ETF Edge: December 2011

Published on by on December 1, 2011

Welcome to the December edition of ETF Edge! November was rocky month for investors all over the world, with choppy trading still being the dominant theme. Much of the world is still focused on the Euro zone as pressures in Italy and other debt burdened member nations ramp up. The Chinese economy has showed some signs of slowed growth, although the government has recently stepped in to lower capital requirements for banks in an effort to increase lending and spur growth. On the home front, U.S. investors have had a difficult time digesting platefuls of positive economic data amidst all of the uncertainty stemming from Europe. Confidence on Wall Street has improved considerably thanks to solid GDP results along with better-than-expected data out of the housing and labor markets.

Despite uncertainty in the financial markets, the ETF industry goes to grow as issuers have ramped up activity on the product development front. This month has seen another wave of first-to-market product launches, showcasing the continuous innovation in the exchange-traded universe. Inside this issue, we highlight some of the developments in the industry besides new launches, including further updates on HOLDRS, tax loss harvesting strategies, as well as offering a round of actionable ideas.

Also included is an updated download of ETF performance by ETFdb Category for the year-to-date period, allowing investors to analyze the performance of their portfolio components relative to alternative funds.

Here’s a look at what’s inside this month’s ETF Edge:

  • Heard On The Street: In this section of Edge, we highlight interesting developments that are shaping the industry as well as a look at some noteworthy product advancements and performances.
  • Actionable ETF Investment Ideas: We review our recommendations from last month as well as offering trade ideas going forward, including long positions in a domestic sector ETF, a commodity producers fund and several other intriguing picks.
  • Coming and Going: November was a busy month for new product launches as over a dozen new funds hit the market. In this section, we highlight the investment thesis behind each new ETP and discuss which type of investors may be interested in some of the latest additions to the lineup.
  • ETF Milestones: In this section ETF Edge, we highlight all of the ETFs that reached three-year and five-year milestones in November. For investors and advisors facing “age restrictions” or uncomfortable investing in products without a track record, this past month saw a number of ETFs hit important milestones.
  • ETF Spotlight: In this segment we highlight an ETF that is flying under the radars of most investors, but that may present an intriguing investment option in the current environment. This month’s spotlight focuses on a one of a kind commodity producers ETF that provides investors with “pure play” exposure to a segment of the mining industry that is well positioned as the global economic recovery picks up.
  • ETF Scorecard: This section includes a performance matrix that highlights how the combination of market cap exposure and weighting methodology can lead to very different bottom line results. Also, we take a look as how U.S., developed, and emerging markets have performed over the last month.
  • Sector & Region Outlook: In this section, we take a look at pricing multiples across the U.S. economy and around the world, pointing out some apparent opportunities.
  • Inside The ETFdb 60 Index: We take a look at the biggest gainers and losers in our all-ETF index for the month of November, taking a closer look at some of the drivers for each.
  • Now Is The Season To: This section takes a look at several defensive sector-specific emerging market ETFs, which present an appealing opportunity in an otherwise uncertain environment.
  • ETF Performance Database: In the final section, we highlight year-to-date performance and expense data for all 1,400+ U.S.-listed ETFs, organized by ETFdb Category.

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