This Week In ETFs: May 29th Edition

by on May 29, 2011

This week seemed like deja vu for markets as fears of another euro crisis continue to heat up with Greece at the center of everyone’s attention. Many feel that Greece will not be able to get its head above water while still a member of the euro zone, leading to suggestions of it reinstating its previous currency, the drachma, though that idea is facing significant backlash, especially from other highly indebted euro members who are trying to avoid a similar fate. Oil has continued its volatility as it trends back and forth between double and triple digit prices, frustrating those looking for a specific trend. The ETF also saw a busy week, with new issuer Russell launching a line of ten factor-based funds for investors to chew on over the holiday weekend. Below, we outline the best ETF stories from around the web this past week:How ETFs Fit Into the New Investment Landscape at Morningstar:

With the most recent recession being the worst economic crisis since The Great Depression, investors now more than ever are finding the benefits in low cost investing, making ETFs a perfect choice for asset allocation. ETFs quickly became an alternative to high-cost mutual funds that, in addition to charging high fees, also ran the risks of falling short of their respective index, as actively managed funds do. This article points out that strong management has become much more difficult to find in recent years, leaving ETFs as a quality option for index replication through a single, and efficient ticker.

Emerging Market ETFs Struggling at ETF Zone:

2010 was a break through year for emerging markets, as ETFs allowed numerous investors to enjoy the robust growth that many of these nations experienced. But now that we are well into 2011 emerging markets have begun to struggle while developed markets have outperformed these young and budding economies. This article, by Jonathan Bernstein,  discusses some of the snags that emerging market funds are running into as of late, and why their performance has been sub-par.

Emerging Market ETFs: Alternative Weighting Edition at ETF Database:

Emerging markets have been in the limelight in recent years as their stellar 2010 performance put them on the map, only to be criticized for lagging in 2011. Now that the products covering this popular space have begun to expand their horizons, investors have new and unique options for gaining exposure to emerging economies. This article, by Michael Johnston, outlines several alternative weighting strategies employed by specific ETFs, allowing investors to educate themselves on the various emerging market options that currently exist in today’s market.

Disclosure: No positions at time of writing.