Post-Holiday ETF Dreaming

December 27th at 10:00am by Tom Lydon

26782b9b477e49d3b1c4affd209c7074 The holidays are over, and we’re already poking around the tree for any missed presents and thinking about what we’d like for next year’s helping of exchange traded funds (ETFs).

Matthew Hougan at IndexUniverse drew up his wish list, which consists of:

  • A cheaper commodity fund. Expenses are at .75% annually.
  • A smarter commodity fund. Straight indexing isn’t the way to go with commodities, he says.
  • A VIX Volatility Index fund. It would have been the best-performing ETF this year.
  • More strategy products. People are ready for some complexity.
  • Frontier Market ETFs. Despite the issues regarding liquidity and foreign ownership restrictions, there’s room for exposure.

I’ve been doing some dreaming, too, and here’s my list:

  • A global wireless ETF. All we’ve got right now are the Merrill Lynch Wireless HOLDRs (WMH), which cover U.S. wireless and about 50% global. We’re going global and seeing more and more emerging markets get in on wireless technology, so where’s the ETF for them?
  • An Ireland ETF. With millions of Irish Americans (or millions of Americans who just wish they were Irish) and an expanding economy — when are we going to be able to raise a pint of stout to an ETF representing the Emerald Isle?
  • State ETFs. There are currently 21 StateShares for individual states in registration with the SEC. Will they see the light of day in 2008? The market cap for California based companies is greater than some countries – investors might be ready for that kind of investment.
  • A mortgage ETF. You just did a double-take, but hear us out: when the real estate market picks up again, the mortgage companies are going to do well — they typically do when real estate is strong. Sooner or later, we’re going to want a mortgage ETF to capitalize.
  • An ETF of ETFs. Canada has one. Why not us? We’ve predicted an ETF of ETFs for 2008, but will it actually happen? One can dream.
  • A dry shipping ETF. Global trade is growing by leaps and bounds. Now, how about a fund to capitalize?

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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