ETF Edge: October 2011

Published on by on October 4, 2011

Welcome to the October edition of ETF Edge! Investors have been rattled back and forth all month as the outlook on the global economic recovery remains hopeful at best. At home, investor confidence has slipped considerably thanks to handfuls of weak economic data releases, including signs of a stagnant labor market and a worrisome decrease in personal income. Rampant volatility and range-bound trading have been dominant themes on Wall Street this month. Much of the uncertainty has stemmed from the Euro zone, which remains burdened with debt and without a concrete plan of action. This month has been unforgiving for investors of all walks, even gold bugs are scratching their heads as the precious metal has faced some serious headwinds amidst the chaos.

After a bit of a slow down in August, the ETF industry is back at it again with a wave of new product launches throughout all of September. Many first-to-market instruments are gaining quite a bit of traction as investors have taken advantage of the ETF structure to access previously untapped corners of the market. Inside this issue, we highlight some of the developments in the industry  besides new launches, including the rebranding of a popular issuer as well a look at how the alternative-weighting methodologies have been holding up during this brutal month.

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:

  • Feature Article: This new section of Edge takes a closer look at how the industry has been developing over the past year and offers insights on how saturated the market has become with new products and what degree of consolidation may be reasonable to expect.
  • 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, first-to-market product launches.
  • Actionable ETF Investment Ideas: We review our recommendations from last month, with most in red territory given the dismal equity market performance. Looking forward, our ideas this month include a defensive dividend play, a short position in a tactical spread ETF as well as several other intriguing ideas.
  • ETFdb Portfolios: Our team of ETF experts comment on the performance of their all-ETF model portfolios, noting the winners and laggards over the last month.
  • Coming and Going: September was a busy month for new product launches as a wave of over 30 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 September. For investors and advisors facing “age restrictions” or uncomfortable investing in products without a track record, August 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 new offering in the fixed income space that provides previously unattainable exposure to an intriguing slice of the Chinese bond market.
  • 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 September, taking a closer look at some of the drivers for each.
  • Now Is The Season To: This section takes a look at a very defensive corner of the fixed income market that has been gaining momentum during these past weeks of market turmoil.
  • ETF Performance Database: In the final section, we highlight year-to-date performance and expense data for all 1,000+ U.S.-listed ETFs, organized by ETFdb Category.

Next: Feature Article >>>>>

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