It’s been an interesting week in the world of ETFs: The leaders of the G-20 nations met in Pittsburgh, existing home sales fell 2.7% in August, and oil fell below $66/bbl. Here are the ETF Database staff picks of the week’s most important and interesting stories from around the Web:
The 3 Best ETFs For The Final Quarter of 2009 at ETF Expert:
The author’s picks for the best ETFs of the fourth quarter have a strong international focus, as well as a belief in U.S. Treasury weakness. The three funds include TBT, DEM, and IXC, all of which have their own unique risks and rewards. TBT looks to capitalize off of an increase in risk appetite as well as the reduction of foreigners buying U.S. debt, which would push Treasury bond prices lower. Meanwhile, DEM looks to provide investors with a robust dividend yield of over 6%, which is paid out at the end of the year, and IXC focuses on of the international energy sector.
Defending the “Most Dangerous ETFs” at ETF Database:
We posted a response to a recent article by Don Dion, in which Don discusses what he considers to be the most dangerous ETFs in the market today. Michael Johnston defends some of the funds that made the list, including FRN, an ETF that invests in frontier markets. Johnston argues that 20 years ago Brazil, China and India would have been considered frontier markets, and that investments in those countries have turned out pretty well over the past two decades. He goes on to discuss that although these ETFs have risks and aren’t for everyone, they can be very powerful investment vehicles for others.
Tapping Into Israel: Two Vastly Different Choices at Index Universe::
As of last year, Israel has been upgraded to developed market status, leaving it in a forgotten position compared to its new peers, such as the United States, Germany, and Japan. The author sees a lot of growth still left in Israel, given its near record foreign direct investment in 2008 of $10 billion, which helped push the Israeli index up nearly 60% year-to-date. The article mentions one mutual fund as well as EIS which, not surprisingly, is far cheaper than its mutual fund counterpart. EIS is heavily weighted towards Teva pharmaceutical, has significant holdings in technology stocks, and has minimal exposure to financial equities.
Will Gold ETFs Continue Their Bull Run? at ETF Daily News:
The author discusses how commodity stocks have out-gained the actual commodities this year, with GDX up more than twice as much as gold bullion this year. A similar situations has arisen for HAP, which tracks an index of hard asset producers that have done much better than the commodities they produce. HAP is an interesting choice because it invests in a diversified mix of companies that produce everything oil to potash to uranium, giving investors access to a wide range of commodities without directly investing in them.
Best Currency ETF Plays to Exploit Weak Dollar Trend at Darwin’s Finance:
This article highlights the benefits of diversifying some of your holdings into foreign currency in order to profit from the weak dollar trend. The author cites the fact that FXA, a currency trust that invests in Australian dollars, is up over 20% year to date. Foreign Currency ETFs are also lauded as a better investment vehicle than pure forex trading, since forex trading often has significant leverage and risk.
That’s it for This Week in ETFs: happy reading. Have a great weekend everyone!