This Week In ETFs: August 21st Edition

by on August 21, 2011 | ETFs Mentioned:

This past week started off strong only to see equities dip on less-than-encouraging data form a wide range of sources. While many have been worried about the prosperity of the sluggish U.S. economy, it was the euro-zone that led this week’s downfall. A weak German GDP growth coupled with French bank worries dragged down markets all over the world as fears of a double-dip recession have been reignited. This week saw gold surge to yet another record high, as the precious metal broke well through the $1,800 per ounce barrier and kept climbing further. Meanwhile, oil prices collapsed to close the week out at about just over $82.50 per barrel, a long ways down from where it started. 

The ETF world saw plenty of activity with the launch of several new products, keeping pace with the industry’s rapid growth [see also iPath Rolls Out Dynamic VIX ETN (XVZ)]. Below, we outline three of the best ETF stories from around the web this week:

Why GLD And GDX Are Completely Unrelated at IndexUniverse:

As ETFs have grown rapidly, so too has their reach into numerous different asset classes. Now, investors can gain exposure to physical gold, gold futures, and even gold mining stocks. But when comparing the three options, there can be a large discrepancy. In 2011 in particular, the difference between popular gold fund GLD and popular gold miner GDX has been immense. Some investors are left scratching their heads as to how a gold mining ETF can possibly be in the red at this point in 2011, a stretch that has seen spot gold prices skyrocket. This article, written by Paul Baiocchi, outlines the reasons why GDX is lagging behind its physically-backed competitor.

Fast Money Halftime: Where We Are In Emerging Markets at Emerging Money:

Both 2009 and 2010 were very good to emerging markets, as a number of these ETFs experienced huge gains and outpaced the majority of the developed world. But now that the majority of 2011 is in the books, emerging markets have been singing a different tune, and struggling to hold their ground. Many have fallen prey to inflationary issues (notably Argentina and India), scaring investors off entirely. But for those who are unsure of where to allocate their funds in a time like this, there are still viable emerging market options available. This article by Tim Seymour gives a nice outline of the emerging market space today, helping investors decide where they should allocate their resources.

Using ETFs To Build A Complete Bond Portfolio at ETF Database:

Bond ETFs have seen tremendous growth in recent years, as investors have embraced the exchange-traded structure as an efficient way to establish fixed income exposure. But achieving a truly balanced and global bond portfolio isn’t as easy as purchasing one of the products that many investors view as “one stop shops.” This article begins where products such as BND and AGG leave off, highlighting other corners of the global bond market that aren’t included in these ETFs but are available through various other exchange-traded products.

Disclosure: No positions at time of writing.