This Week In ETFs: May 13th Edition

by on May 13, 2012

After a somewhat chaotic week, stock markets fell flat during Friday’s trading session as investors digested the latest bombardment of both domestic and foreign news reports. The biggest headline of the week was the announcement of J.P. Morgan’s monumental trading blunder; a staggering $2 billion loss was incurred after the firm tried to scale back on its excessively risky derivatives positions. However, investors were able to welcome some good news on the home front, which helped offset the impact of J.P. Morgan’s losses. Unexpectedly, the U.S. consumer sentiment report came in better than expected, rising to its highest levels since 2008. On the Euro Zone horizon, investors continued to become frustrated as Greece’s socialist party reported that they failed to form a new coalition government, leading many to become even more uncertain on the outlook of the country’s debt negotiations [see also 3 ETFs For A Euro Zone Double-Dip].

The ETF industry continued its sluggish pace this week with only two new funds hitting the markets: Van Eck’s Market Vectors Emerging Markets High Yield Bond ETF (HYEM) and the newcomer issuer ArrowShares’ Dow Jones Global Yield ETF (GYLD) [see also The Cheapest Actively Managed ETFs].

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

Target Date Funds Miss The Market at Forbes:

Target date funds, like those from the iShares and db-X families, have become popular tools for investors looking to fine tune their retirement investments. These ETFs are designed to periodically shift asset allocations from equity to fixed income holdings as the years progress. Although these funds are based on fundamentally-sound principles, they do not always deliver the best results during times of market volatility. In this article, author Michael Krause outlines the shortcomings of investing in target date funds.

Merk Gold ETF To Be Redeemable In Bullion at IndexUniverse: 

Last month, newcomer Axel Merk laid down the ground work for its new physically-backed Merk Gold Trust ETF. Although there are many products in this category, the Merk Gold ETF puts a new twist on the popular safe haven investment: those who invest in the ETF will be able to redeem smaller amounts of shares for actual bullion. This article, by Oliver Ludwig, explains the fund’s intriguing new feature and what it means for the gold ETF industry.

Five ETFs For A China Bank Bubble at ETF Database:

As Euro Zone drama continues to make headlines across the globe, investors have seemingly overlooked the alarming pile up of debt China has accumulated over the past few years. After taking a closer look at the Chinese banking system, experts have uncovered several red flags that point to the country not being as economically sound as they are perceived to be. In this article, author Stoyan Bojinov discusses these concerning insights and 5outlines five ETFs for investors who are worried of the lurking China bank crisis.

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Disclosure: No positions at time of writing.