Exchange traded funds (ETFs) have seen growth slow over the past three months. During this period, assets under management globally shrank by a substantial amount.
While there have been a number of ETF closings in 2008, primarily because of slow asset growth, ETFs are not dead. We're in the midst of a bear market - it's not a time where most people can expect to see a ton of new money flowing into the markets. \
We put this out via press release this morning, so I thought I'd post it here, fyi:
Delta Global Indices Introduces Global Shipping Index
Delta Global Shipping Index to Track 30 Global Maritime Shipping Companies with
Combined Market Cap near $50 Billion and an expected dividend yield of approximately 8.25%
Every now and again, I enjoy shaking things up. For instance, there's a downloadable application for the iPhone called "Urban Spoon." You shake the iPhone and... using GPS navigation... Urban Spoon suggests a restaurant nearby.
In the spirit of shaking up the blog format, then, I thought I'd do a bit of Q &A for exchange traded fund investing. For readers, e-mailers, radio show listeners, I've put together the following:
Question #1: Since the economy is really bad, doesn't that mean that stock ETFs will be really bad?
On June 18th, greenfaucet contributor Tom Lydon and co-author John Wasik released their first book, iMoney: Profitable Exchange-Traded Fund Strategies for Every Investor. In just one month, iMoney has received tremendous praise from the investment community, readers, and book critics. Exclusively for the greenfaucet community, we have provided summaries of the first two chapters:
A Brief History of the Mutual Fund Folly and After the Bubble Burst
Headline: Where the Mutual Fund Companies Went Wrong
Intro: To understand how ETFs came to be and why they're so popular with investors today, we feel that a little back story is in order.
Conclusion: While no one can claim that there will never be corruption again, or that there will never be another market crash, ETFs at least put investors in a better position of protecting themselves by enabling them to see what's cooking in the kitchen.
How ETFs Can Be Employed 
Headline: ETFs Have Made It Possible for Anyone to Play in the Markets
Intro: There are ETFs covering dozens of asset classes, sectors and global regions. How can you choose between them?
Conclusion: It's important for investors to remember that which ETFs they buy is a personal decision that depends on their goals, risk profile, asset allocation and any concerns that might be had about treatment at tax time. Having these questions answered beforehand will make for an easier decision-making process.
Equal vs. Fundamental Weighting
Headline: When It Comes to Index Weighting, Which Way Is Better?
Intro: How you like your indexes weighted is a matter of taste and preference, but knowing the differences can be key in how you choose which ETFs to buy.
Conclusion: Not all indexes are created alike. Understanding the differing methods of construction and how their components are weighted will help you at asset allocation time.
iMoney not only explains how ETFs work, but also offers simple strategies on how to make ETFs work for investors of all levels and at all stages of life.
Acclaim from Editorial Reviews:
"The authors cover the ETF waterfront. Whether you are a young investor just starting out or a seasoned stock veteran looking for new investment opportunities, this book is a valuable resource." Sam Stovall, Chief Investment Strategist, Standard & Poor's Equity Research
"Finally! Lydon and Wasik objectively analyze exchange traded funds for the average person. Me particularly liked iMoney's comparisons with more familiar mutual funds, the clear discussion about risks and the varying viewpoints from some of the industry's smartest minds." Alan Lavine and Gail Liberman, syndicated columnists for Marketwatch.com and authors of Quick Steps to Financial Stability
Praise from Readers:
"I have been in the market for a while, but mostly stuck to Mutual Funds. This book gave me a lot of great information on how to use ETFs in my portfolio in order to reduce costs and increase profit. I would recommend this book to anyone." - Amazon.com Reader
"I really enjoyed Mr. Lydon and Wasik's book. They take time to cover the basics and covers the evolution of the fund industry. I think this information is essential to fully understanding ETFs and why their advantages are so great and attractive to investors, particularly those who were burned in the early 2000s with active manager funds." - Amazon.com Reader
To learn more about or purchase a copy of iMoney: Profitable Exchange-Traded Fund Strategies for Every Investor visit Tom's site or Amazon.com.
IndexUniverse is reporting the offering of a new frontier markets ETF on the Nasdaq: the PowerShares MENA Frontier Countries Portfolio (NSDQ: PMNA). The PMNA will track the Nasdaq OMX Middle East North Africa Index, which includes the countries of Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Nigeria, Oman, Qatar, and the United Arab Emirates. Claymore recently offered the Claymore/BNY Mellon Frontier Markets ETF (NYSE: FRN) which is more global given that in also includes countries in Asia, Europe, and Latin America, along with the Middle East and Africa. As a result of its focus, the PMNA is a little more concentrated on oil-rich countries. In a recent article we discussed the new Gulf States index launched by S&P, called the GCC 40, covering 40 stocks from the Gulf Cooperation Council. Of interest is that this index covers some of the same region as as the PMNA, but is focused more on financial companies, and less on crude oil and industrial companies.
The PMNA ETF may be of interest to those investors looking to participate in the growth of the oil-rich gulf states that are themselves in the process of reinvesting capital. Furthermore, some analysts have recently discussed how Africa could be one of the next regions for growth. If this is the case, then Northern Africa would be a good place to start investment in this continent.
Also, for those who are interested, there is a distinction between emerging and frontier markets. The term emerging market was first introduced by the World Bank and is often used to describe a country with an economy that is in the process of rapid industrialization, and one that usually finds itself between developing and developed status. The term frontier market is often used to describe equity markets of smaller and less accessible countries of the developing world, yet still investable. Frontier markets are essentially "pre-emerging" markets that are expected to be classified as emerging markets once capital and liquidity increase. Frontier markets could have a high level of development, but still be too small to be considered emerging (for instance, the Baltic States, such as Estonia and Lithuania). They could also be countries where investment restrictions have started to loosen, allowing companies to be investable (such as countries in the Gulf States), or be countries with lower levels of development than similar regional emerging markets (such as Vietnam and Pakistan). As to be expected, frontier markets in general may offer higher return and longer-term growth, but will also carry more risk.
The mutual fund industry has been throwing a tantrum lately, but it definitely doesn't want to take its ball and go home.
Fund purveyors have been dogged for years by the ever-growing popularity of low-cost exchange-traded products, but when Barclays Global Investors introduced exchange-traded notes (ETNs) last year, the $13 trillion industry called across the schoolyard for Congress and the Treasury Department to protect it from the big, bad bully.
Claymore Advisors, LLC, anticipates launching the first solar power exchange-traded fund (ETF) on the NYSE-Arca under the symbol "TAN" in April 2008, perhaps as early as next week.
In two of my recent commentaries, "Commodity Boom?
State Street Global Advisor has launched a new ETF - SPDR S&P International Dividend (DWX). The objective is to have exposure to 100 high-yielding international stocks. The screening process will only include those stocks: 1) Produced a positive 5 year earnings growth 2) With a limit of a 25% of total cap on financial services stocks 3) With a limit of a 10% of total cap on emerging market stocks 4) With a limit of no one stock equaling 3% of total cap.
India's spectacular growth in recent years has been the talk of the investing world, but the country hasn't been represented by an exchange traded fund (ETF) until now.
Last week, WisdomTree launched the WisdomTree India Earnings Fund (EPI) and traded one million shares right out of the gate. This week, PowerShares is expected to launch the PowerShares India Portfolio (PIN).
