This Week in ETFs: May 8 Edition

by on May 8, 2009

It’s been another exciting week in the world of ETFs. Here are the ETF Database staff picks of the week’s most important and interesting stories from around the Web.

Commodity ETPs Closing In On A Bull Market at Hard Assets Investor:

Commodities – that is, certain commodities, such as crude oil, base metals and the softs – have awakened to turn upward. At the same time, interest in safe-haven gold has been eroding.

The renewed interest in commodities has been reflected in the price trends of broad-based exchange-traded products (ETPs).

When Will Short ETFs Get “Amped” About Economic Hardship? at ETF Expert:

Feel like the Nasdaq is way overpriced? Think it’s due for a pullback? Perhaps. But shorting the Nasdaq 100 with the Short Nasdaq 100 QQQ ProShares (PSQ) hasn’t been profitable since early March. What’s more, the current price is significantly below a long-term 200-day trendline.

Investors Go Short — At Just The Wrong Time at Index Universe:

Almost $8.8 billion inflow went into such so-called inverse ETFs… The bulk of that trading probably came from institutional pros such as hedge fund managers and large corporate investors, says Michael Traynor, the NSX’s chief strategy officer.

He noted the old adage that historically investors have shown an uncanny ability to pick the worst times to make their moves.

How the Stress Test Will Hurt Investors at ETF Guide:

There is no shortage of financial ETF choices but the key question is whether the stress test results will sink or propel stocks. Will the “worst case scenario” for banks ever materialize or is the worst over?

How Beta Got Her Groove Back at ETF Database:

With the advent of ETFs, beta has developed a new significance. As opposed to actively-managed mutual funds, ETFs do not seek to beat the market. Rather, their goal is to move in line with a selected market index (e.g., IVV seeks to replicate the return of the S&P 500). In other words, many ETFs strive for a beta of 1 relative to the underlying market index.

That’s it for This Week in ETFs: happy reading. Have a great weekend everyone!