This Week In ETFs: November 13th Edition

by on November 13, 2011 | Updated November 18, 2011

Stock markets started out strong this week only to be slammed during Wednesday’s trading session as conflicting news reports from overseas continued to fester European debt crisis fears. Fortunately markets saw a reversal by the end of the week, allowing investors to recover from mid-week losses. The renewed positive outlooks helped fuel triple-digit gains for the Dow Jones Industrial Average and pushed the S&P 500 and Nasdaq Composite up about 2% on Fridsay. More good news was heard this week as reports for consumer sentiment as well as U.S. jobless claims came in better than expected, allowing investors to finally focus on strong corporate earnings that have been continuously overshadowed for much of this year. With the uptick in consumer sentiment and the holiday shopping season right around the corner, investors are keeping a close eye on retail sales as most companies generate a significant portion of their profits and annuals sales in the months of November and December. In the commodities space, gold and oil edged slightly higher as euro-zone worries eased and markets showed signs of stabilization.

The rapidly growing ETF industry was introduced to two new ETFs this week. PIMCO launched two more international government bond ETFs, which followed the recent addition of their Australia Bond Index Fund last week. The new ETFs offer investors exposure to Canadian dollar-denominated bonds as well as euro-denominated bonds issued by German entities.

Below, we outline the best ETF stories from around the web this past week:

Basics of ETF Risk, Part II: Beta And Alpha at IndexUniverse:

With the increasing development of the ETF industry, it is important for investors to understand how to evaluate a given fund’s risk profile. There are several risk metrics that are used to quantify the level of risk of an ETF; for example, an investor can compare a fund’s net asset value to either its market price or to the index it tracks. Although these fundamental statistics are basic mathematical computations, the terms themselves often carry a specific connotation that alters the measure’s original meaning. In this article, author Paul Britt explains how two risk metrics, beta and alpha, really do work.

Under The Hood: A Deeper Dive Into Dividend ETFs at ETF Daily News:

With interest rates and U.S. Bond yields expected to stay at historic lows, many investors are seeking alternative ways to produce higher gains in their portfolios. One way in which to do this is through investing in higher yielding dividend securities. Investors are now looking at ETFs to provide them with the most efficient means of gaining diversified exposure to high dividend stocks. This article, by Noel Archard, takes a closer look at two high dividend ETFs and outlines each fund’s holdings and defining characteristics.

Ten ETFs No One Is Thankful For at ETF Database:

The ETF industry has grown tremendously in magnitude and popularity over the last few years and has introduced investors to a variety of new tools. Many ETFs have delivered stellar gains and remarkable performances over the last five years, encouraging the further development of the industry. However with the continuing global market turmoil, investors have witnessed several funds suffer from the impact of these poor economic conditions. In this article, author Stoyan Bojinov outlines the ten worst performing ETFs over the last five years.

Disclosure: No positions at time of writing