It’s been an interesting week the world of ETFs: Gold finished the week around $1045/oz and President Obama won the Nobel Peace Prize. Here are the ETF Database staff picks of the week’s most important and interesting stories from around the Web:
3 Strategies for Protecting Against a Depressed Dollar at ETF Guide:
This article gives investors three great ways to protect yourself against a falling dollar with ETFs. The author likes foreign inflation protected bonds because they are so prevalent throughout the rest of the world; nearly 2/3 of all inflation protected bonds are foreign securities including SPDR’s WIP. As we have seen in early 2009, metals can also be a great hedge against a falling dollar, especially precious metals such as gold and silver. Lastly, currency ETFs offer investors the chance to either short the dollar with funds like UDN or purely invest in other foreign currencies with any number of funds from Rydex’s CurrencyShares.
Currency ETF Spotlight: WisdomTree CEW at ETF Database:
We discuss WisdomTree’s new Emerging Currency Fund (CEW) that fills a void in the emerging market currency space. This fund currently invests in 11 emerging market currencies from around the globe, everything from the Brazilian Real to the Turkish New Lira. This fund provides investors with access to risky markets but with a fraction of the volatility that can be found in their respective countries’ stock markets. The fund also offers a yield of 2.8%, roughly ten times the rate of a similar fund invested in American assets and with the dollar continuing to fall this fund seems like a good bet for investors looking to diversify their holdings further.
Bond ETFs: Winds of Change Begin to Swirl at ETF Expert:
Gary Gordon discusses the recent 30 year Treasury bond auction and the subsequent huge increase in volume for ProShares UltraShort 20+ U.S. Treasury (TBT). The volume for ProShares’ fund shot up to over 12.5 million; more than twice its average daily volume. On that day, the fund was up more than 2% while the rest of the short Treasury bond funds posted gains as well. Meanwhile, a number of foreign bond funds were in the green suggesting that has investors lose confidence in yields being able to stay so low for thirty years they will either pile into foreign bonds or demand higher yields which will push funds like TBT even higher.
Sign Of The Times: Long, Short, Flat In One Index at Hard Asset Investor:
Detailed in this article is an ELEMENTS fund that tracks the S&P/Commodity Trend Indicator Index through an ETN. This note, which is an obligation of HSBC and trades under the symbol LSC, seeks to invest in different commodities based on technical analysis and traditionally invests in both softs and energy commodities. While the fund crushed the competition in late 2008 due to its avoidance of oil futures during their crash, it has underperformed this year suggesting that it is a commodity investment for more cautious investors.
How to Tap South Korea’s Growing Economy at Morningstar:
This article discusses a forgotten Asian market, South Korea. Despite the massive size of the South Korean economy, currently the fourth biggest in Asia, there is only one ETF that tracks this important country, iShares’ EWY. Not only is the fund a great way to tap a very important market but the South Korean economy is generally uncorrelated with American equity markets and despite its strong weighting in technology firms has a lower correlation to QQQQ than many would expect at just over .80.
That’s it for This Week in ETFs: happy reading. Have a great weekend everyone!