This Week In ETFs: March 26 Edition

by on March 26, 2010

The first quarter of 2010 is quickly drawing to a close. While these three months have seen far less excitement than the same period last year, there have been plenty of interesting developments on Wall Street and in equity markets around the globe. Greece continues to be a pesky threat to stability that won’t go away, while China’s importance to the global economy has reached new heights. It’s also been an interesting quarter for the ETF industry, with countless new launches, filings, and even some major uncertainty. Below, we offer our take on some of the most interesting reads from around the world of ETFs from the last week:

SEC To Weigh Use Of Derivatives In ETFs at

Regulation of the ETF industry has been a hot topic over the last year, with much of the attention focusing on the underlying assets owned by leveraged and inverse funds and exchange-traded commodity products. In this article, Olivier Ludwig discusses a recent statement from the Securities and Exchange Commission that could have a major impact on the way new products are approved and regulated. The SEC will be looking into “whether more protections are needed surrounding the use of derivatives, such as swaps, by mutual funds, exchange-traded funds and other investment companies in a move that’s likely to slow the launching of some ETFs,” writes Ludwig.

Who Holds The Aces In The U.S. Active ETF Space? at

One of the more divisive issues in the industry at present is the potential of actively-managed ETFs. Some believe that these products will be duds, noting the disappointing market reception they’ve received to date. Others think actively-managed ETFs will be the “next big thing” and that the widespread adoption of these products is inevitable. Shishir Nigam falls into the latter category, and in this article he takes a snapshot of the current active ETF landscape. “Recent weeks have seen the floodgates open in terms of the number of new filings for Active ETFs. Major financial players such as JP Morgan as well as mutual fund behemoths Legg Mason and Eaton Vance have declared their intent to launch actively-managed ETFs,” writes Nigam.

Does Your Portfolio Need Another Emerging Markets ETF? at ETF Database

Emerging markets investing has been one of the hottest trends of the last year. Now, more and more investors are reconsidering the traditional wisdom that has called for significant allocations to domestic equities and only minor allocations to the world’s developing economies. This “home country bias” has come under fire, and now some big names are jumping on the emerging markets bandwagon. The Hartford is now advising clients to allocate as much as 54% of their portfolios to foreign securities. In this article, Eric Dutram discusses three ETF options for investors looking to beef up the emerging markets component of their portfolio.

Three Risky ETF Areas To Avoid at

“Not every investment will make you money,” writes Gary Gordon. “And even those that do… may not have been worthy of the ETF risks you are taking.” Gordon goes on to discuss three investment areas that he views as particularly risky in the current environment, including an interesting international option.

Disclosure: No positions at time of writing.