investingfromtheright

I am retired and take educated guesses on all things financial.

April 27, 2007

April 27, 2007: ETF bits and pieces





"ETFs LOVE ME (Siegel)....THEY LOVE ME NOT"(Bogle)...They love me has become the winner.



Now post-op from yesterday's knee surgery, I thought it would be appropriate - given the pain med I am taking - to stick to some new ETF fund remarks that may be of interest to you. Comments are observations based upon ETF fund experts, not direct research on my part.

State Street Global Advisors launched two ETFs this week:

The SPDR S&P International Small Cap ETF (GWX) focuses on companies in developed markets with market caps below two billion dollars. Investors have become increasingly interested in small cap international funds,as they are more closely tied to to the performance of local markets and have a much lower correlation with the US market than do International funds that focus be design on large companies that have a direct or indirect presence in the United States. The expense rate is .60%.

The SPDR World ex-US ETF (GWL) will track an index of over five thousand companies from developed markets outside of the United States. The expense rate is .35%.

A new ETF from Claymore is now traded. The Claymore/Clear Midcap Growth ETF (MCG). Clear Indexes are a proprietary system that "fulfill some simple, yet desirable principles": The stocks selected are differentiated in the marketplace, Positioned to out-perform major indexes, easy to explain to institutions/wholesalers/ brokers/advisers/investors, and scalable with capacity in multiple product structures". Of note, Claer Index-owner money is going into the fund, which is nice to know. He has a stake in his product. The expense rate is .60%.

I-shares recently launched several international ETFs: BRIC Fund (Brazil, Russia, India and China), Chile Index Fund, MSCI Israel Index Fund, MSCI Thailand Index Fund and MSCI Turkey Index Fund. Go to www.ishares.com for more information on these.

I expect many more unique international ETF rollouts, as investors seek more strident diversification within their portfolio(s). Most of us are firm believers of choice and assuming risk within reason for rewards. I welcome all new funds. I will invest in a few - hopefully those I understand. Unfortunately, many individual investors will be too smart by half and buy ETFs they really do not understand (knowing Chile is a country in South America is not my idea of understanding a Chilean ETF).

At some point on the future, the equity markets will go into a bearish mode. I will recommend the pain med I am taking at present - you'll laugh in a stupor, not wallow in disappointment.

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