ETFs were range-bound this past week as most markets were looking to finish the week where they started. A European promise to bailout Greece boosted markets on Thursday, but markets fell back on Friday after China announced plans to hike bank reserves for the second time in the past month. Below, we offer our picks for the week’s most important and interesting ETF stories from around the Web:
With sovereign debt issues sending the euro lower, many investors are wondering how debt issues will impact European equity markets. While some markets, such as Sweden, have been able to escape the pullback, the ‘PIIGS’ countries of Portugal, Ireland, Italy, Greece, and Spain have seen their markets drop by an average of over 15%, compared to single digit loses for most of the smaller markets in Northern and Western Europe.
Ten ETFs to Own If (When) The Fed Raises Rates at ETF Database:
Although interest rates are currently at record lows, many see the threat of inflation growing and feel that the Fed will soon have to raise rates. Although higher rates are usually bad news for stocks, we detail ten ETF choices that might offer investors a superior return in the early phase of a tightening cycle. The majority of these choices are from a Merrill Lynch study that compares different stock sectors and how they perform right before a tightening cycle, in the early stages, and at the end of one, giving investors something to look for this time around.
This article discusses a topic that has been in the news a lot as of late: international government bonds. With increased sovereign default risk, many are taking a closer look at some of the ETF options available in this space including the SPDR Barclays Capital International Treasury Bond (BWX) and iShares JPMorgan USD Emerging Markets Bond (EMB). BWX mostly consists of dollar denominated debt, and the strengthening greenback has made it harder for foreign countries to repay their debts. This has sent BWX plunging compared to its more emerging market, non-dollar denominated debt focused counterpart, EMB.
Which Industry Sectors Will Outperform? at ETF Guide:
Every year, some sectors will outperform the general market. Last year it was materials and technology, but most sectors have slumped this year. Three possible outperforming sectors in 2010, according to this article, are the consumer staples (XLP), healthcare (XLV), and utility (XLU) sectors, generally due to their defensive nature and safe-haven status.
Disclosure: No positions at time of writing.