ETFs

Smart Grid ETF Launched by First Trust Advisors

Amid the flurry of new ETFs coming to market this week, it appears I missed the launch of First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) on Tuesday (11/17/09). This ETF focuses on stocks in the electric energy infrastructure and distribution grid subsector. The fund will typically invest in companies engaged in electric grid, metering equipment and devices, networks, energy storage and management, and enabling software used within the smart grid infrastructure.

The underlying index uses a modified capitalization weighting with “pure play” companies receiving an 80% allocation and “diversified” companies receiving just a 20% allocation. The expense ratio…

20Nov2009 | Invest With An Edge | 0 comments | Continued

Will UNL Work Better Than United States Natural Gas Fund (NYSE: UNG)?

The official-sounding but totally private United States Commodity Funds has launched another ETF based on natural gas prices. United States 12 Month Natural Gas Fund (UNL) started trading Wednesday (11/18/09). It joins the firm’s previous offering, United States Natural Gas Fund (UNG) in an attempt to offer small investors an easy way to participate in the natural gas market.

The new fund is a response to certain structural problems of UNG that resulted in dramatic underperformance relative to its benchmark, particularly in the last few months. This chart of UNG vs. natural gas futures tells the story well. The issue is that futures contracts expire…

19Nov2009 | Invest With An Edge | 0 comments | Continued

Profit from the Falling Dollar With ETFs

The U.S. dollar is falling like a rock! And while we could always see a short-term rally, I’m growing more and more convinced that the dollar is heading much lower against other world currencies.

Look at this chart below. In just the last eight months, the U.S. Dollar Index (DXY), which measures the strength of the dollar against a basket of major currencies, plunged more than 15 percent! This week it’s breaking down even further.

One of the main reasons this trend is likely to continue is that the people who have the power to do anything about it — namely the…

19Nov2009 | Money and Markets | 0 comments | Continued

iShares Launches Its First Alpha Seeking ETF

The iShares Diversified Alternative Trust (ALT), a new multi-asset class multi-strategy ETF was launched yesterday (11/16/2009). Its stated objective is “to maximize absolute returns from investments with historically low correlation to traditional asset classes, while seeking to control the risks and volatility inherent in futures and forward contracts by taking long and short positions in historically correlated assets.”

The iShares product line has historically focused on providing “beta” exposure to various asset classes and indexes. By that, we mean its product offerings have tried to match various indexes from both a risk and reward standpoint.

The introduction of ALT is their first…

17Nov2009 | Invest With An Edge | 0 comments | Continued

The Strongest BRIC Country

I have a trick question for you, especially if you’re interested in emerging markets:

Among the four BRIC countries — Brazil, Russia, India and China — which offers the best stock market performance for American investors?

Be careful how you answer, because appearances can be deceiving, especially if you focus strictly on one year.

Looking at year-to-date results, for example, it might seem that the answer is Russia.

From the close of trading at the end of last year through the closing price this past Friday …

FXI, the exchange-traded fund (ETF) tracking China’s blue chips, is up 45.87 percent …

PIN, representing India’s major stocks,…

16Nov2009 | Money and Markets | 0 comments | Continued

Schwab Changes the ETF Landscape

I’ve been talking for years about the way exchange traded funds (ETFs) are changing the investment landscape. Yet sometimes I’m still startled to see the world change in front of my eyes. That’s exactly what happened last week when Charles Schwab launched its first four in-house ETFs.

Are these new funds revolutionary? Not really — all are core holding ETFs in areas already well-covered by other sponsors. What’s new and unusual is Schwab’s bold move to offer its online brokerage clients commission-free trading in its own ETFs.

Yes, that’s right: If you’re a Schwab client you can buy and sell any of…

13Nov2009 | Money and Markets | 0 comments | Continued

Well-Timed Launch For New Junior Gold ETF: GDXJ

Investment success often lies in timing. Van Eck Global may have hit the nail on the head with today’s introduction of Market Vectors Junior Gold Miners ETF (GDXJ). With gold bullion breaking above $1,100 earlier this week, gold stocks are flying.

GDXJ follows the also very successful Market Vectors Gold Miners (GDX), launched back in 2006. The difference lies in that word “Junior.” GDX includes large-cap global mining companies; GDXJ is focused on much smaller gold miners and prospectors. The weighted average market capitalization of GDX constituents was $15.2 billion as of 9/30/09. In the index tracked by GDXJ, it was…

12Nov2009 | Invest With An Edge | 0 comments | Continued

Three “Recovery Investing” ETFs to Consider: IYW, VCR, IYT

Last week the Labor Department reported an unemployment rate above 10% for the first time since the early-1980s. The market seemed unconcerned, closing with a gain on the day the numbers came out. Plenty of people seem to think the worst is behind us. After all, if government reports are to be believed, the Great Recession ended last quarter.

What should investors do if the market is turning around? There’s still plenty of upside potential before we hit October 2007 highs. Two sectors that performed well the past 52 weeks and are poised to continue moving upward in a recovering economy…

10Nov2009 | Invest With An Edge | 0 comments | Continued

PowerShares DB US Dollar Bullish ETF (UUP) Runs Out Of Shares

Odd things are happening in PowerShares DB US Dollar Bullish ETF (UUP). On Thursday (11/5/09) PowerShares was forced to halt trading in this normally unremarkable fund while they filed an application with the SEC to issue more shares. Like most securities, ETFs are issued under a prospectus which allows the sponsor to issue a defined number of shares. This facilitates the creation/redemption process that keeps ETFs priced in line with their net asset value.

Faced with a sudden surge of interest as the dollar reversed higher in recent days, UUP just ran out of shares. This prevented market makers from engaging in their normal…

9Nov2009 | Invest With An Edge | 0 comments | Continued

Texas ETF Begins Trading: TXF

Following last week’s launch of an Oklahoma-focused ETF, yesterday (11/4/09) the same firm introduced its Texas version. TXF Large Companies ETF (TXF) is the second offering from OOK Advisors.

Those who read my post last week about OOK will recall that I said it is essentially an energy fund in disguise. It appears that TXF is only slightly more diversified. The sector breakdown reveals that TXF has more than 63% of its assets in energy stocks. The top ten holdings of the underlying index, the SPADE Texas Index, as of 11/4/09 were: