Good Morning! A Vietnam ETF Is In Registration

There seems to be great interest in a Vietnam exchange traded fund (ETF), if the search engines are any indication. Week after week, "Vietnam" turns up as one of our top ten search words.

Market Vectors has gotten in line to meet the demand, it seems. Last week, the ETF provider filed for five new ETFs with the Securities and Exchange Commission (SEC), and one of them includes a Vietnam fund, reports the Euromoney Institutional Investor Online Network. The fund will seek to replicate the Vietnam index, which is made up of companies with market capitalizations greater than $200 million. Most of the companies in the fund are headquartered in Vietnam, or generate a majority of their revenue there.

Vietnam has been experiencing steady growth in recent times, although there has been a surge in inflation. But for the last three years, the economy has grown by more than 8%, reports Duncan Currie for the Daily Standard. Economic reforms were put in place in 1986, and since then, millions of the country's inhabitants have emerged from poverty. The country also has a wealth of natural resources, including coal and offshore oil and gas deposits - that's pure gold in these days of high energy prices.

The other ETF filings include:

• Market Vectors Global Frontier: Tracks the Global Frontier Index, which holds companies with market caps greater than $100 million.
• Market Vectors Gulf States: Tracks the Gulf Corporation Council (GCC) Index, which comprises companies with market caps greater than $100 million.
• Market Vectors Africa: Tracks the Africa Index which holds companies with market caps of more than $200 million. The companies are either headquartered there or make most of their revenue on the continent.
• Market Vectors Emerging Europe: Tracks the Emerging Europe & Commonwealth of Independent States (EE & CIS). The companies have a market cap of greater than $1090 million, and among the countries that will be seen in the funds are Kazakhstan, Belarus, Poland, Slovakia, Lithuania and Hungary.

State Street Goes Down The International ETF Road

State Street Global Advisors is going down the real estate and mid-cap road on an international scale, with new exchange traded funds (ETFs) that invest overseas.

The new funds, according to Reuters, are:

• SPDR DJ Wilshire Global Real Estate (RWO), based on 240 commercial and residential real estate companies in 23 countries, including the United States.
• SPDR S&P International Mid-Cap (MDD), based on an index of 850 companies whose market caps are between $2 billion and $5 billion. The companies are located in 25 countries, including the United States.

Their global real estate fund will join these other international real estate ETFs:

• SPDR Dow Jones Wilshire Intl Real Estate Index (RWX), down 2.7% year-to-date
• First Trust FTSE EPRA/NAREIT Global Real Estate (FFR), up 0.7% year-to-date
• iShares FTSE EPRA/NAREIT Asia (IFAS), down 7.1% year-to-date
• iShares FTSE EPRA/NAREIT Global RE ex-U.S. (IFGL), down 5.3% year-to-date

The other international mid-cap ETF is the WisdomTree International Mid-Cap Dividend (DIM), which is a dividend-paying fund. Year-to-date, it's down 2.5%.

Northern Trust Launches Three More International ETFs

Northern Trust is providing more choices for investors who want international exposure in their exchange traded fund (ETF) portfolios with the launch of three more funds.

The new funds, which cover Italy, South Africa and Singapore, are:

• S&P/MIB Index Fund (ITL): tracks the price and yield of publicly traded companies in the Italian equity markets. Stocks are traded on the Borsa Italiana and are free-float adjusted, with a market-cap weighted index.
• NETS FTSE/JSE Top 40 Index Fund (JNB): tracks the price and yield of publicly traded companies on the South African stock exchange. Focuses on the top 40 companies on the Johannesburg stock exchange.
• NETS FTSE Singapore Straits Times Index Fund (SGT): consists of 50 of the most liquid stocks, based on average daily trading volume, traded on the Singapore stock exchange.

Northern Trust began rolling out its line of international ETFs last month, and there are more yet to come, including an Ireland ETF.

Middle East Is the New Frontier for ETF Providers

The Middle East is the latest hot spot for exchange traded fund (ETF) investors.

WisdomTree has filed for a Middle East Dividend Fund, which includes exposure to Bahrain, Dubai, Egypt, Jordon, Kuwait, Lebanon, Morocco, Oman, Qatar and the United Arab Emirates. Although the prospectus does not list the weightings, Roger Nusbaum for Seeking Alpha says he found that 54% of the market caps are greater than $2 billion.

Frontier markets are the next category that will offer investors opportunity, and the Middle East is ripe for the taking. PowerShares also has a frontier fund in the making, so it is time that we see more of these funds coming to market.

Other ETFs that currently offer exposure to this area of the globe:

• iShares MSCI Israel Capped Investable Market Index Fund (EIS), up 7.6% since March 28 inception
• iShares MSCI Turkey Investable Market Index Fund (TUR), up 4.5% since April 1 inception
• SPDR S&P Emerging Middle East & Africa (GAF), down 1.3% year-to-date

Dipping Your Toes In the Water With Funds of ETFs

If you are too timid to try your luck with an exchange traded fund (ETF) but have heard about all of their benefits, there are now funds-of-ETFs to quell your curiosity while giving you a taste.

It is fair to say that ETFs are generally less expensive than their mutual fund counterparts, more tax efficient and can be flexibly traded throughout the day. But for those of you who still need convincing, many mutual funds offer ETFs within their funds.

Joanne Von Alroth for Investor's Business Daily reports that these funds, when they were first launched, didn't seem to have a clear goal and that doomed them. One of the earliest of their type closed in 2004.

AdvisorOne Amerigo (CLSAX) and the 3-month-old Aston/Smart Allocation are no-loads with expense ratios under 1.5%. Investors are required to dole out 2.27% of assets a year for expenses and foot the underlying ETF fees.

Wouldn't it just be easier and more efficient to invest in a broad-based ETF, and save yourself some management fees?

New ETF Provider Comes Bearing International Real Estate Fund

A new global real estate exchange traded fund (ETF) is in town, along with a new ETF provider.

The Cohen & Steers Global Global Realty Majors (GRI) from ALPS Advisors provides exposure to the global real estate market with 75 companies in developed markets including North America, Asia Pacific and Europe. It rebalances quarterly and has an expense ratio of 0.55%.

This fund joins a number of other international real estate ETFs, including:

• iShares S&P World Ex-US Property Index (WPS), down 4.6% year-to-date
• SPDR DJ Wilshire International Real Estate (RWX), down 1.2% year-to-date
• WisdomTree International Real Estate Fund (DRW), down 10.2% year to-date

The U.S. housing crisis has been taking its toll on the markets of other countries lately, but perhaps when this sector experiences a rebound here, it will spread overseas.

Morgan Stanley's New ETNs Go Long Or Short On The Euro

 

Morgan Stanley has joined the exchange traded note (ETN) game, with the announcement of two new notes, based on the euro. They're both now trading on the NYSE Arca.

The new notes are:

• Market Vectors Double Short Euro (DRR)
• Market Vectors Double Long  Euro (URR) 

These notes seek to provide leveraged directional market exposure to the euro and U.S. dollar exchange rate. At the same time, this is Morgan Stanley's first crack at the leveraged index world.

URR is aimed at providing two-times leveraged, long investment in the euro. For every 1% strengthening of the euro relative to the U.S. dollar, the level of the Index will generally
increase by 2%, while for every 1% weakening of the euro relative to the U.S.
dollar, the index will generally decrease by 2%.

DRR is designed to two-times leveraged short investment in the euro. For every 1% weakening of the euro relative to the U.S. dollar, the level of the index will generally increase by 2%, while for every 1% strengthening of the euro relative to the U.S. dollar, the index will generally decrease by 2%.

Today, the dollar has declined against most major currencies, reports Madlen Read for the Associated Press.

Investors Might Take a Shine to New Platinum ETNs

Investors have been salivating for an exchange traded product that gives access to platinum, and now UBS is granting it with two new exchange traded notes (ETNs).

The E-TRACS UBS Long Platinum (PTM) and the E-TRACS UBS Short Platinum (PTD) will be listed on the New York Stock Exchange.

Barclay's sought to launch a platinum exchange traded fund (ETF) awhile back, but the platinum industry voiced opposition, reports Heather Bell for Index Universe.

The new ETNs get around this concern by likely being based on futures contracts, which are typically settled in cash. The supply and demand of platinum wouldn't be immediately affected.

Until now, the only way to get exposure to platinum in the United States was through the Elements MLCX Precious Metals Index (PMY), which follows a benchmark of precious metals that includes platinum.

Platinum closed at $1961 an ounce yesterday, and is trading higher today.

ProShares Wins The Race To Market With Inverse Bond Fund

ProShares wins the race to be the first inverse bond exchange traded fund (ETF) in the world. Deutsche Bank was hot on their heels, after announcing plans a day earlier to issue a new ETF in Europe that short Eurobonds, says Murray Coleman for Index Universe.

The two new ETFs to hit American markets are:

• ProShares UltraShort Lehman 7-10 Year Treasury (PST)
• ProShares UltraShort Lehman 20+ Year Treasury (TBT)

Both ETFs are set up to measure the inverse of their daily performance of their underlying index. Remember, with a bond fund, the interest earned on cash and financial instruments figures into the overall performance results. Many investors are looking to ProShares' inverse bond ETFs to neutralize market valuations and as portfolio protection against price fluctuations.

One advantage of a fund that automatically shorts an index is that investors can only lose what they put in. By taking short positions in long ETFs, the losses can go unchecked.

To learn more about long/short ETFs, check out our interview with ProFunds' CEO Michael Sapir.

Global Asset Allocation Wrapped In An ETF

Asset allocation is an important factor within a portfolio, and now Invesco PowerShares offers this strategy all wrapped up in an exchange traded fund (ETF). Their latest ETFs are designed to give investors access to long-term, core asset allocation strategies.

The newest portfolios are based on three distinct risk profiles, targeting a specific percentage of an investment in equity and fixed-income securities. Balanced, balanced growth and growth are set for a May 15 debut on the NYSE Amex, according to PowerShares.

Asset allocation is an important consideration for any investor - it helps one maintain their desired risk/reward profile. Depending on your desired level of risk and long-term goals, investments are spread over several types of asset classes, including equities, fixed-income and non-equity correlated assets.

The anticipated fund names and ticker symbols are:

• PowerShares Autonomic Balanced NFA Global Asset Portfolio (PCA)
• PowerShares Autonomic Balanced Growth NFA Global Asset Portfolio (PAO)
• PowerShares Autonomic Growth NFA Global Asset Portfolio (PTO)

New ETN Line Gives Broad Range of Commodity Exposure

UBS rolled into the exchange traded note (ETN) business last month with a line of commodity notes.

The UBS E-TRACS CMCI Total Return (UCI) is designed to track the UBS Bloomberg Constant Maturity Commodity Index Total Return. The index measures the collateralized returns from a basket of 28 commodity futures contracts ranging from three months up to three years.

The subsets are:

• UBS E-TRACS CMCI Agriculture (UAG), 0.65% expense ratio
• UBS E-TRACS CMCI Industrial Metals (UBM), 0.65% expense ratio
• UBS E-TRACS CMCI Livestock (UBC), 0.65% expense ratio
• UBS E-TRACS CMCI Silver (USV), 0.40% expense ratio
• UBS E-TRACS CMCI Gold (UBG), 0.30% expense ratio
• UBS E-TRACS CMCI Food (FUD), 0.65% expense ratio
• UBS E-TRACS CMCI Energy (UBN), 0.65% expense ratio

The futures contracts are diversified across five constant maturities, and they roll on a daily basis, as opposed to monthly. The aim of daily rolling is to stay as close to the spot price as possible instead of getting into a contango mess.

The industrial metals note gives investors exposure to copper, zinc, aluminum, nickel and lead. Energy has exposure to crude oil, gasoline, natural gas and heating oil.

The food note has exposure to live hogs, orange juice and coffee, among other things.

Is Three Times Performance Going to Be a Charm for New ETFs?

A firm better known for its leveraged index mutual funds has filed for 36 exchange traded funds (ETFs) with the Securities and Exchange Commission (SEC) that raise the stakes.

The ETFs from Direxion Funds would deliver three times the performance (or three times the inverse) of their underlying indexes. This is a new twist, since no ETF currently offers anything more than double the exposure, leveraged or short.

The funds will cover a variety of asset classes that include sectors, international regions, real estate and even commodities, reports Heather Bell for Index Universe. The prospectus says the management fees for the funds will be 0.75%.

ProShares and Rydex have no doubt proved that some investors want leveraged and short ETFs, but is this going too far with the concept? For financial advisors and retail investors, double exposure might be plenty. We're concerned that this might be a case of too much octane.

Are ETFs going to be like those razors that hit the market with one more blade every time a new one comes out? Investors should be careful - too many blades, and you're likely to get cut.

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Four New ETNs Hit The Market, Thanks to Deutsche Bank

Deutsche Bank launched four new exchange traded notes (ETNs) with a twist, coming out ahead of rivals such as ProShares.

The new broad-based ETNs focus on agriculture and commodities, but come in long, double-long, short and double-short varieties, rounding out a complete set for a commodities index, reports Murray Coleman for Index Universe.

The new notes are tied to the Deutsche Bank Liquid Commodity Index and the Deutsche Bank Liquid Commodity Index-Optimum Yield.

• DB Commodity Double-Short (DEE)
• DB Commodity Double-Long (DYY)
• DB Commodity Short (DDP)
• DB Commodity Long (DPU)

The securities will be issued in $25 denominations. As their name implies, these new funds give investors long and short exposure to the agriculture and commodities sector. All four notes are senior unsecured obligations of Deutsche Bank.

These notes join Deutsche Bank's launch of ETNs allowing investors to go long or short on gold and agriculture.

The newest additions to the ETN family add to the growing list of launches for 2008.

Foreign Currency ETF Offerings to Pour In Next Month

Exchange traded fund (ETF) providers Dreyfus and WisdomTree are teaming up to offer five actively managed foreign currency ETFs next month.

They will include the WisdomTree Dreyfus Euro Fund, Japanese Yen Fund, Indian Rupee Fund, Chinese Yuan Fund and the Brazilian Real Fund. These will be the first of 12 to be launched under the WisdomTree Dreyfus banner. Two others include two U.S. current income funds, reports Mariana Lemann for Ignites.

Later this year, more funds will launch and cover the Australian dollar, British Pound sterling, Canadian dollar, New Zealand dollar, South African rand and South Korean won. Several of these funds will be a first in currency ETFs.

When they launch, they'll join a growing lineup of both currency ETFs and exchange traded notes (ETNs), including:

• CurrencyShares Euro Trust (FXE)
• CurrencyShares Japanese Yen Trust (FXY)
• Market Vectors Indian Rupee (INR)
• Market Vectors Chinese Renminbi (CNY)
• PowerShares DB G10 Currency Harvest (DBV)

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Take Off Your Shades And Look Directly At The Solar ETFs

The recent rise in energy consciousness has given way to more solar energy-focused exchange traded funds (ETFs).

The latest slew of funds invest in specific technologies, and Matthew Hougan for Index Universe analyzes the two ETFs providing access to the solar market.

Claymore/MAC Global Solar Energy Index (TAN) and the Market Vectors Solar Energy (KWT) tout the same expense ratios at 0.65% and offer global solar energy exposure.

Both indexes aim to proved global exposure to the solar energy market. They were also constructed with "screens": TAN requires components to generate at least one-third of their income from the solar industry. Companies that generate more than 66% of their revenues from solar are weighted at their full market cap. Companies between 33% and 66% are weighted at half their market cap.

KWT tracks the Ardour Index and takes a simpler approach. Companies must generate 66% of their revenue from solar energy to be included at all. KWT's components are all pure plays.

There's no way to tell which fund will ultimately do better, though, and the case could be argued either way. In a fund made entirely of pure plays, those companies could lose out to larger conglomerates. It could be more sensitive to changes in solar, making the potential for returns (and losses) greater. TAN could be less volatile, with broader exposure and more upside potential.

PowerShares Registers for Frontier Countries ETF

The possible choices for exchange traded fund (ETF) investors interested in the Middle East/Africa region continues to grow.

On Monday, Invesco PowerShares registered to launch a new ETF that would focus on companies domiciled in 10 Middle Eastern and North African countries, reports Jeffrey Ptak for Morningstar.
 

The index is not yet named and the ETF is pending. But it will be called the PowerShares MENA Frontier Countries Portfolio. Around 50 companies will be part of the underlying index and a majority of the assets will be in Nigeria, Egypt, Morocco, Oman, Lebanon, Jordan, Kuwait, Bahrain, Qatar and United Arab Emirates.

This puts PowerShares in a race with Claymore for an ETF tracking frontier markets. The Claymore/BNY Frontier Select DR Index Fund would track an index of 26 companies from a universe of 40 frontier markets.

When they launch, the ETFs will join the SPDR S&P Emerging Middle East and Africa (GAF). The fund is allocated primarily in South Africa, at 55.3%. It also has weightings in Israel (21.4%), Morocco (7.1%), Egypt (5.7%) and Jordan (3.6%). Year-to-date, the fund is down 2.3%.

iShares last month also gave more Middle East exposure to investors with the launch of the iShares MSCI Israel Capped Investable Market Index Fund (EIS).

Is It Hot In Here, or Is It Just Solar ETFs? (Updated)

A software glitch at the American Stock Exchange held up the launch of the newest solar exchange traded fund (ETF) today.

When it does launch, the Market Vectors Solar Energy (KWT) will the Claymore/MAC Global Solar Energy Index (TAN) as the only two pure plays on the fast-growing sector. 

KWT is based on the Ardour Solar Energy Index (SOLRX), which has worldwide exposure to 26 companies that derive at least 66% of their revenues from solar energy. The fund comes with an expense ratio of 0.65%. The fund is most heavily weighted in Germany, with 36.7% of its assets allocated there. China is second, with 24.3% of assets.

TAN has 25 components, with 25% of them based in the United States. The fund also has an expense ratio of 0.65%.

Solar energy accounts for less than 1% of global electricity, so the sector has plenty of room for growth.

What's Next for the MacroShares ETFs? Version 2.0

Last week, the price of oil topped $111 for three consecutive days, setting off a termination trigger for two unusual exchange traded funds (ETFs).

The last trading day for MacroShares Oil Down (DCR) and MacroShares Oil Up (UCR) will be June 25 and will liquidate the week after that.

So, what's next? MacroShares is not going away. In fact, the company considers their up/down oil funds a success, with $300 million in assets, reports Mathew Hougan for Index Universe.

They'll be issuing a new round of Macros with the starting price set at $100 a barrel. The prospectus for the down trust is here, and the prospectus for the up trust is here.

Hougan wonders if people will bite on these new funds, as opposed to just going after the other oil-related ETF products out there.

Meanwhile, Hougan reports that the MacroMarkets people are developing a paired trust tied to medical cost inflation, as well.

Will the Active ETFs Do a Belly Flop or Fly? You Will Decide

Was the first actively managed exchange traded fund (ETF) a good idea after all? Chuck Jaffe doesn't think so.

The Bear Stearns Current Yield (YYY) debuted on March 25, and it's not going to look any better as the active ETF sector grows, Jaffe says. His problem is not with the fund's troubled namesake, though. He questions whether the fund is going to live up to anyone's expectations.

The fund purchases short-term debt to generate its income in the form of government securities, corporate debt, mortgage-backed and asset-backed securities, municipal bonds, foreign debt obligations and so on. The fund comes with an expense ratio of 0.35%, competitive when compared with the average money market fund expense ratio of 0.47%.

But is it going to deliver superior performance? Jaffe and Jeff Ptak at Morningstar think not: making trades in the fund would erode any expense advantage. One researcher says the fund is not much different than holding cash.

The other recent entrants into the actively managed ETF playing field are:

• PowerShares Active Low Duration Fund (PLK)
• PowerShares Active Mega Cap Fund (PMA)
• PowerShares Active AlphaQ Fund (PQY)
• PowerShares Active Alpha Multi-Cap Fund (PQZ)

Only time will tell with these funds as they build up track records. Investors are watching for performance over time, and if they deliver, perhaps the market will go for this new breed of ETF.

Menu of Agriculture ETFs and ETNs Expands

Some crops might not be growing, but lots of agriculture-focused exchange traded funds (ETFs) and exchange traded notes (ETNs) are sprouting up.

Deutsche Bank launched a smörgåsbord of ETNs this week, just in time for the agriculture craze.

These new products maximize the potential returns an investor can realize in the agriculture marketplace. Deutsche Bank's line of ETNs are designed as leveraged plays on the PowerShares DB Agriculture (DBA) ETF, reports Trang Ho for Investor's Business Daily:

• DB Agriculture Double Short (AGA)
• DB Agriculture Double Long (DAG)
• DB Agriculture Short (ADZ)
• DB Agriculture Long (AGF)

DBA is up 19.9% year-to-date.

There's also the MLCX Livestock Elements ETN (LSO), which tracks futures in lean hogs (30%) and live cattle (70%). Lehman Brothers stepped into the arena in February with the Opta Lehman Brothers Commodity Index Pure Beta Agriculture Total Return ETN (EOH), which gives exposure to coffee, cotton and sugar.

Hungry for more? There are also a number of other agriculture-centric ETFs and ETNs on the menu. Among them:

• Market Vectors Global Agribusiness (MOO), up 11.1% year-to-date
• MLCX Grains Index ETN (GRU), up 1.3% since Feb. 15 inception
• iPath Dow Jones AIG-Agriculture ETN (JJA), up 12.2% year-to-date
• E-TRACS UBS Bloomberg CMCI Food Index ETN (FUD), up 5.1% since April 4 inception

Just In Time for Warm Weather, Claymore Launches Solar ETF

While there are several clean energy exchange traded funds (ETFs) out there, none of them have focused solely on one aspect of the sector until now.

Claymore this morning launched the Claymore/MAC Global Solar Energy Index (TAN) on the NYSE Arca. Claymore President Christian Magoon told us the potential for growth in the solar industry is huge. Currently, it accounts for less than 1% of global electricity.

PowerShares Launches Its Actively Managed ETF Line

The long-awaited actively managed exchange traded funds (ETFs) from Invesco PowerShares are here. They're billed as the industry's first three actively managed equity ETFs, and they began trading on the NYSE Arca today.

All of the funds' holdings are to be disclosed daily on the fund's website. They are:

• PowerShares Active Low Duration Fund (PLK): Invests in a portfolio of U.S. government, corporate and agency debt securities. It seeks to outperform the Lehman Brothers 1-3 Year U.S. Treasury Index. The unitary fee will be 0.29%.
• PowerShares Active Mega Cap Fund (PMA): Invests primarily in the equity securities of mega-caps. It seeks to outperform the Russell Top 200 Index. The unitary fee will be 0.75%.
• PowerShares Active AlphaQ Fund (PQY): Invests in a portfolio of about 50 securities listed on the Nasdaq Global Market. It seeks to outperform the Nasdaq 100 Index, and the unitary fee will be 0.75%.
• PowerShares Active Alpha Multi-Cap Fund (PQZ): Invests in about 50 securities selected according to a methodology developed by AER advisors. It seeks to outperform the S&P 500. Its unitary fee will be 0.75%.

The unitary fee is the one fee used to cover expenses incurred in connection with managing the portfolio.

Bear Stearns launched the first actively managed ETF in late March, Bear Stearns Current Yield Fund (YYY).

Everyone, Welcome the New ETF Provider Northern Trust (Hi, Northern Trust)

The exchange traded fund (ETF) industry has a new provider. It's Chicago-based Northern Trust, and the launch of their funds have been anticipated since last winter.

Murray Coleman for Index Universe reports gives the lowdown on the first batch of funds, which will have an expense ratio of 0.47%:

• NETS FTSE 100 Index Fund (LDN): Invests in the largest companies by market-cap on the London Stock Exchange.
• NETS S&P/ASX 200 Index Fund (AUS): It will compete against the iShares MSCI Australia (EWA), which is one of the oldest international ETFs around.

Four more ETFs will follow soon:

• NETS DAX Index Fund (DAX): Tracks the major exchange in Germany.
• NETS TOPIX Index Fund (TYI): Covers Japan
• NETS CAC-40 Index Fund (FRC): Tracks France's market
• NETS Hang Seng Index und (HKG): Follows stocks in Hong Kong

Missing from the list are Northern Trust's anticipated entries into the all-world ETF segment, which was recently joined by both Vanguard and iShares.

The timing of the France-focused single country ETF could bring good things, as France's economy has been holding up well against the international credit crisis. Helen Beresford for Thomson Financial News reports that on the flip side, the GDP growth forecast was cut by the government to between 1.7-2%. The iShares MSCI France (EWQ) is up 8.7% in the last month, although it's down 5.4% year-to-date.

The German economy has been growing, but it needs to make changes if that growth is going to continue. Paul Carrel for Reuters reports that the German economy needs reform to refresh the labor market and education systems, both vital parts of the country's economy.  The iShares MSCI Germany (EWG) is up 6.9% in the last month, but it's down 9% year-to-date.

New Heating Oil ETF Captures White-Hot Energy Sector

There's another entry in the category of energy commodities-focused exchange traded funds (ETFs), this one covering heating oil.

The United States Heating Oil Fund (UHN) holds futures contracts for the commodity, reports Murray Coleman for Index Universe. It's made up of near-month contracts set to expire, except when the contract is within two weeks of expiration. In that case, it invests in the next month.

One difference in this fund is that it takes advantage of something called "crack spreads," which measure the difference between profit margins when a barrel of oil is first handled to when it enters its final incarnation as things like heating oil or gas for your vehicle. Crack spreads are at historically high levels, and Coleman says that heating oil spreads on the New York Mercantile Exchange are running as high as $22.50.

This new fund is just the latest to cover the white-hot energy sector. In February, the United States Gasoline Fund (UGA) was launched - the first of its kind. The provider of UHN and UGA, Victoria Bay, also offer the United States Oil Fund (USO), United States 12-Month Oil Fund (USL) and United States Natural Gas Fund (UNG).

Speaking of "historic highs," the cost of a barrel of oil isn't getting any cheaper, reports Kenneth Musante for CNNMoney. The slick stuff surged to a new record today, hitting $112.05 a barrel, topping the previous intraday record of $111.80 set on March 17.

The jump came when the Energy Information Administration said stocks fell by 3.2 million barrels. Analysts had been expecting a jump of 2.4 million barrels. The good news, according to the publisher of an industry newsletter, is that it's a one-off to be corrected in the next two reports.

Gas is hitting new highs, too: $3.43, says AAA. Blame that on the seasonal purge of winter-grade fuel.

Core Index ETFs Have It All

Summer is on the way, so isn't it time to do some work on your core...core exchange traded funds (ETFs) within your portfolio, that is.

The underlying indexes within these ETFs are blended with United States, developed foreign and emerging foreign markets, explains Roger Nusbaum for Seeking Alpha.

Examples of core ETFs include Vanguard All-World ETF (VEU) and iShares All-World (ACWI). Northern Trust (NTRS) has one on the way. These ETFs have the purest exposure because of the blend of attributes and components. They're interesting products, and it will be fun to see how they perform

These funds have him wondering just how lazy a portfolio can be while still adding value. In addition to buying the world, he would add an absolute return fund to smooth out the bear markets. An investor could do okay averaging 8% from the all-world fund and 5% from the absolute (provided you're saving, too).

iShares Seeks to Continue Its World Travel With New ETFs In Registration

Two weeks ago, iShares launched more single-country exchange traded funds (ETFs), but they're not done traveling around the world just yet.

According to Matt Hougan for Index Universe, the provider filed with the Securities and Exchange Commission (SEC) for yet more funds, including:

• iShares MSCI Emerging Markets Eastern Europe
• iShares MSCI All Country Asia ex-Japan
• iShares FTSE China (HK Listed)

The Eastern Europe fund will join the similar SPDR Emerging Europe (GUR) as funds for the region. iShares already has one China fund, the FTSE/Xinhua China 25 (FXI). The new fund will be broader, with about 80 components.

Meanwhile, Claymore has filed with the SEC to create an ETF tracking frontier markets. There is no frontier market ETF available on U.S. exchanges at the moment, but Europe recently launched some, so the heat is on. The Claymore/BNY Frontier Select DR Index Fund would track an index with 26 companies from a universe of 40 frontier markets.

Such a fund would allow investors to access the farthest corners of the world, such as Vietnam and Cambodia.

UBS Enters Commodities Arena With ETN Line

UBS is getting into the exchange traded game with commodities exchange traded notes (ETNs).

Last week, the firm launched eight ETNs focused on commodities, and the plan is to venture into other asset classes, reports Jesse Emspak for Investor's Business Daily. The UBS Bloomberg Constant Maturity Commodity Index rolled out last year, and the ETNs will track it. The bank chose to go with notes rather than funds because they're cheaper to issue and simpler to structure.

The index focuses primarily on energy, followed by industrial metals and agriculture. The latest ETNs focus on metals, agriculture, gold, silver, livestock and food, as well as a broad based set of commodities. The notes will have expense ratios of about 0.65%.

A number of funds offer a commodities play, including these exchange traded funds (ETFs):

• PowerShares DB Agriculture (DBA)
• Market Vectors Global Agribusiness ETF (MOO)
• PowerShares DB Base Metals (DBB)
• iPath Dow Jones AIG Commodity Index (DJP)
• PowerShares DB Commodity Index Fund (DBC)
  

The Newest Members Of PowerShares ETF Family

Exchange traded fund (ETF) provider PowerShares announced two new funds to be listed on NASDAQ. The company states that this will bring the ETF family to more than 110.

The new ETFs are:

• PowerShares NASDAQ NextQ Portfolio (PNXQ)
• PowerShares FTSE NASADQ Small-Cap Portfolio (PQSC)
  

PNXQ is based on the NASDAQ Q-50 Index which tracks the performance of 50 securities that are next in line to replace the securities currently included in the NASDAQ-100 index. PQSC is based on the FTSE NASDAQ Small-Cap index, designed to track the performance of the smallest 10% of companies in the FTSE NASDAQ index universe of listed companies ranked by market capitalization.

Vanguard Wants to Put Its Arms Around the World With New ETF

On the heels of iShares' new all-world exchange traded fund (ETF), Vanguard is trying to enter the fray with its own similar kind of fund.

They've registered with the Securities and Exchange Commission (SEC) for the Vanguard Global Stock Index Fund, which would offer three share classes: investor shares, institutional shares and ETF shares. It's anticipated to launch in the second quarter of 2008.

The fund aims to track the FTSE All-World Index, a market-cap weighted index of large- and mid-cap global stocks in 48 countries. About 55% of the index will be made up of stocks outside the United States.

Vanguard's new fund will join the iShares MSCI ACWI Index Fund (ACWI) as the first two true all-world ETFs. The country breakdown for the iShares fund has the as its top five countries the United States, 41.8%; the United Kingdom, 9.6%; Japan, 8.6%; France, 4.7%; Germany, 4.1%.

Across the sectors, it's most heavily weighted in financials at 22.5%. Energy is 11.7% and Industrials are 11.2%. Exxon Mobil (XOM) is the largest constituent, representing 1.6% of the holdings. General Electric (GE) is 1.2%.

It'll be interesting to compare the two funds side-by-side once Vanguard's is up and running.

New Carbon Emissions Indexes Join Clean Energy ETFs

The green mentality has prompted Merrill Lynch to roll out a set of indexes focused on carbon emissions credits, in the hopes that someday an exchange traded fund (ETF) or exchange traded note (ETF) will track them.

Jesse Emspak for Investor's Business Daily reports that the indexes track the value of carbon emissions credits. In the European Union, companies are given credits that can be traded in a way that's similar to futures and options. Buying more means a company can emit more, whereas buying less means emitting less.

The base index is the MLCX Global CO2 Emissions Index. It tracks emissions under the European Union's emissions trading scheme and the Kyoto Protocol.

XShares Advisors also have an ETF in registration called AirShares. It will track carbon credits trading in Europe, but there's no word as to when it will begin trading.

Green and clean energy ETFs performed well last year, but have had a rough time year-to-date, but some experts believe that the prospects for the sector are good and recommend investors take a long-term view when it comes to these vehicles.

Green ETFs already in the game:

• PowerShares WilderHill Clean Energy (PBW), down 27.2% year-to-date
• PowerShares Global Clean Energy (PBD), down 17% year-to-date
• Market Vectors Global Alternative Energy (GEX),  down 18.9% year-to-date

Solar, Clean Energy ETF Investors Need to Take Long View

There are two new exchange traded funds (ETFs) in registration that offer exposure to a fast-growing area of the clean energy market. 

Van Eck and Claymore are in line to offer solar energy ETFs. Claymore's Global Solar Energy ETF will track the Melvin & Company index of 25 stocks that are selected based on the  importance of solar energy within the company's business model.

Seeking Alpha Hard Assets Investor reports that Van Eck Market Vectors-Solar Energy ETF will track the Ardour Solar Energy Index. The index is composed of 25 stocks selected based on market cap, liquidity and revenue. The fund is expected to launch this month. Investor interest in solar is strong, giving the solar and clean tech sector a positive outlook over the long haul after once being considered fringe players.

Smart Money's Rob Wherry adds that these funds are joining the ranks of PowerShares WilderHill Clean Energy (PBW), PowerShares Global Clean Energy (PBD) and Market Vectors Global Alternative Energy (GEX). These types of ETFs have sputtered so far this year, with the funds down 28%, 19%, and 21%, respectively.

Consider that the United States is still in the early stages of solar interest and development. But as the cost of more traditional energy rises, this sector is likely to continue generating interest.

Consider these points in a Scientific American article by Ken Zweibel, James Mason and Vasilis Fthenakis:

• A massive switch to solar power plants could supply 69% of the United States' electricity and 35% of its total energy by 2050.
• $420 billion in subsidies from 2011 to 2050 would be required to fund the infrastructure and make solar power cost-competitive.
• The energy of the sun striking the earth is powerful: 40 minutes of sunlight is equivalent to global energy consumption for an entire year.

Nuclear Power's Reputation Precedes It, But Will That Hurt ETFs?

Nuclear power and nuclear-focused exchange traded funds (ETFs) have been pushed to the forefront as concerns about the environment and the rising cost of energy pick up steam. But not everyone is so sure nuclear power can overcome its bad reputation.

Last week, the 29th anniversary of the Three Mile Island meltdown was marked. The incident also marked a death blow to nuclear power in the United States and changed public perception of the industry, reports Keith Johnson for the Wall Street Journal.

Debate is raging about the future of nuclear power here: California Gov. Arnold Schwarzenegger says Three Mile Island is just a bogeyman intended to scare people away from nuclear power, while others are concerned that the question about how to deal with radioactive waste hasn't been fully dealt with.

Either way, the nuclear power industry appears to be heating up. Seventeen power companies are making plans to build more than 30 nuclear plants, reports Morning Edition. In Tallahassee, Florida, the go-ahead was given to build the state's first nuclear plant in decades.

Between the rising cost of natural gas, oil and an ever-growing population, there are many who are looking to nuclear energy as the solution.

There are two nuclear energy ETFs to take advantage of this growing sector:

• Market Vectors Global Nuclear Energy (NLR)
• PowerShares Global Nuclear Energy Portfolio (PKN), expected to launch on April 3

First Actively Managed ETF Off to a Slow Start

Now that the first actively managed exchange traded fund (ETF) has debuted, let's check in with it.

On Tuesday, Bear Stearns (BSC) beat all other providers to market, with its Bear Stearns Current Yield Fund (YYY). On its first day of trading, 26,000 shares changed hands. On Wednesday, things had cooled considerably: 2,600 shares traded. Thursday saw 3,000 shares trade, reports David Wilson for Bloomberg.

One question is whether the drop in trading volume has more to do with a lack of investor interest in actively managed ETFs, or concern about the future of Bear Stearns overall. The question can really only be answered when more active ETFs come to market.

The ETF has $50 million in assets and owns debt with an average maturity of 180 days.

In keeping with the ticker symbol, Wilson has three "whys?" to ask regarding why the firm launched this ETF under current conditions:

• Why did Bear Stearns get to go first?
• Why start a bond fund when equity funds dominate the line-up?
• Why introduce fund that inhibit managers ease of trading habits while they try buy-and-hold strategies? Buy-and-hold can be more rewarding over time due to cost efficiency.

Providers waiting in the wings to launch their own actively managed ETFs include PowerShares, Barclays, State Street, Vanguard, and WisdomTree.

iShares Breaks New Ground With Israel, Turkey and Thailand ETFs

Barclays Global Investors is breaking new ground with their iShares exchange traded funds (ETFs): they're the first to launch funds covering Israel, Thailand and Turkey.

In addition to these funds, iShares has also launched two global funds. One covers the world, another covers the world, minus the United States. The addition of these five funds means iShares has the largest international ETF offering, with more than 60 global, international and emerging market funds.

According to Noel Archard, head of U.S. iShares product development, non-U.S. markets account for 57% of the world's equity market capitalization and performance of these markets continues to differ from the U.S. markets.

The new ETFs are:

• iShares MSCI ACWI Index Fund (ACWI)
• iShares MSCI ACWI ex US Fund (ACWX)
• iShares MSCI Isreal Capped Investable Market Index Fund (EIS)
• iShares MSCI Turkey Investable Market Fund (TUR)
• iShares MSCI Thailand Investable Market Index Fund (THD)

The biggest asset attractor, reports Murray Coleman for Index Universe, will likely be ACWI. It has 2,884 stocks from both developed and emerging markets in every investible market in the world.

Turkey: The country is poised on the brink of seeing its newfound political and economic stability crumble, reports Yigal Schleifer for Eurasia Net. The Constitutional Court is expected to consider a motion to shut down the governing party. The country's currency, the lira, hit a seven-month low. Turkish law gives the judiciary broad powers to shut down political parties, and it has closed 24 of them since its establishment in 1963. The lawsuit is threatening the country's bid for European Union membership.

Israel: Despite the ongoing troubles in the Middle East, Israel's economy has moved at a 5% growth rate for the last four years, reports Paul David Glader for World Magazine. The currency, the shekel, has gained 31% against the dollar in the last two years, and unemployment is at its lowest level in the past decade. The country has also lowered its debt.

Thailand: Share prices closed higher today, but any optimism investors have there is overshadowed by U.S. economy fears, reports Thomson Financial. Thailand benefits from its country's general pro-investment policies and has strong export growth - 17% in 2006 and 12% in 2007. Last year, the economy grew 4.5%, according to the CIA World Factbook.

J.P. Morgan Could Inadvertently Find Itself In the Active ETF Game

Bear Stearns Current Yield Fund (YYY), the first actively managed exchange traded fund (ETF) to hit the market, began trading Tuesday.   

If JP Morgan Chase (JPM) takes over Bear Stearns (BSC), the company would enter the $569 billion ETF industry via the Bear Stearns fund, explains Marc Hogan for Ignites. The fund would be re-branded with the J.P. Morgan name, in fact.

Now some are wondering whether J.P. Morgan will jump into the ETF market with both feet once it has its toe firmly in the water. A spokeswoman for the firm says they don't have any plans to launch any and with details of the Bear Stearns takeover still being ironed out, it's been relegated to backburner status. Those big fish are taking up the bulk of the frying pan right now.

No doubt other Wall Street firms are watching the ETF market, and the mutual fund industry seems to be headed in the ETF direction, too.

For now, though, the question is whether the Current Yield Fund will survive at J.P. Morgan. That needs to be answered before anyone can think about adding even more funds into the fold.

Leveraged and Short Telecom ETFs Can Maximize Exposure On Both Sides

Year-to-date, the iShares Dow Jones US Telecom (IYZ) and the iShares S&P Global Telecommunications (IXP) exchange traded funds (ETFs) are down 20.8% and 13.7%, respectively. So, it's probably a good time for the new ProShares UltraShort Telecommunications (TLL).

Launched alongside the ultrashort is the ProShares Ultra Telecommunications (LTL), designed to deliver twice the performance of the index. In other words, when the index rises by 1%, the ETF would rise by 2%. Keep in mind, this holds true for the flip side of the equation.

The telecommunications sector is dynamic and volatile at times, but rapidly changing technologies, and the quick spread of wireless communication, along with consumer and internet entertainment, are attracting investment in this sector.

The new ETFs are listed, but trading has not started, according to Trading Markets.

Short and leveraged ETFs can be used in a variety of ways, including:

• Continuing to profit, even in a sector downturn
• To get more bang for your investment buck
• To execute sector rotation strategies
• To easily adjust overall portfolio exposure

As with anything else, caution should be exercised with these types of funds. This magnified potential for gains can just as easily turn and magnify your potential for loss.

Nuclear Energy Sector to Add a New ETF to the Fold

PowerShares is getting in on the global nuclear energy sector with a new exchange traded fund (ETF). The anticipated launch date for the PowerShares Global Nuclear Energy Portfolio (PKN) is April 3.

PowerShares President Bruce Bond says a higher standard of living, rising oil prices and increasing demand for cle