It’s been an interesting week in the world of ETFs: gold trading was extremely volatile, and world leaders met in Denmark to discuss climate issues. Here are the ETF Database staff picks of the week’s most important and interesting stories from around the Web:
Under The Hood Of Alt-Energy ETFs at Hard Asset Investor:
With the climate summit in Copenhagen swinging into full gear, many investors are looking towards alternative energy ETFs as a way to potentially play developments that come out of the conference. This article looks at broad clean energy ETFs, such as ICLN and QCLN, and focuses on two niche alternative energy ETFs: wind and solar power. For solar, Julian Murdoch compares the Claymore/MAC Global Solar Energy Index ETF (TAN) and the Market Vectors Solar Energy ETF (KWT), and discusses how the more diverse holdings of TAN have led it to outperform its solar counterparts. For wind energy, Murdoch discusses the First Trust ISE Global Wind Energy ETF (FAN) and the PowerShares Global Wind Energy Portfolio Fund (PWND). The main difference between these two is their geographic allocation: FAN is more concentrated in Spain, the United States and Germany while PWND has a higher allocation to China and France which has helped the fund ‘blow away’ FAN this year.
Five Ways to Slash Your ETF Expenses at ETF Database:
Due to extreme competition from new ETFs, there have been several funds to hit the market that charge dramatically smaller fees while still providing similar exposure to more established ETFs. We highlight five pairs of nearly-identical funds that feature big differences in expense ratios. While the costs deltas are a matter of basis points, the impact of making a few simple changes to your portfolio could translate into big dollar amounts for buy-and-holders.
Although American GDP grew in the third quarter and the Fed has all but ended its quantitative easing program, Treasury yields have not crept upwards (and in most cases have even gone down). This has made investors in short bond ETFs such as the ProShares UltraShort Lehman 20+ Year Treasury Fund (TBT) and the ProShares UltraShort Lehman 7-10 Year Treasury Fund (PST) worried that billionare hedge fund managers like John Paulson and Paulo Pelligrini were wrong about their short Treasury bond forecasts. However, yields are finally starting to trend upwards and many believe that with the Fed beginning to slowly start an exit strategy, the time to buy short treasury ETFs is now.
Poland: A Forgotten Gem? at Index Universe:
Daniel Harrison takes a look at a new fund from Van Eck that tracks the Polish economy, the Market Vectors Poland ETF (PLND). Among the factors that may make Poland an attractive investment destination are its status as a fast growing market in Eastern Europe and the requirements it imposes upon its citizens to invest in pension funds with a substantial amount of their holdings into Polish equities. This provides Polish funds with a steady stream of assets that many other emerging markets do not have. This ETF is heavily weighted towards financial stocks which comprise nearly 40% of the fund’s total assets. However, the fund only has 13% of its assets in energy stocks, which may be a nice change of pace for most Eastern Europe funds and indeed many emerging markets in general.
ETFs for Betting on Steel’s Strength at TheStreet.com:
This article takes a look at how the growth in emerging markets may increase infrastructure demand, and thereby increase the demand for steel. This trend is bound to have a huge impact on the many steel ETFs, including the Market Vectors Steel ETF (SLX), SPDR S&P Metals & Mining (XME), and iShares Dow Jones US Basic Materials fund (IYM), all of which have more than doubled this year. In addition to benefiting from emerging market growth, Kevin Grewal contends that steel is generally inverted to the dollar, which could be good news for steel investors if the greenback keeps heading south.
That’s it for This Week in ETFs: happy reading. Have a great weekend!
Disclosure: No positions at time of writing.