This week got off to a strong start as equities enjoyed gains to close out what was a dismal August. Last month was riddled with instability as a number of factors, including a downgrade of U.S. debts, pushed markets into the red and sent volatility surging. As we entered September, investors sought to forget last month’s woes and start fresh, but all to no avail. September opened up with two down days as U.S. unemployment figures came in at 9.1% again, prompting a sell-off as many fear that the recovery has screeched to a halt. Another month with high unemployment will likely put major pressure on both President Obama and Fed Chairman Ben Bernanke, as both will make major addresses to the nation later this month.
The ETF industry saw little activity this week, as the summer months have brought something of a temporary slump to the exchange traded space [see also ETF Pipeline: Global BuyWrite ETF On The Horizon]. Below, we outline three of the best ETF stories from around the web this past week:
Making $22 Million the Easy Way at Money And Markets:
The ETF industry is well-known for its low expenses that allow for investors and institutions to keep more of their bottom-line returns. When it comes to institutions who can manage up to billions at a time, every basis point in expenses can add up greatly over a year. This article, by Ron Rowland, outlines how index providers get paid by the ETFs that track them, and how just a few basis points add up to a significant profit for doing virtually nothing extra on the year.
Building A Target-Date ETF at IndexUniverse:
While many investors stress over which particular ETF to choose for their portfolio, it is another issue altogether regarding how much of that particular fund you should hold. There are a number of tips and tricks for investors to breakdown their holdings, but sometimes these quick tips do not give enough detail as to specifics. There are a number of target-date ETFs on the market that seek to complete this process for you, but not all investors are comfortable using an ETF that makes decisions for them. This article, by Paul Britt, gives investors suggestions on how to use target-date ETFs to determine what to hold in your portfolio for the long haul.
What Slowdown? Indonesia ETFs Hold Their Ground In Global Crisis at ETF Database:
Emerging markets have had a hard time gaining traction in 2011. After several years of exhibiting high growth, the global economic crisis took its toll on a number of bellwether emerging economies like China, Brazil, and India. That combined with inflation fears across the globe has dragged a number of emerging market ETFs into the red for the year. But investors lucky enough to hold a position in Indonesia have been met with positive returns. This article, by Eric Dutram, outlines two Indonesia ETFs and explains why these funds have crushed their competition so far this year.
Disclosure: No positions at time of writing.