This week saw no shortage of major events for investors to reflect on. Near civil war conditions in Libya were a major underlying issue, as the country has yet to find a peaceful resolution between opposing forces. But the turmoil in the region did not end there; late in the week, reports from Saudi Arabia came in stating that major demonstrations were on the horizon, creating a shockwave of worry through the investing world. If those protests were to escalate, many predict oil’s price would skyrocket as Saudi Arabia is one of the most oil-rich nations on the globe. Luckily for many investors, protests did not materialize in the nation and oil prices flirted with double digit levels for the first time in a while due to this news. Finally, to close out the week for the already battered equities, a major earthquake in Japan, rating at an 8.9, left thousands missing and put the nation in a state of emergency heading into the weekend.
As this week brought more turmoil to equities around the world, we outline the best ETF stories from across the web:
XLE’s The Only Thing Working at Index Universe:
Early 2011 has been dominated by unrest in the Middle East, as numerous countries have begun to protest current government systems. Since the protests began, equities have been in a chokehold, struggling to stay afloat as each day seems to bring more disastrous news than the previous one. But since the protests have begun, one ETF has shined bright through the cloud surrounding the financial world. The Energy Select SPDR ETF (XLE) has returned approximately 9.59% since the protests began, compared to the meager gains of 1.91% from SPY. The article, written by Matt Hougan, goes on to explain why the fund has been able to produce such stellar returns despite the unstable markets.
When Your Adviser Is an ETF Newbie at The Wall Street Journal:
As ETFs have begun to surge in popularity over their mutual fund counterparts, financial advisers have been quick to add them to their clients’ portfolios. Currently, 72% of BlackRock advisors are using at least one ETF in client portfolios, while that figure comes in at 85% from registered Charles Schwab advisors. This article goes on to outline all of the potential advantages and disadvantages of adding exchange traded products to a client portfolio, and aims to educate both advisors and clients on how to properly use these powerful tools.
How ETFs Have Democratized Investing at ETF Database:
The introduction of exchange traded products brought with it a wealth of opportunities for investors. It used be that gaining exposure to certain asset classes was left to only the largest and most sophisticated investors, and that small individuals were shut out from numerous types of securities. Now, thanks to ETFs, investors can buy funds that offer exposure to; leverage, commodities, and volatility, greatly opening up the ways for an investor or RIA to construct an optimal portfolio for an extremely cheap price. This article outlines several asset classes that have been opened up by ETFs, with examples of corresponding funds for each.
Disclosure: No positions at time of writing.