Investors seemed to realize this week what another round of quantitative easing and refinancing in Europe really means to the global economy, and all of the markets contracted. Moody’s Investors is reassessing Spain’s government debt, which might be dropped down to junk status by the end of the week, while the Central European Bank performs a number of stress tests on Spain’s financial institutions. Many macro-economic indicators have pointed to a recession in Europe since the beginning of this summer, but the Central Bank’s efforts to keep the eurozone together have staved off these effects. Even with all of these prevention efforts, now more than ever investors are wary of a second recession in Europe on the horizon. The U.S. GDP report came out earlier this week, showing that economic growth was slower than expected this quarter, with consumer spending on the rise due to the rise in prices. All these signs point to an economic contraction and a difficult autumn for investors [see 101 ETF Lessons Every Investor Should Learn].
Flexshares rolled out two new ETFs this week, TLTD and TLTE, which both compliment its already existing factor tilt index fund, TILT. Velocity Shares also made news by filing several more ETNs with the SEC, which include plans to invest in emerging markets and ways to lower volatility.
Below we outline the three best stories from around the ETF space this past week:
1. Crude Oil ETF Investing 101 at NASDAQ:
Oil prices are at their lowest point since last winter, and it doesn’t look like this trend will be turning around soon. Over time, however, the outlook is not nearly as grim since there is a growing need for oil in emerging economies, which there seem to be more of every day. While commodities investing may seem beyond the scope of some investors, Zachs.com has outlined the basic concepts behind this highly prized resource and discussed some ETFs that offer great exposure to it.
2. Are ETF Price Wars a Good Thing? at US News Money:
As the increase in demand for new and different ETFs has flooded the market with hundreds of different funds, many ETF issuers have found a new way to differentiate themselves in the market, lowering their prices. Both Charles Schwab and Vanguard have already lowered their prices and others are in the process, all to keep investors more interested in them. Roger Wohlner discusses what these price drops mean to investors and how to stay smart while being frugal.
3. 8 Dividend ETFs Yielding 5% (And More) at ETF Database:
Dividends are the most recent trend running the ETF universe; everyone likes making some fixed income for just investing. Riskier investors want to get into dividends, bringing super dividend funds to center stage. By opening up to dividend companies in growing economies, these funds may not be the stable dividend funds investors are used to, but as Carolyn Pairitz outlines, they can be a great source of income for the willing investor.
Disclosure: No positions at time of writing.