This Week In ETFs: July 10th Edition

by on July 10, 2011

This four day trading week saw no shortage of major events that have left investors with their heads spinning. The week started off flat, until major indexes made a major push forward on Thursday, only to lose nearly all of their ground on a very weak jobs report on Friday. Jobs added for June was expected to hit a level of 125,000, and that report came in at just 18,000, just 14% of what was actually expected. U.S. chief economist, Nigel Gault, said that the current jobs report “is about as bad as anyone could imagine”. Moving over to the ETF world, events were much better, as investors were excited to see the first ever cloud computing product launch, as the new fund traded over one million shares in its first two days on market [see Up In The Clouds: First Cloud Computing ETF Debuts].

Below, we outline the three best ETF stories from around the web this week.

When ETFs Are Lenders at The Wall Street Journal:

The ETF industry has long prided itself on its transparency for investors who want to know exactly what they are buying into. From a buyer’s standpoint, you simply purchase an ETF to gain access to the basket of securities it offers, and don’t think too much about what happens behind the scenes. But some ETFs are taking the money from buyers, and using it to lend out to short-sellers in an attempt to create more value for the particular ETF. This article, by Ari I. Weinberg, explains in detail the complications that can arise from short selling, and exactly how this process works in some of today’s most popular exchange traded products.

Uncle Sam And Investing In Currency ETPs at IndexUniverse:

Prior to ETFs, investors seeking to gain exposure to foreign currencies had to deal with quick trades on complex forex accounts, making these investments virtually off-limits to the typical buy and hold investor. But as the ETF world has begun to develop, it has offered a wealth of various products to invest in a laundry list of currencies from all around the world. When it comes to choosing the correct product though, it may come down to how your fund will treat you come tax season. This article, by Dennis Hudachek, explains the various tax nuances of numerous currency ETPs to help investors pick the right ETF for their portfolio.

ETFdb Category Kings: Best Performers From First Half Of 2011 at ETF Database:

With the first half of 2011 officially behind us, many investors are starting to look back at their portfolios to see how this year has treated them so far. Most major indexes are up on the year, although the past few months have seen a significant amount of volatility in the equity space. This article, by Michael Johnston, outlines the top performing ETPs from every ETFdb Category through the first six months of the year, shedding light onto which asset classes have outperformed, and which ones have lagged behind.

Disclosure: No positions at time of writing.