This Week In ETFs: December 5th Edition

by on December 5, 2010

This week finally brought some good news to equities, as the first two days of December saw traders buy up shares in a variety of sectors sending markets surging higher by over two percent. In Europe, Ireland officially accepted a bailout equal to roughly $100 billion, helping to ease fears of a collapse in the Euro-zone. Unfortunately, this calm wasn’t meant to last as it was soon reported that S&P is likely to downgrade the credit rating of Portugal as the country falls further into debt and closer to crisis levels. However, markets were able to overlook this batch of bad news and instead focused in on positive U.S. data and a report from Goldman Sachs that upgraded the outlook on U.S. financials. Yet, Friday brought an unexpected rise in unemployment, putting pressure on equities and leaving major indexes relatively flat to close out the week. Meanwhile, the ETF world saw a surge in activity with over two dozen funds introduced in just five days, bringing the total up to nearly 1,100 exchange traded products available to investors. Below, we profile three interesting ETF articles from around the Web in the past week:

New Barclays Index Moves Beyond BRIC at Index Universe:

Barclay’s Capital launched a new index focused on investing in emerging markets beyond the BRIC nations. Instead of the usual suspects, the index will allocate to countries that the company sees as possibly becoming leading performers in the near future. The countries are picked based on careful research that measures not only past performance, but resiliency during economic hardships, good financial exposure, and policy improvements. This new index comes as a result of the surging popularity in emerging markets, many of which are predicted to see growth levels that will outpace the developed world in coming years.

Socially responsible investing is an investing strategy based on the political, social, environmental, and corporate governance considerations of a specific firm. Investors who seek to buy up companies that are generally ‘good’ believe that this moral attitude will eventually be rewarded by the markets and that companies that act unethically, will perform worse than those who stick to their core values. While this strategy has often helped investors to avoid some of the world’s most notorious companies– such as Enron– it also misses out on some consistent winners. Some of the most profitable sectors in recent decades have been based on business models that many would find objectionable like tobacco and alcoholic beverages. For investors who are willing to accept this risk of missing out on some of these companies, this article goes on to outline several responsible companies and indexes for investors who are seeking to have a more ethical allocation strategy.

Indonesia ETFs Head-To-Head: IDX vs. EIDO at ETF Database:

As emerging markets have grown in popularity, investors have started looking for exposure outside of the BRIC nations, which is something that a growing number of funds offer. One of the most popular options outside of the BRIC is Indonesia. The Southeast Asian nation has been able to keep its economy rolling despite the rocky road that the global economy has faced thanks to its large population that is known for its high levels of consumer spending and low labor costs. This combination could allow the country to continue to grow at an impressive clip making it an interesting choice for investors seeking non-BRIC emerging market equity exposure. This article goes on to put the two main Indonesia ETFs head-to-head, in order to compare and contrast the funds, allowing investors to choose the right one for their portfolio.

Disclosure: No positions at time of writing.