To most, cotton is a part of everyday life, a part of the textiles found in every wardrobe. But after prices surged in 2009, some investors have begun making cotton a part of their portfolio as well, and are turning to cotton ETFs as a way to gain exposure. While this soft commodity has the potential to deliver big gains and add diversification benefits, it comes with a fair amount of risk as well. And while exchange-traded products are the best way for many investors to gain exposure to this commodity, these products feature some nuances that should be considered before investing. [click to continue…]
In two weeks, the curtain will close on 2009, bringing to an end a banner year for the ETF industry that saw hundreds of fund launches and tens of billions of dollars in cash inflows. Ongoing product development and innovation continues to expand investor options, bringing almost every corner of the investable asset universe within [...]
The reasons for the rise of the ETF industry are numerous: intraday liquidity, (potentially) superior tax efficiency, and enhanced transparency relative to traditional actively-managed mutual funds have all contributed to the billions of dollars of inflows that these funds have seen in recent years. But the real attraction for most ETF investors is the reduced [...]
The reasons for the incredible rise of the ETF industry are numerous. Intra-day trading, enhanced transparency, and efficient tax features are all features that investors, individual and institutional alike, have embraced in record numbers. But perhaps the main reason why ETFs have attracted hundreds of billions of dollars in assets in recent years is the [...]
The rise of the ETF industry has made commodity investing readily available to millions of investors whose options for exposure to this “fourth asset class” were previously limited. Most of the money in commodity exchange-traded products is in diversified funds offering exposure to more than a dozen natural resources through a single security (see a [...]
Last week, Deutsche Bank announced that it will increase the fees of seven PowerShares exchange-traded funds, citing “increased costs of managing the Funds due to changing regulatory requirements.” The changes will be effective beginning January 4, and will affect five commodity funds and two currency products.
The National Stock Exchange has released the latest facts and figures on the ETF industry for the month of November, and the results continue to impress. Total ETF assets increased to $752 million, an increase of more than 6% over October results. Strong performances from equity markets played a major rise in the asset uptick, [...]
While the differences between traditional actively-managed mutual funds and exchange-traded products include several somewhat complex distinguishing characteristics, most investors focus on the relatively simple issue of expenses when making comparisons. Due to their passive nature, ETFs generally offer much lower expenses than mutual funds that can employ teams of analysts and conduct thorough research in [...]
October was another busy month for the ETF industry, with the launch of several new funds, including a handful that will compete directly with well-established ETFs and some that seek to address potential regulatory issues facing traditional commodity products. Highlights from the month included:
UBS, under its E-TRACS brand, launched a new exchange-traded note (ETN) yesterday that offers exposure to the DJ-UBS Commodity Index Total Return. This benchmark is designed to provide diversified commodity exposure based on the economic significance of each commodity. The index measures the collateralized returns on a basket of 19 commodity futures contracts representing energy, [...]
