ETF Database » PXF

Highlighting Some “EAFEC ETF” Options

Michael Johnston — Tue, 17 May 2011 14:00:30 +0000

Most investors constructing an equity portfolio using ETFs would segment the asset class into three distinct sections: U.S. equities, emerging markets, and ex-U.S. developed markets. The least exciting of those three is probably the last one, given the dismal performances turned in by Europe and Japan in recent years, as well as the significant obstacles that remain in those markets going forward. While more active traders may prefer to avoid most developed markets outside of the U.S. in the current environment, those seeking balance and embracing a long-term approach will understand the potential diversification benefits and return enhancement possibilities this asset class can offer. To many investors, the EAFE region has become synonymous with ex-U.S. developed markets. Much like the BRIC bloc, the countries included under the EAFE umbrella have very little in common from a geographic, cultural, or even economic perspective; the European, Australasian, and Far East markets are [...]

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RAFI ETF Turns Five, Celebrates Results

Michael Johnston — Wed, 12 Jan 2011 12:00:16 +0000

The PowerShares FTSE RAFI U.S. 1000 Portfolio (PRF) recently passed its five year milestone, a period during which the fundamentally-weighted product outperformed many more popular market-cap weighted ETFs. PRF debuted in December 2005, and for the five year period ended December 31, 2010 it achieved a cumulative total return of 23.1% (based on NAV). That compared quite favorably to the more widely replicated Russell 1000 Index, which added about 12% during the same period. RAFI weighting has emerged as one of the more popular alternatives to market capitalization weighting in recent years, as the ETF boom has brought increased scrutiny to the manner in which indexes are constructed and maintained. Because weightings assigned in market cap indexes are linked directly to the stock price of underlying securities, there is a tendency to underweight undervalued securities and overweight overvalued stocks. The RAFI methodology breaks the link between stock price and index [...]

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Does Your Portfolio Need A “RAFI ETF”?

Michael Johnston — Wed, 03 Mar 2010 16:12:06 +0000

In recent years, investors have begun moving away from traditional active management in favor of more cost-efficient indexing strategies. The result has been a tremendous surge in the popularity of ETFs and a serious threat to actively-managed mutual funds that have dominated the investment industry for decades. As market indexes have transitioned from performance benchmarks to investable baskets of securities, the underlying methodologies have, not surprisingly, been the subject of increased analysis and scrutiny. As many investors now know, the system used to select and weight individual components can have a major impact on bottom line returns. And there are a number of ETF issuers out there who think they’ve come up with superior alternatives to the methodologies used by the vast majority of investors. The Problem(s) With Cap Weighting Market cap-weighted indexes generally determine both component companies and the weight given to each based on the market capitalization (i.e., [...]

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Guide To Small Cap International ETFs

Michael Johnston — Tue, 12 Jan 2010 12:14:09 +0000

The tremendous increase in the number of ETFs launched in recent years has seemingly brought cheap, efficient access to nearly every corner of the globe within reach of U.S. investors. There are now funds devoted to Vietnam, Turkey, Israel, Colombia, among countless others. But while the breadth of international options has expanded significantly, the exposure offered by these funds is fairly limited, as most international exchange-traded products are dominated by mega-cap equities. Blue chip indexes may technically offer exposure to foreign markets, but their correlation with the local economy is often far from perfect. Spain is perhaps the best example of this phenomenon. The iShares MSCI Spain Index Fund (EWP) invests exclusively in Spanish companies. A look under the hood, however, reveals that nearly 45% of EWP is allocated to Banco Santander and Telefonica, two companies that are listed on Spanish stock exchanges but derive a significant portion of revenues [...]

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Who Else Wants Ex-U.S. ETFs?

Michael Johnston — Thu, 16 Jul 2009 06:05:51 +0000

After decades of flying high and shrugging off crises around the world, U.S. equity markets have fallen on some tough times. The epicenter of the mortgage crisis that evolved into a global recession has scared away many investors away from the U.S. markets, afraid that the worst is yet to come and that the “glory days” of America have passed. Investor reluctance to jump back into the U.S. markets is perhaps best evidenced by the increase in popularity of “ex-U.S.” ETFs, funds that offer exposure to a well-diversified basket of global securities but avoid any investments in the States. Over the last year, many of these funds have experienced strong fund inflows, and have significantly outperformed major U.S. benchmarks. As unemployment remains high, banks continue to close, credit markets are yet to thaw, and the future of the dollar as the world’s reserve currency sits in serious jeopardy, many investors, both [...]

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ETF Database » PXF

Highlighting Some “EAFEC ETF” Options

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RAFI ETF Turns Five, Celebrates Results

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Guide To Small Cap International ETFs

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Who Else Wants Ex-U.S. ETFs?

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