A relative tame week on Wall Street came to an end with modest gains in most equity markets, as attention continued to focus on the fallout from the Gulf oil spill. Following an eventful string of days that saw BP’s chief testify before Congress, the suspension of the oil giant’s dividend, and creation of a $20 billion fund to pay economic and environmental claims, the domestic energy sector faces a very uncertain future.
It was a relatively quiet week in the ETF world as well, although the stage has been set for several interesting product launches before the second quarter closes out. Below, we offer up our picks for the best ETF reading from around the web:
How’s That Gold-Hedged S&P 500 ETN Doing? at Hard Assets Investor:
In this piece, Brad Ziegler checks in on the recently-launched UBS E-Tracs S&P Gold Hedged Index ETN (SPGH), an exchange-traded product designed to deliver combined returns from the S&P 500 Index and long positions in COMEX gold futures. Following a tumultuous period in equity markets that saw gold repeatedly touch record highs, Ziegler takes a look at how this gold-hedged S&P 500 ETN has performed (as well as offers up a “do-it-yourself” alternative). Also included is a look at the tax treatment of SPGH, as well as some “hidden costs” that are worth a closer look.
BlackRock Aims to Double Its $13 Billion in Mexico Assets at The Wall Street Journal:
BlackRock Inc., the firm that acquired the market-leading iShares family of ETFs last year, has some aggressive goals within the Mexico market. Hoping to capitalize on the demand for ETFs by institutional and foreign investors, the company currently offers 133 ETFs through the Mexican Stock Exchange, a system that has seen a boom of new ETFs in recent years. Many providers aim to tap into Mexico’s mandatory pension funds, which hold almost $100 billion in assets. This article outlines some of the challenges and opportunities that await BlackRock and other issuers in what could be the next frontier of the ETF market.
Seven ETFs For Investors Mourning The Death Of BP’s Dividend at ETF Database:
With public scrutiny intensifying, oil giant BP was forced this week to take drastic actions to convince lawmakers of its sincerity to accept liability for the devastating oil spill. The company agreed to set up a $20 billion escrow fund to pay claims and suspend at least three dividends after pressure from the Obama administration. The development was cheered by environmentalists, but came as bad news for pension funds and other investors who rely on the steady dividend. With investors now missing out on roughly $7.5 billion in dividends, the search to replace BP in portfolios has begun. In this article, we outline seven ETFs that focus on dividend paying companies, including both domestic and international options.
Disclosure: No positions at time of writing.