This Week In ETFs: September 24th Edition

by on September 25, 2010 | ETFs Mentioned:

This week was yet another eventful one, bringing plenty to the table for investors to chew on. All eyes were on the Fed this week as Bernanke & Co. hinted at plans to take more aggressive steps if the economy does not get back on track soon. We also saw the government announce the official end date of the recession (some time ago), only to have investing mogul Warren Buffet publicly disagree, leaving many confused as to our current economic state. On the financial side of things, we rolled out our new mutual fund to ETF converter, a tool designed to help out investors interested in making the switch from mutual funds to ETFs [read more on the tool methodology].

Below, we highlight three of the best ETF stories from around the Web during the last week:

The Financial ETF You Wish You Owned at Magoon Capital:

When most investors think of a financials ETF, State Street’s XLF typically comes to mind. It is the largest and most traded financial ETF available, but former Claymore exec Christian Magoon thinks there may be a better option. FXO is one of the smallest broad based financial ETF available, and has raced ahead of XLF in recent months. The article outlines several factors of FXO that have allowed it to outdo the giant XLF, and outlines an investment case for the fund.

Can An ETF Collapse? at Financial Times:

With ETFs exploding onto the financial scene in the last two decades, many were quick to hop on these new investment strategies, but not everyone fully understands just how they work. This article, co-authored by Andrew A. Bogan, Ph.D., Brendan Connor, and Elizabeth C. Bogan, Ph.D., explain the issues of naked short selling ETFs, and why the authors believe an ETF could collapse and could potentially hang investors out to dry.

This article made countless ETF investors anxious about the security of their investments. Fortunately, there’s not a lot of meat to the ideas put forth in the whitepaper. In addition to our feature on why an ETF can’t actually collapse, both Index Universe and Morningstar put out excellent explanations of why Bogan’s claims are bogus.

Emerging Market ETF Investing: Beyond The BRIC at ETF Database:

Emerging markets have seen growing popularity over the years, as investors are enticed by the high growth these markets offer. While many are familiar with the BRIC nations, there are plenty of other viable, and perhaps better, options available. In this article Eric Dutram outlines the “CIVETS” bloc–Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa–providing an overview and investment case for each.

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Disclosure: No positions at time of writing.