This Week In ETFs: March 4th Edition

by on March 4, 2012

Equity markets seemed to take a breather this week, easing off last week’s wild rally and closing out in negative territory by the end of Friday’s trading session. Small cap equities have been under the microscope lately as the sector struggles to keep up with the recent bullish market. For some investors, this lagging should be a cause for concern as  small caps  typically perform better during market rallies. On the commodities front,  gold simply got slaughtered on Wednesday, plummeting over 4% as investors digested the latest news from the Federal Reserve Bank. Contrary to expectations, Ben Bernanke made no mention of an upcoming round of quantitative easing, which kept a tight lid on investors’ inflation expectations (see Gold Hits Resistance, Time To Worry?). 

After February’s impressive launch streak, the ETF industry slowed down its pace this week as issuers rolled out only three new products. State Street debuted two new international equity funds, while PIMCO launched its highly anticipated Total Return ETF, TRXT (see also 9 Things Investors Need To Know About The PIMCO Total Return ETF).

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

Vangaurd Cuts Price On VWO, 5 Other ETFs at IndexUniverse:

When it comes to the ETF industry, issuers are daunted with the task of packaging up the perfect mix of instruments that will offer access to every imaginable niche and corner of the investable universe, and all at the lowest possible price. Vangaurd recently cut the price of VWO along with 5 other ETFs, citing the cuts reflected asset growth for the funds. In this article, author Olly Ludwig discusses the impacts of Vangaurd’s newly slashed fees on the company as well as its competitors. 

The ETF Revolution Is Coming To 401(k) Plans at Weiss Money Network:

Over the last few years, ETFs have been gaining steam, proving to be a popular, efficient, and cheap vehicle of choice for investors.  Perhaps the biggest advantage of this product is its transparency: issuers provide investors with all the necessary information that will keep them informed on exactly what goes into each ETF. This video, featuring Ron Rowland, discusses how 401(k) administrators will soon adopt a more transparent approach as well as give their investors the option to purchase ETFs. 

Tax Reform And Dividend ETFs: Cause For Concern? at ETF Database:

In the world of ETFs, dividend funds have been attracting a lot of attention among investors with their stellar performances and huge cash inflows. Not surprisingly, investors have flocked to these juicy, high-yielding ETFs, providing them with enhanced current returns in an environment where interest rates remain essentially at rock bottom. Despite the recent success and popularity of dividend ETFs, investors should remain cautious as they might be setting themselves up for a colossal disappointment. In this article, author Michael Johnston discusses the potential dangers of these funds. 

Disclosure: No position at time of writing.