funds. (Rafferty may create short positions in the Bull Funds and long positions in the Bear Funds even though the net exposure in the Bull Funds will be long and the net exposure in the Bear Funds will be short.) Long positions move in the same direction as their index or benchmark, advancing when the index or benchmark advances and declining when the index or benchmark declines. Short positions move in the opposite direction of the index or benchmark, advancing when the index or benchmark declines and declining when the index or benchmark advances. Rafferty generally does not use fundamental securities analysis to accomplish such correlation. Rather, Rafferty primarily uses statistical and quantitative analysis to determine the investments each Fund makes and the techniques it employs. As a consequence, if a Fund is performing as designed, the return of the index or benchmark will dictate the return for that Fund. Each Fund pursues its investment objective regardless of market conditions and does not take defensive positions. A Fund generally will hold a representative sample of the securities in its benchmark index. The sampling of securities that is held by a Fund is intended to maintain high correlation with, and similar aggregate characteristics (e.g., market capitalization and industry weightings) to, the benchmark index. A Fund also may invest in securities that are not included in the index or may overweight or underweight certain components of the index. A Fund’s assets may be concentrated in an industry or group of industries to the extent that the Fund’s benchmark index concentrates in a particular industry or group of industries. In addition, each Fund is nondiversified, which means that it may invest in the securities of a limited number of issuers. Each Bull Fund and Bear Fund has a clearly articulated goal which requires the Fund to seek economic exposure in excess of its net assets. To meet its objectives, each Fund invests in some combination of financial instruments so that it generates economic exposure consistent with the Fund’s investment objective. The impact of market movements determines whether a portfolio needs to be re-positioned. If the target index has risen on a given day, a Bull Fund’s net assets should rise, meaning the Fund’s exposure may need to be increased. Conversely, if the target index has fallen on a given day, a Bull Fund’s net assets should fall, meaning the Fund’s exposure may need to be reduced. If the target index has risen on a given day, a Bear Fund’s net assets should fall, meaning the Fund’s exposure may need to be reduced. If the target index has fallen on a given day, a Bear Fund’s net assets should rise, meaning the Fund’s exposure may need to be increased. A Fund’s portfolio may also need to be changed to reflect changes in the composition of an index and corporate actions like stock splits and spin-offs. Rafferty increases the Fund’s exposure when its assets rise and reduces the Fund’s exposure when its assets fall. To determine which instruments to purchase or sell, Rafferty identifies instruments it believes exhibit price anomalies among the relevant group of financial instruments to identify the more advantageous instrument. Each Bull and Bear Fund is designed to provide daily investment returns, before fees and expenses, that are a multiple of the returns of its index or benchmark for the stated period. While Rafferty attempts to minimize any “tracking error” (the statistical measure of the difference between the investment results of a Fund and the performance of its index or benchmark), certain factors will tend to cause a Fund’s investment results to vary from the stated objective. A Fund may have difficulty in achieving its daily target due to fees and expenses, high portfolio turnover, transaction costs and/or a temporary lack of liquidity in the markets for the securities held by the Fund.
How to Access Commodities with Australia’s ETF
The Australian stock exchange is sensitive to mining stocks and commodities, as the top holdings within their exchange traded fund (ETF) focus on this aspect of their economy.
Although markets began last week in positive territory, the mining stocks Rio Tinto and BHP Biliton both took markets lower upon recent news. Local shareholders voiced their concerns over the controversial Chinalco deal at the meeting, just as investors did at last week’s London AGM, reports Terry Mc Cran for Courier Mail.
The speculation that the two major mining companies had been taken over concerning the Chinalco deals has many believing that downside risk is going to outweigh short-term gain. For investors, a commodities investment in an ETF holding one or both of these companies can be worth its weight, as the diversification alone can benefit a portfolio.
Full Story: http://www.etftrends.com/2009/04/how-to-access-commodities-with-australias-etf.html Bearish Mexico Stock Options Reward Traders With 200% Returns (Puts on EWW)
April 27 (Bloomberg) -- Options traders who placed bets last week that Mexico’s outbreak of deadly swine flu would spur a stock-market sell-off earned more than 200 percent on their investments today.
Contracts giving the right to sell the iShares MSCI Mexico Investable Market Index Fund for $31 by May 16 jumped as high as $1.86 today from the 60-cent closing price last week, according to data compiled by Bloomberg at 2:06 p.m. New York time. The contracts were the most-traded options today on the iShares fund, which mimics the performance of the MSCI Mexico Index, a 25-company benchmark for Mexican shares.
The fund, which changes hands on U.S. exchanges like a stock, lost as much as 8.5 percent today to $30.29 after President Felipe Calderon declared emergency powers to fight the virus, which has killed as many as 149 people in Mexico. Mexico’s Health Minister Jose Cordova cancelled school classes on April 24 to prevent the spread of a “new strain of influenza,” according to an e-mailed transcript of a speech in Mexico City.
Full Story: http://www.bloomberg.com/apps/news?pid=20601087&sid=a1DcIf5YFMFo&refer=home
Put/Call option list: http://finance.yahoo.com/q/op?s=EWW Scared to Tackle Equities? How About a Convertible Bond ETF?
For wary and weary investors who find themselves a bit skittish to re-enter the markets, there’s a new exchange traded fund (ETF) that straddles the line between stocks and bonds.
A convertible bond is a hybrid tool for investors that offers exposure to both stocks and bonds and pays investors a coupon smaller than a comparable bond, but gives the investor the option to convert the unit into a stock at a later date if they wish, Tom Anderson, State Street Global Advisor’s head of research and strategy, told us.
State Street recently launched its first-to-market convertible bond ETF, SPDR Barclays Capital Convertible Bond ETF (CWB), just in time for this area of the market to experience a resurgence. These bonds, which have been around since the 1970s, are seeing renewed popularity for two reasons. One is their hybrid status. The other, Anderson says, is that “a lot of investors aren’t ready to get into stocks yet - this gives them a middle ground.”
Full Story: http://www.nasdaq.com/newscontent/20090427/scared-to-tackle-equities-how-about-a-convertible-bond-etf.aspx?storyid=8923 Don’t Sweat The Small Stuff – How To Profit With Big Ideas
Failing to identify big market moves resulted in vicious double digit losses. Focusing on ‘small stuff’ won't make a portfolio whole. It’s time to forget about the small stuff and focus on the next big moves to land a home run.
If you are a go-getter, chances are you tackle any task with a full-steam-ahead attitude. Whole-souled involvement in a project however, can cause the “can’t see through the forest for the tree” effect. Clearing the mind often helps. This could be compared to being stuck in a labyrinth and getting help from someone with a birds-eye view of your situation.
When it comes to investing, it’s easy to get sidetracked by factors that seem important but in essence cloud your judgment. This article is designed to provide a “birds-eye view” of the current investment environment.
Right now for example, it’s earnings season. Not a day goes by where a company doesn’t either exceed or fall short of their earnings. The market rallied when Wells Fargo (NYSE: WFC) beat estimates but dropped when Goldman Sachs (NYSE: GS) also beat estimates. What does that mean?
Small stuff distractions There is at least a hand-full of commonly used indicators and time wasters that could be filled away in the “don’t sweat the small stuff” drawer. None of them alone is bad per say, but they might keep you from focusing on what’s really important (more about that later).
Distraction No. 1: Stock picking Buying individual stocks is exciting but dangerous. One piece of bad news might send a stock tumbling (or vice versa). Hyped up stocks tend to fall harder and faster than the broad market. Numerous studies show that baskets of stocks (or indexes) perform better than stock pickers. Mutual fund managers are an outstanding specimen of stock picking under performance.
Not only are broad market indexes and sector indexes safer, they are also easier to predict. Back in October 2008 for example, the ETF Profit Strategy Newsletter marked financials as a “down-ward spiral with no stop-loss protection.” At the time, we did not know which companies would go under, but it was clear that ETFs like the Financial Select Sector SPDRs (NYSEArca: XLF) should be avoided.
Using 3X ETF’S be sure you use them correctly
Will Gold Get the Flu? (GLD, GDX, IAU)
Gold is not being used by industry right now and demand for jewelry remains highly unexciting, but many traders are still using the shiny metal stuff for the ultimate flight to safety for protecting against uncertainty and inflation. Some ETFs we track, SPDR Gold Shares (NYSE:GLD), Market Vectors Gold Miners ETF (NYSE:GDX), and iShares COMEX Gold Trust (NYSE:IAU) were all off around 1% in pre-market trading this morning........
...........If the threat to global health and the global economy from the swine flu worsens, gold prices could move up.
Full Story: http://247wallst.com/2009/04/27/will-gold-get-the-flu-gld-gdx-iau/ Three ETFs In The Line Of Fire (RWR, IHF, XRT)
As the first-quarter earnings season continues to heat up, more casualties are likely. Some sectors of the market are better positioned than others to survive, but here are three sector-focused ETFs currently in the line of fire.
A Shaky Foundation
Real estate has been a focus of the economic storm for some time. It comes as little surprise that the SPDR Dow Jones Wilshire REIT ETF (NYSE:RWR) now sits 55.8% below its trading price a year ago. This ETF holds 80 stocks and has exposure to commercial, residential and healthcare REITs.
Simon Property Group (NYSE:SPG), which accounts for 8.4% of the fund's net assets and is its largest component, has said it has been compelled to significantly cut back its development spending. However, the company's 2008 funds from operations (FFO) actually increased 8.8% on a per-share basis when compared to 2007.
Pressure on occupancy rates and earnings are still likely to plague many names in this fund. Dividend cuts and forecast revisions could also be forthcoming. This earnings season should tell us how much rebuilding lies ahead for this ETF. (For more, see The Risks Of Real Estate Sector Funds.)
Full Story: http://community.investopedia.com/news/IA/2009/Three-ETFs-In-The-Line-Of-Fire-RWR-IHF-XRT0427.aspx 
