This Week In ETFs: March 19 Edition

by on March 19, 2010 | ETFs Mentioned:

A week highlighted by the relatively uneventful Federal Reserve meeting saw equity markets head generally higher, as investors cheered the prospect of several more months of low interest rates. After months of heated debate, a vote on health care reform looms over the weekend, and health care funds above-average volumes throughout the week. Below, we offer our picks for the week’s most important and interesting ETF stories from around the Web (sign up for our free ETF newsletter to get ETF analysis and commentary delivered to your inbox):

When Are Emerging Markets Not Emerging Anymore? at Index Universe:

Interest in emerging markets has surged over the last year, as the developing economies of the world have taken the lead in the global recovery effort. There are a number of emerging markets ETFs available to ETF investors, but Olivier Ludwig notes that they’re not all identical. The most significant differences between the various options centers around the South Korea, Taiwan, and Israel, three markets considered to be “emerging” by some sources and “developed” by others. At one end of the spectrum is VWO and EEM, which allocate more than a quarter of holdings to these economies. At the other end is EEG, which avoids them altogether. And somewhere in between is GMM.

Can Copper Climb Higher? at Hard Assets Investor:

“Talk about a comeback,” writes Lara Crigger. “Since its March 2009 bottom, copper has risen more than 140%.” Crigger analyzes some of the drivers behind copper’s surge, as well as its recent stall. Copper is used widely in construction, and is a key component of electrical wiring and plumbing. In addition to dependence on the homebuilding industry, copper prices take cues from China, the world’s largest consumer of the metal. Crigger goes on to discuss several ETF options for gaining copper exposure, including JJC, DBB, and the new Copper Miners ETF from First Trust (CU).

TIP: Silver Bullet Or Steel Trap? at ETF Database:

With anxiety building over the long-term consequences of the huge increase in money supplies in recent months, investors are actively seeking out ways to protect assets from the ravages of inflation. The ETF of choice has been the Barclays TIPS Bond Fund (TIP), which invests in inflation-protected bonds issued by the U.S. government. While TIP is conceptually an effective hedge against rising prices, there’s a lot more than this fund that meets the eye. We outline three reasons to be concerned about TIP’s ability to protect against inflation, and also analyze a potentially better “inflation-proof” ETF.

Are Your Mutual Funds Creating a Tax Bill? at ETF Guide:

Ron DeLegge highlights a relatively unknown potential benefits of ETFs in this article, discussing the potential tax consequences of mutual fund investing. “Many investors are completely caught off guard by the tax consequences of their financial decisions,” writes DeLegge. “In many instances, people own investments that amount to nothing more than a big fat tax bill.” This article gives some tips for investors looking to improve their tax efficiency, noting that ETFs are a potentially superior investment vehicle.

Disclosure: No positions at time of writing.