This Week In ETFs: January 30th Edition

by on January 30, 2011 | ETFs Mentioned:

This week saw earnings season kick into high gear as markets reacted to the most recent performances of the nation’s biggest firms. Big name companies like Halliburton, Texas Instruments, and Abbott Labs all brought good news to markets with their strong marks, while others like Johnson & Johnson and Amazon disappointed investors, coming in below estimates. Tuesday’s State Of The Union address failed to stir any major indexes, as the Obama administration pushed for Americans to work together to keep our economy on the fast track to recovery. This week also saw a major milestone with the Dow Jones Industrial Average eclipsing the 12,000 mark intraday, the first time it has hit the elusive mark since the crippling recession began. However, any optimism was soon erased by the ongoing developments in Egypt where mass protests and a virtual shutdown of the nation’s government has taken place. Investors have fled the country and abandoned emerging markets in general pushing up the dollar, gold, and oil in Friday trading as many returned to a number of safe havens in order to wait out the storm.

The ETF world saw a flurry of activity as well; nearly a dozen funds launched, boosting the number of ETPs on the market further above the 1,100 mark. Below, we profile three interesting ETF articles from around the Web that caught out attention over the past week:

Investors Moving Toward ETFs, Cogent Says at Index Universe:

According to a study conducted by Cogent Research, a business consultancy based in Cambridge, investors are steadily moving away from mutual funds, and making the switch to ETFs. From the period of October 2006 to October 2010, the amount of retail investors who owned mutual funds dropped by 19%, while the number of ETF owners increased from 7% to 11%. The article goes on to give reasons for this shift, as well as specifically outlining one ETF issuer, Vanguard, as they dominate their competitors with their ultra low-cost products.

Bond ETF Pricing: Efficient or Erratic? at Morningstar:

While many investors have a firm grasp on equity markets and the ETFs that track them, there are a number of misconceptions about the fixed-income market in relation to exchange traded products. In this article, Timothy Strauts outlines reasons why he believes that bond ETFs can be more efficient than individual bonds themselves, including comments on fund size, trading volume, risk, liquidity, and the deviation from the average NAV.

Q&A With Matthew Patterson: Are Bond ETFs Broken? at ETF Database:

Matthew Patterson is the Head of Investment Strategy at Accretive Asset Management LLC, a firm dedicated to developing products that help financial advisors better serve their clients. In this interview conducted by ETF Database, Patterson outlines some of the fundamental issues with numerous fixed income ETFs, and how their BulletShares aims to resolve those problems.

Disclosure: No positions at time of writing.