This Week In ETFs: April 9th Edition

by on April 9, 2011

This week started off strong for equities as major indexes finished up for the first few days of trading. Unfortunately, things took a turn for the worse when an aftershock earthquake, registering at a 7.4, sent tremors throughout Japan, causing at least three documented deaths. Amid the tragedy in Japan, the conflict in Libya heated up as NATO has now become directly involved with trying to find a resolution by any means. Oil and gold prices have been skyrocketing based on these international worries, with gold setting its sights on the $1,500 per ounce mark, after eclipsing its historic high earlier in the week.

The ETF world continued its surging trend from March, as numerous products launched this week, bringing the total number of ETPs available near 1,200 [see State Street Launches Fundamental Corporate Bond ETF (CBND)]. Below we highlight three interesting articles from the always interesting world of ETFs from the last week:

‘Do-good’ SRI ETFs Invest With Principles at MarketWatch:

For some time now, exchange traded products have allowed investors to gain exposure to products that are socially responsible, but some may be surprised to find out exactly what that means. At first glance, it would seem that these funds invest in organic food producers or Christian book stores, but upon closer inspection, what investors find may surprise them. This article, by Jonathan Burton, outlines some of the holdings of various ETFs with socially responsible values, and why certain securities are either included or excluded.

The ‘T’ in ETF Is for Tax Trap at SmartMoney:

Exchange traded products have long been able to boast over their more established counterparts in the mutual funds space for several reasons; low costs, high liquidity, and strong tax efficiencies–or so many thought. Now that tax season is nearing its end, many investors may find that their ETFs are not as tax-efficient as they once thought. There are several reasons behind this, like the fact that some ETFs use derivatives to generate returns, or that there is a lot of difficult paperwork associated with these funds, especially with those that have K-1 forms. The article outlines why some funds may be less efficient than others from a tax perspective, and also which ETFs to shy away from if you want your tax season to run smoothly next year.

Seven Best ETF Performers Of Q1 (And Five Of The Worst) at ETF Database:

The first quarter of the year is behind us, and though it was one of the strongest Q1′s since 1998, many are not sad to see it go. While major indexes enjoyed strong gains over the three-month period, international instability lead to volatility in markets and individual investments alike. This article, by Michael Johnston, outlines seven of the best ETF performers from the first quarter along with five of the worst, shedding light on why these securities performed the way they did to start off the year.

Disclosure: No positions at time of writing.