This Week In ETFs: April 23rd Edition

by on April 23, 2011 | ETFs Mentioned:

This shortened trading week saw markets take a wild ride, as a slew of data sent major indexes through major ups and downs. The week began with Standard and Poor’s downgrading U.S. debts, causing markets as a whole to endure a rough trading day on Monday. But as the week continued, positive earnings from major industry bellwethers kept markets afloat, allowing them to regain their losses, and then some. The trend of skyrocketing oil continued this week, as crude settled just under $113 per barrel, putting a pinch on consumers at the pump. Another major trend as of late has been the meteoric rise of gold, which recently broke through the $1,500 per ounce price ceiling, leaving investors to wonder just how high the precious commodity can go. The ETF world saw its most active week of the year, with well over two dozen new funds launching, further diversifying the surging exchange traded world [see iPath Rolls Out 18 “Pure Beta” Commodity ETNs].

Below we highlight three of the most interesting pieces of ETF literature from this past week:

Nothing Wrong With A Little Weight at Index Universe:

Recently, numerous indexes have come under fire for overweighting specific securities. For example, investors saw the NASDAQ-100 Index rebalance in order to account for the significant growth seen by Apple (AAPL). Along with indexes, ETPs have come under fire for the same issue, but is it really a problem? In some cases, no. This article, by Gene Koyfam, explores different exchange traded products that allocate a significant amount of assets to a single ticker, and why this is not always a bad thing for ETFs.

What’s in the iShares Silver ETF? Silver. at iShares Blog:

Over the past few years, silver has grown in popularity as an investment to hedge against unstable markets and inflation. The shiny metal has seen astronomical gains recently, leading to increased interest in silver-based ETPs, namely, the iShares Silver Trust (SLV). As with many commodity ETFs, SLV has been accused of not actually holding what it claims to; silver. Kevin Feldman, Managing Director in the iShares unit of BlackRock, debunks these myths by detailing the fund’s prospectus, and demonstrating that SLV truly does physically hold the precious metal.

Comparing Three Diversified Portfolio ETFs at ETF Database:

As the ETF world has continued to grow, many issuers have focused on product innovation, giving investors unique ways to play markets. One popular methodology that many issuers have adopted, is a diversified portfolio fund. These ETFs are something of a one-stop-shop, as investors can gain the exposure needed for an entire portfolio through a single ticker, and at a low cost to boot. This article, by Eric Dutram, outlines three diversified portfolio options, allowing investors to chose the product that best suits them.

Disclosure: No positions at time of writing.