Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

139 New ETF's and Hybrids Launched During 2009, Selection of the Most Interesting

Companies / Exchange Traded Funds Jan 14, 2010 - 10:54 AM GMT

By: Ron_Rowland

Companies

Best Financial Markets Analysis ArticleYou might think the wild markets of the last year would have made ETF sponsors slow down a bit, but they kept on cranking out new products — some great, some not.


By my count, a total of 136 new exchange-traded products (ETFs, exchange-traded notes, and assorted hybrids) came on the market in 2009. At the same time, 56 ETFs and ETNs were liquidated, leaving a net increase of 80 for the year. (You can see the full list by clicking here.)

Today I want to focus on a handful of these new funds that I think were especially interesting. When I say “interesting,” it doesn’t necessarily mean I endorse these funds. As you’ll see, I think some of them are useless and potentially dangerous. Even so, they’re still interesting.

Let’s jump right in …

Interesting New ETF #1: Market Vectors Brazil Small Cap (BRF)

For years, emerging markets funds included only the local “blue chip” large-cap stocks. Now we have BRF to focus on the smaller stocks.

The fact that Brazil was the first to get its own small-cap ETF was no accident. The only other Brazil ETF, iShares MSCI Brazil (EWZ), is dominated by large energy, mining and steel companies. All of these are highly dependent on exports to the developed world.

BRF is the key to Brazil’s fast-growing domestic economy.
BRF is the key to Brazil’s fast-growing domestic economy.

BRF gives you access to smaller companies that serve Brazil’s booming domestic economy — which is growing fast, too. I’m really glad to have BRF available and hope to see similar funds covering other Brazilian markets.

Interesting New ETF #2: EGS Dow Jones Emerging Markets Financials Titans Index Fund (EMT)

EMT does not hold small-cap stocks. In fact, as the name suggests, this fund holds companies that can be considered “titans,” at least by emerging market standards.

What makes EMT interesting is that it was the first sector-based ETF to specialize in emerging markets. Banking and financial stocks from places like China, Brazil, and South Africa make up most of the portfolio. This is a fund with a lot of potential.

Interesting New ETF #3: Grail American Beacon Large Cap Value (GVT)

Never heard of GVT? Don’t feel bad; very few people have. Yet its introduction last May was a milestone in ETF history. GVT is the first actively-managed equity ETF that is a clone of a traditional mutual fund. Instead of tracking an index that changes only rarely, GVT has a manager (American Beacon) who decides what stocks to buy and sell, and when to buy and sell them.

In this regard, GVT is a lot like a conventional mutual fund — and that’s why it hasn’t attracted much attention. If you want professional management, would you rather go with an established fund or be the first to try an untested new format? GVT hopes to help you answer that question in the future.

I’m glad GVT blazed the trail. But I’m not sure the market is ready for this sort of product just yet.

Interesting New ETFs #4 and #5: MacroShares Major Metro Housing Up (UMM), and MacroShares Major Metro Housing Down (DMM)

These were quite possibly the most over-hyped ETFs ever introduced. In fact, they aren’t even ETFs. They are a strange hybrid product that is difficult to categorize. The intent was to give investors a way to trade an index of housing prices in major cities, either long or short.

No one knows what this house is really worth.
No one knows what this house is really worth.

Unfortunately, the MacroShares design was flawed in several critical ways: UMM and DMM did not track the Case-Shiller index they were supposed to follow, never attracted significant assets, and were liquidated in late December. Earlier this week, Robert Shiller was on CNBC and said “it was a mistake,” but they intend to try again.

Interesting New ETF #6: IQ Hedge Multi-Strategy Tracker (QAI)

If nothing else, this one may win the award for most mystifying fund name of the year. QAI seeks to give small investors a way to participate in sophisticated trading strategies that were previously only available in high-minimum hedge funds.

Is QAI the same thing as a hedge fund? No, not exactly. The ETF format still lacks the go-anywhere, do-anything flexibility available to the wealthiest investors.

On the other hand, that may be a good thing … we saw as recently as last year that hedge funds can lose money, too. And when they do, it tends to be a LOT of money. Nonetheless, QAI may be a good diversification tool for long-term investors.

Interesting New ETF #7: Market Vectors Vietnam (VNM)

2009 was the year that ETF investors got their first individual country access to the so-called “Frontier Markets” — countries that are just starting to develop modern economies. VNM is the first single-country ETF dedicated to a frontier market.

VNM was the first ETF to focus on Vietnam.
VNM was the first ETF to focus on Vietnam.

Vietnam, you may recall, is one of the “Next 11″ nations I wrote about in last week’s Money and Markets column. Expect a lot of volatility, but I think VNM will turn into a long-term winner.

Interesting New ETNs #8 and #9: iPath S&P 500 VIX Short-Term Futures ETN (VXX), and iPath S&P 500 VIX Mid-Term Futures ETN (VXZ)

As they used to say on the Monty Python show, “Now for something completely different.” Rather than follow market direction, VXX and VXZ are intended to follow market volatility. In plain English, they track the amount of fear in the market. When times are crazy and people are afraid, VXX and VXZ should do well.

The downside to VXX and VXZ is that they are extraordinarily complicated investments. I usually tell people not to invest in products they don’t understand. Another potential problem is that they are exchange-traded notes rather than exchange-traded funds. This carries some unique risks that I explained in detail last February.

If you have experience trading futures and options, you might find VXX and VXZ useful. Otherwise, I would leave these to the professionals.

Will 2010 bring even more interesting ETFs and ETNs? Probably so. And you can bet I’ll be watching closely.

Best wishes,

Ron

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in