Individual Investors Seem to Gravitate to ETFs

The stock rating system on the Motley Fool is slowly seeing exchange traded funds (ETFs) making up the top ten. And now, six of the top ten stocks are actually ETFs.

Before we proceed, CAPS is the Motley Fool's rating system where investors work together and pool all their information to help you identify which stocks are the best to buy and when, along with which stocks to avoid.

Players rate stocks and predict which will under perform or outperform all the while The Fool keeps score and rates them. In turn, players receive ratings and based on the performance of their picks. The system is updated every five minutes, so the news is all current.

Todd Wenning for The Motley Fool gives us the top six ETFs as of May 13th, and reminds us that these are not formal recommendations, just start-ups to further your own research. In respective order:

• iShares MSCI Canada Index (EWC), up 6.7% year-to-date
• iShares MSCI Taiwan Index (EWT), up 10% year-to-date
• iShares MSCI South Africa Index (EWA), up 6.7% year-to-date
• SPDR S&P Emerging Middle East & Africa (GAF), up 1.5% year-to-date
• iShares MSCI Sweden Index (EWD), up 5.5% year-to-date
• PowerShares Global Water (PIO), down 6% year-to-date

It only underscores the popularity that ETFs have acquired with individual investors.

Wenning points out that some of the individual stocks in the ETF will outperform the ETF, but that's the trouble: how do you choose which stock to go after? Hindsight is 20/20. By investing in ETFs, you remove picking and choosing from the equation.

For the month of April, we had ETF industry growth. Will it keep up?

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.

South African ETF Digging Its Way Up

The South African benchmark rose its highest since March 25, mining strong performance for its exchange traded fund (ETF).

The FTSE/JSE Africa All Share Index rose by its largest amount since March 25 yesterday. Some of the most active in the South African market in trading can be found as holdings in the iShares MSCI South Africa Index (EZA), according to Janice Kew and Garth Theunissen for Bloomberg.

EZA rose 3.8% yesterday, and year-to-date, it's up 2.2%. Some of the most active stocks were:

• AngloGold Ashanti Ltd.: 3.6% in EZA; South Africa's biggest gold producer
• Impala Platinum Holdings LTD.: 10%; second-largest metal producer in the world
• MTN Group Ltd.: 11%; South African mobile phone company
• Sasol Ltd.: 13.9%; Manufacturer of motor fuel from coal

The South Africa ETF and streetTRACKS Gold Shares (GLD) have moved in an opposite direction in the last several months, primarily because of ongoing issues with electricity in the country. As the power supply is disrupted, mining is cut short, ultimately affecting the supply and price of gold. The power supply issue remains a problem in South Africa, but appears to be improving somewhat.

Northern Trust Enters ETF Arena With First ETFs To Track Major Foreign Market Indexes

With its new line of exchange traded funds (ETFs), Northern Trust opted to stay true to their principles while traveling around the world.

Is it a sign that ETFs are slowly entering the mainstream and gaining acceptance as more than just a passing fad? An institution as old and well-known as Northern Trust entering the market could be a sign.
 

"We know who we are. We knew what we needed to bring to the market, something that was consistent with our notions of asset management overall," says Peter Ewing, the managing director of Northern Trust's ETF group.

The first batch of funds, the first to track major foreign market indexes, were a year in the making. Ideas were kicked around as the world's third-largest asset manager of institutional index-based assets felt it needed to seriously consider an ETF product line. In 2007, the management committee gave the go-ahead and they filed with the Securities & Exchange Commission (SEC).

"Our opening salvo is traditional," Ewing says. But the provider isn't averse to more inventive ETFs and strategies. But for now, "We want to stay true to our principles."

Northern Trust's ETFs, which all have an expense ratio of 0.47%, are:

• NETS S&P/ASX 200 Index Fund (AUS): Represents Australia
• NETS DAX Index Fund (DAX): Tracks Germany's major exchange
• NETS FTSE 100 Index Fund (LDN): Invests in the largest companies by market cap on the London Stock Exchange
• NETS CAC40 Index Fund (FRC): Represents France
• NETS Hang Seng Index Fund (HKG): Represents Hong Kong
• NETS TOPIX Index Fund (TYI): Represents Japan

At a later date, there will be funds issued that cover Belgium, Ireland, Portugal, South Africa and more.

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.

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).

Gold and Silver ETFs Tumble as Dollar Toughens Up

While the dollar strengthened yesterday and the price of oil pulled back slightly, the price of gold and its exchange traded funds (ETFs) took the hit.

June gold fell to $909 an ounce, and at one point during the day slipped slightly below the $900 mark, reports Candace Cumberbatch for The Australian.

One analyst says investors are sensing several pivot points taking shape in currencies and the credit crisis, which is causing them to ease up on their metals positions, reports Polya Lesova for Market Watch.

While platinum is predicted to hit a new high of $2,400 this year because of continuing power supply problems in South Africa, silver futures fell to $16.79 an ounce.

ETFs that track the futures for those metals fell in trading yesterday, and continue to slide south midday today:

• iShares COMEX Gold Trust (IAU), down 1.2% yesterday; up 8.2% year-to-date
• streetTRACKS Gold Shares (GLD), down 1.2% yesterday; up 8.3% year-to-date
• iShares Silver Trust (SLV), down 2.7% yesterday; up 15.9% year-to-date

For full disclosure, some of Tom Lydon's clients own shares of GLD.

Platinum Demand to Remain High; Could It Lead Investors to ETN?

Platinum is projected to maintain a supply deficit this year, and one way for investors to benefit is with exchange traded notes (ETNs).

There is currently a deficit of 360,800 ounces this year, and it's an improvement over the 412,400 ounce deficit in 2007. Mine supply is set to continue to fall in the wake of the South African power crisis, and as long as the shortage is in place, prices will remain high. Two-thirds of the world's platinum supply hails from South Africa. The major mines are still limited to 90% power.

Jon A. Nones for Resource Investor reports that platinum futures for July delivery are set at $2,034.90 per ounce.  The record was set in March at $2,308.80. 

There is yet to be a pure platinum ETF, however, the Elements MLCX Precious Metals Index (PMY) exchange traded note follows a benchmark of precious metals, including platinum.

The reason there is no platinum ETF is because there is such a shortage of the metal that it isn't very liquid.

If Investment Remains Solid, Infrastructure ETFs Could Gather Strength

An exchange traded fund (ETF) can be a better proxy for a sector than a single stock. It takes the guesswork right out of investing.

Diversification is another element that is added when using ETFs instead of a single stock within a portfolio. An example is the GE (GE) stock that missed its numbers by a long shot late last week. While media has been a weak performer so far this year - PowerShares Dynamic Media (PBS) is down 10.4% year-to-date - and the financials are tough, there could be other reasons to own GE. The company, after all, wears many hats.

How about infrastructure?, asks Roger Nusbaum for Seeking Alpha. The infrastructure sector can cover a wide range of things, including roads, airports, utilities, information technology and other channels of communication. Breakdowns in some of these areas can lead to major disruptions in a country, as seen when China experienced a record snowfall this winter.

Globally, billion upon billions will be spent on infrastructure over the next decade or two. It is reasonable to assume that stocks in this sector will do well, wait until these funds move back above their trend lines before diving in. Countries and regions such as South Africa, Latin America and China are making infrastructure improvements a particular focus in the coming years.

Build up your portfolio's inner strength with:

• iShares S&P Global Infrastructure Index (IGF), year-to-date down 10.1%
• SPDR FTSE/Macquarie Global Infrastructure 100 (GII), year-to-date down 5.8%

On Tight Supply, Gold Is Forecast to Top Records, ETFs Could Follow

A London investment manager expects that tightness in the gold supply could send prices soaring to new records that could affect exchange traded funds (ETFs), particularly those that hold the precious metal.

Gold has taken a step back in the last several trading days, but appears to be making a climb once again. On Tuesday, it traded at $931.60. Today, it's at $949.10. Those prices are a bit off the record level of $1,030.80 that was reached on March 17, reports Sitaraman Shankar for Reuters.

Tight supply of the commodity is the main reason for any price spikes. A fund manager at BlackRock says that production is likely to keep declining, and there haven't been enough gold discoveries to replace what's being mined.

Further putting a damper on gold supplies is that much of the supply resides in South America, which has high political risk, and South Africa, which is experiencing disruptive power outages.

Gold ETFs are higher today:

• streetTRACKS Gold Shares (GLD)
• iShares COMEX Gold Trust (IAU)
• Market Vectors Gold Miners (GDX)

For full disclosure, some of Tom Lydon's clients own shares of GLD.

Coal Has a Smudged Reputation, But Can KOL ETF Rise Above It?

Coal is hardly glamorous - it's got a bad reputation as a dirty pollutant, but it can be a smoking bet in an exchange traded fund (ETF).

Gold is taking the limelight at the moment, but Steve Halpern for Blogging Stocks notes that investing expert Nick Vardy is making his bet on coal. Market Vectors Coal ETF (KOL) launched earlier this year and though it's had a lot of ups and downs, the demand for coal around the world is undeniable.

Coal supplies 25% of the world's energy and generates 40% of the world's electricity. Coal also plays a key role in steel production. South Africa, China and Eastern European countries are in developing mode and will continue to demand coal to fuel their growth.

Richard Gibbs, head of the economics unit at Australia's Macquarie Bank, expects the price of thermal coal (used for heating and power) to rise more than 50% in the next year. He expects metallurgical coal (used in steel manufacturing) to hit $150 per metric ton this year.

Effects of the Price of Gold, Platinum Isn't Just Limited to ETFs

We all know that the price of gold and gold exchange traded funds (ETFs) have been on an upward trend for awhile now, but not everyone knows why this matters and how it works.

David Mckay, the executive editor of Miningmx, sat down with News24 and explained it. Mckay says gold's price is affected by several factors, including its lure for investors seeking tangibles when the dollar weakens. Global economic worries and political turmoil send investors to gold, as well. Most recently, the mining slowdown has decreased the supply.

The supply deficit has kept an underlying fear, and banks have been fed by the ground stocks. Mckay adds that banks are not selling their gold into the market, adding to the appreciation.

In South Africa, a higher gold price translates into security: the economy is stronger, mining jobs are safer and it's good for those who invest in South Africa's gold mining companies through the Market Vectors Gold Miners (GDX), for example.

Gold has retreated from its record levels, and in intraday trading, it fell to $913.30.

The power crisis in South Africa, meanwhile, has also affected the supply of platinum, and analysts predict that the deficit is likely to widen to 470,000 oz. by the end of this year. Deficits for platinum have been the norm since 1999 - the last time there was a surplus was in 2006. South Africa is responsible for 80% of the world's platinum output, reports Reuters. Production problems are likely to continue and strong prices keep investors coming to the precious metal.

This situation only further underscores why there's no platinum ETF in the United States. With the demand outpacing the supply, investors could easily corner the market.

South Africa Needs to Fix Up Infrastructure for ETF to Take Off

South African markets are growing, and once the country irons out its infrastructure problems, its exchange traded fund (ETF) could begin seeing consistently strong performance.

For now, power outages continue to plague the country and interrupt its major industries - mining, in particular. While the latest two-day crisis has been resolved, according to Gordon Bell for Reuters, rolling blackouts would still continue. The state electricity firm, Eskom, plans to spend $43 million in the next five years and $163 billion until 2025 to increase its generating capacity.

Since the near-collapse of the grid in January, South Africa's mines haven't been operating at full power, driving up precious metal prices and raising fears of job losses and slowed growth.

The iShares MSCI South Africa (EZA) is down 8.2% year-to-date. If South Africa commits itself to improving its infrastructure and, in turn, increasing the productivity of one of its major industries, this fund may be one to watch. Particularly since most of the fund is allocated in the energy and industrial sectors.

Dave Mock for Motley Fool explores the country's situation. South Africa is generally regarded as a developing nation, but it has its own set of circumstances that leaves it off the lists that include China, India and Brazil. Half of its population is unemployed, and the life expectancy is nearly half of that of the average American.

ETF Investors Dig for Platinum, Gold and Silver

Yes, investors are flocking to gold exchange traded funds (ETFs) as the dollar weakens.

Case in point is streetTRACKS Gold Shares (GLD): after gold surged to a record $992 an ounce earlier this week, the fund traded nearly 11.5 million shares, reports Joanne Von Alroth for Investor's Business Daily. No one is particularly surprised, though.

What is surprising is the performance of white metals.

Platinum, in particular, has continually hit record highs. On Tuesday, it rose to $2,275 an ounce, and is up 50% year over year. The supply has also taken a hit from the continuing power supply problems in South Africa, which are interrupting mining activity. In addition to that, there has been a platinum deficit since 1999. Mining gets about 7 million ounces of platinum a year.

Why, with all of this shortage and growing investor demand, is there no platinum ETF available in the United States? We've been getting a lot of questions from our readers, so we put the question to Kevin Rich, CEO of DB Commodity Services.

"[Platinum] is not liquid enough to support an ETF," is the simple answer. "There are not enough players transacting it."

The last thing anyone would want, Rich says, is for a fund to take money in but find that it couldn't buy the underlying asset. Platinum is scarce enough that it's possible for an investment product to take away the supply. "When you bring in an ETF, you make sure the supply and demand of the commodity are still driving the market," Rich says.

The Commodity Futures Trading Commission (CFTC) is careful to make sure that trading activity doesn't lead to a situation in which investors corner the market.

The London Stock Exchange lists a platinum ETF from ETF Securities (PHPT), and its existence is likely just a matter of different rules and regulations. "They've done things that wouldn't be as easy to do here in the U.S. from a regulatory perspective," Rich says.

The largest silver ETF, iShares Silver Trust (SLV), is up  33.7% year-to-date.

The metal could be benefiting from its versatility. Not only is it used in jewelry and some is held for profit, but it has a number of industrial applications. It's the best conductor of both heat and electricity. It's used in batteries, conductors, fuses, contacts and a water purifier.

You'd think there would be a ton of the stuff lying around, but it isn't the case: the price bottomed in 1980, much of the existing stockpile was melted down and mining slowed down.

Metals, like any commodity, are volatile. They're doing great now, but be wary of sudden dips and watch the trends closely so you know when it's time to jump ship.

Metal and Mining ETFs Are So Bright, You Have to Wear Shades

Metal and mining exchange traded funds (ETFs) continue to get a rise from a slowing dollar here and continued power outages in South Africa.

Yesterday, the SPDR S&P Metals and Mining (XME) jumped to a record high, thanks to a broad-based rally in the commodities sector overall, reports Wangfeng Zhou for Thomson Financial.

Gold is still strong, too, and funds related to it continue to perform handsomely, thanks to the falling dollar and the commodity's appeal as a safe haven. streetTRACKS Gold Shares (GLD) is up 11.1% year-to-date. iShares COMEX Gold Trust (IAU) is up 11.2%, and Market Vectors Gold Miners (GDX) is up 8.2%.

Silver, a somewhat more volatile metal than gold and platinum, has recently experienced climbing prices, as well. Its ETFs are falling in step with the upward momentum: iShares Silver Trust (SLV) is up 18.2% year-to-date, while the PowerShares DB Silver (DBS) is up 16.8%.

Platinum, for which there is no U.S.-listed ETF, also reached new heights after investors worried that the power issues in South Africa will cause a drop in inventory. The metal hit $2,173 on Tuesday, reports Sean Brodrick for Money and Markets. The question is: is this a short-term upswing, or are people going to have to dig deep into their pockets for platinum from here on out?

As the market continues to slump and South Africa's power outages and poor infrastructure continue to interrupt mining work, these ETFs and metals could see continued performance for the foreseeable future.

Platinum Price Skyrockets, But There's No ETF to Choo-Choo-Choose

Platinum prices jumped in January because of the power outage in South Africa - too bad there's no exchange traded fund (ETF) for the precious metal available here in the United States.

Prices will continue to rise and the end is not in sight, say analysts. If you have your heart set on a platinum piece this Valentine's Day, or rather your valentine has platinum tastes, be ready to pay the price. Guys planning to pop the question might have a little sticker shock in store for them, says Allen Sykora for Wall Street Journal.

Platinum prices are set for a jump of 24% compared to the end of 2007.

The spot price for platinum closed at $1,911.00 on Tuesday. The prices on platinum will continue to be supported because of the power disruptions and the lower production expected for this year.

At prices like these, you can be sure that if you give platinum as a gift today, there will be no mistaking: you must really like that special someone.

Happy Valentines Day!

Precious Metals And ETFs Reaching Historic Highs

Precious metals and related exchange traded funds (ETFs) are making all-time records right now.

Platinum hit a new record high of $1,850 an ounce Thursday. Investors were drawn to the metal after the concerns deepened concerning South Africa's mining troubles. 

Fin24 reports that platinum producers throughout South Africa are still facing power outage problems after halting mining operations for five days last month. This region produces three-quarters of world's output.

Despite the metal's popularity, there's no platinum ETF currently available in the United States. This is because of concerns on the part of platinum miners that such a fund could cause demand to exceed supply and create volatility.

Gold is also continuing its reach for the stars, Goldseek says. Futures closed at $923.60 on Friday, leaving its $936.80 record high of the previous week intact for now. Silver has gone forward to $16.74 an ounce, up 23 cents. 

While $1,000 an ounce is considered to be within reach, it's still nowhere near the inflation-adjusted high of $2,400 an ounce in 1980.

Investors can gain exposure to silver and gold through these ETFs:

• iShares Silver Trust (SLV), up 13.4% year-to-date
• streetTRACKS Gold Shares (GLD), up 9% year-to-date
• Market Vectors Gold Miners (GDX), up 2.3% year-to-date
• iShares COMEX Gold Trust (IAU), up 9% year-to-date

No ETF for Israel Yet, but You Can Still Get Exposure

There's no direct exposure to Israel via exchange traded funds (ETFs) - at least not yet. What's an investor to do?

Zack Miller for Israel Opportunity Investor says that the SPDR Emerging Middle East (GAF) is the best chance to capture exposure to the market at this point. The fund is heavily weighted in three countries especially: South Africa at 65%, Israel at 17% and Egypt at 6%.

Israel, while not putting up the huge growth that other countries have been in the last year, has still giving good numbers: close to 4-5% GDP growth.

Several opportunities to invest in Israel directly could be coming soon. Many investors are wary of the country, though, because of the political risks, says Gary Gordon for ETF Expert. He says the First Israel Fund (ISL) is a closed-end fund (CEF) gives a fairly diversified exposure to the Israeli economy that comes with a 6% dividend. Teva Pharma (TEV) has the top spot at a 10% weighting.

As for Israel ETFs, several are currently in registration with the Securities and Exchange Commission (SEC):

• iShares MSCI CAPPED Israel
• iShares MSCI Israel
• Wilder Israel
  

Infrastructure ETFs Could Build Up in Weak Economy

Weakness in the economy isn't the only thing dogging exchange traded funds (ETFs) as well as both developed and emerging markets: the infrastructure is hurting, too.

Scott Jagow for Marketplace reports that one only need to look around the world to see the evidence: railway disasters in China, power outages in South Africa, Internet disruptions in India and the Middle East. Not to mention the bridge collapse in Minnesota last August.

While emerging markets have been growing and building skyscrapers, factories and commercial properties, they've been neglecting their infrastructure.

Marketplace Economic Correspondent Christ Farrell says that this is actually a silver lining to all the weakness in the economy: there's going to be infrastructure investment over the next couple years, not just just in growing economies, but in the United States, as well. Our highway system was built, he says, when Elvis was still shaking his pelvis.

Farrell says it's what governments naturally do when the economy slows: they want to boost spending and get people employed. The classic way to do it is borrow some money and put it into infrastructure.

If Farrell's prediction proves true, two infrastructure ETFs could reap the rewards:

• SPDR FTSE/Macquarie Global Infrastructure 100 (GII)
• iShares S&P Global Infrastructure Index (IGF)

Golden Expectations In 2008 For Related ETFs

Gold-focused exchange traded funds (ETFs) will gleam from the idea that the precious metal will likely peak at just more than $1,000 per ounce in 2008, according to a London-based consultancy firm.

Gold is likely to continue to benefit from a weakening U.S. economy as investors continue to seek out safe havens for their money, writes James Macharia for Reuters.

If the United States can manage a turnaround in middle-term, then the price could begin to decline about 3 years from now, according to consultancy firm GFMS CEO Paul Walker.

Meanwhile, the South African government asked mining firms on Tuesday to cut their consumption to ease the power crisis, Macharia for Reuters says. Could this also have an impact on the price of gold?

Shortages since January halted mines in the country, a major gold producer and the world's top platinum producer. Mining companies are now operating on 90% of their normal power, which threatens output and profits.

The iShares MSCI South Africa Index (EZA) has dropped sharply since the crisis began. Even though mines are back in business, the economy may have already seen some damage.

ETFs that are likely to feel the ups and downs of gold's path this year:

• streetTracks Gold Shares (GLD), up 6.3% year-to-date
• iShares COMEX Gold Trust (IAU), up 6.5% year-to-date
• Market Vectors Gold Miners (GDX), up 2% year-to-date

South Africa's Blackouts Dim ETF

The blackouts in South Africa might be good for the price of gold, platinum and diamonds, but it's wreaking havoc across other sectors and in the country's exchange traded fund (ETF).

Since late last week, the country's mines shut down, and each day equals $250 million in lost revenue, reports Joanne Von Alroth for Investor's Business Daily. The iShares MSCI South Africa (EZA) is taking a beating, since four of its top 10 holdings are mining companies, and 42% of the fund's assets are in the top five holdings.

The fund has had a rough week: it's down 4%. Year-to-date it's down 9.8%.

The outages aren't just hurting the mines: hospitals have to juggle surgeries, schools close, drivers have to cross their fingers at intersections, shops and restaurants lose customers, production drops and businesses shut down.

This is a good reminder of what we said earlier in the year about looking beyond the business section and being up on the news. It also pays to do some research and know what you own, too, especially when a fund is so heavily weighted in a sector on which a country is dependent.

Gold Stock, or ETF?

What is an investor to do when he or she wants a gold miner's exchange traded fund (ETF) without all the attendant risks?

That was the dilemma facing Trader Mark at Seeking Alpha. In the wake of the South African mining halt, he wanted a stock that wouldn't be so concentrated in that area of the world. He also wanted a stock with as little risk and as unhedged as possible.

We think the real meat in his story is this nugget at the end: "There is also more risk as opposed to playing the simple route and just buying the metal ETF itself." Mark wants a stock because it would offer some nice leverage opportunities if gold marches on upward.

The Market Vectors Gold Miners (GDX) offers exposure around the world. Its top two holdings, both in Canada, make up 24.6% of the fund. Its three South African holdings make up 14.1%, a relatively small portion of its 34 total holdings. In 2007, it finished up 16.8%, while so far this year it's up 11.7%.

We just wonder: when you're looking for exposure to gold or anything else, why complicate things for yourself when ETFs make it so easy?

Are ETFs And Gold In Danger Along With South Africa's Mines?

Gold and platinum prices hit a new high on Friday, as one of South Africa's main metal mines was forced to shut down because of a lack of power, which could affect focused exchange traded funds (ETFs), such as the streetTRACKS Gold (GLD).

Gold in London was pushed to a spot price of $923.40 a troy ounce, and mining executives are calling for a six-week halt as electricity will be rationed with only 50% of South Africa's needs being met, reports Alec Russell for Financial Times.

Other gold ETFs that could be affected by the halt are:

• PowerShares DB Gold (DGL)
• Market Vectors Gold Miners (GDX)
• iShares COMEX Gold Trust (IAU)

Meanwhile, gold has also been the safe harbor of choice by investors, and with the current state of disarray among global markets, the precious metal will be in demand. Bud Conrad and David Galland for HoweStreet report that as we seem primed to enter a period of stagflation: a term that refers to a general economic slowdown, but coupled with rising prices by massive infusions of liquidity into the market.

Climbing prices make stagflation a positive environment for gold, and gold is typically seen as a "safety net" against inflation. However, in a typical recession, demand for everything slows. Will that include gold? No one can really say: there is no historical precedent that demonstrates gold will fall during a recession.

Ever Heard of SPDR Emerging Middle East, Africa?

Which exchange traded fund (ETF) receives little news coverage has an elusive, mis-titled name? The SPDR Emerging Middle East and Africa ETF (GAF).

The fund has been in the shadow of most emerging markets funds over the past few years. GAF does not entirely cover territories implied in its name, reports Tomas Birriel for Seeking Alpha; rather, it is a heavily-weighted in South Africa (65%), Israel (17%) and Egypt (6%).

Briel also notes that there appears to be an inverse relationship between GAF and the 10-year note yield. As the 10-year note yield drops, the price of GAF rises, as seen in October, when the rate cuts began. The Fed is likely to cut rates to 3.75%-4%, possibly causing another spike for GAF. It should be noted, however, that the fund is currently below its trend line. Keep an eye on it.

WisdomTree Could Launch Money Market ETFs

WisdomTree filed for 12 new money market exchange traded funds (ETFs) to cover 17 different foreign and emerging markets. The new funds are similar to the Rydex CurrencyShares funds with two major differences:  (1) They cover many new global markets, and (2) They are money market funds.

Murray Coleman for Index Universe on Seeking Alpha reports that the total number of currency funds available will be 17, representing currencies from almost every major market in the world. Several currencies will be accessible by investors for the first time, including the Brazilian real, Chinese yuan and the South African rand.

Another addition from WisdomTree includes the WisdomTree Developing Markets Fund which proposes to make short-term investments in money market instruments from 10 emerging markets: Brazil, Chile, China, Czech Republic, Hungary, India, Poland, South Korea, Taiwan, and Turkey. This fund is also being titled actively managed, with an average maturity of around 60-90 days.

This will allow investors to put their money in an investment outside the U.S. in a liquid and safe environment.

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

Northern Trust Readies to Enter the ETF Marketplace

There's a new kid on the block of exchange traded funds (ETFs). Northern Trust is entering the  market with a big splash, by offering 19 foreign-market funds, according to Jesse Emspak at Investor's Business Daily.  There is not a domestic to be found in the mix, and according to a filing with the Securities Exchange Commission, the ETFs will track indexes using American, euro and global depositary receipts.

The firm plans for its ETFs to represent 19 countries, with eight of them focused on emerging markets: China, Hong Kong, Israel, Malaysia, Russia, Singapore, South Africa and Taiwan. The rest will track indexes in Europe, Australia and Japan.

There are a few other firms that have ETFs tracking some of the same countries Northern Trust is proposing, including Barclays iShares and State Street Global Advisors' SPDRs.

When it comes to the booming international markets, the more the merrier!

South Africa ETF Could Be in for Tough Times Ahead

The South Africa exchange traded fund (ETF) iShares MSCI South Africa Index (EZA) could see a decrease after the retail sales growth figures for August are released this week. Currently, EZA is up 24.8% year-to-date.

The figures are expected to show that consumer spending is subsiding, which would back the argument for keeping interest rates the same. Consumer demand is South Africa's main growth engine, reports Mariam Isa for Business Day. South African shoppers are feeling a little strapped because of interest rates that have increased 3.5 percentage points since June last year, as the country's standard bank has tried to stop inflation.

Lately, the retail sector doesn't seem to be the only one taking a hit. Official figures show that household spending dipped to an annualized pace of 5.5% in the second quarter, which is a four-year low. In addition, household debt has climbed steadily for the past few years, hitting a new high of 76.5% of disposable income in the second quarter this year.

However, perhaps EZA will dodge some of the troubles in these areas as the consumer discretionary sector makes up 9.7% of the ETF, and consumer staples account for 5.4%. EZA is most heavily invested in materials-based companies, at 29.7%, followed by financials at 19.8%.

South Africa ETF (EZA) Empowers Investors

The exchange traded fund (ETF) iShares MSCI South Africa Index (EZA) could see movement on the news that its largest holding, Sasol, announced plans to transfer 10% of the group to employees and black investors. This would be the biggest single black economic empowerment (BEE) deal in the country to date, according to Mathabo Le Roux for Business Day. Sasol (SSL), a petrochemicals company, makes up 11.1% of EZA. The company plans to sell 3% of the group's equity to the black South African public, and 1.5% will be made available to BEE groups such as empowerment groups involved in Sasol's business, broad-based BEE groups with a skills development focus, and womens groups. Sasol's 2,700-person workforce below management level will receive a 4% stake in the company.

EZA benefits from South Africa's role as the financial backbone of Africa. Its gross domestic product (GDP) is four times that of its southern African neighbors and comprises about 25% of the entire continent's GDP. In addition, the country leads the continent in industrial output, mineral production and electricity generation, according to SouthAfrica.info.com. Currently, EZA is up 11.2% year-to-date.

Which Emerging-market ETF Is Right for You?

Emerging-market exchange traded funds (ETFs) have been popular lately because of their generally strong performance over the past few years. The great thing about emerging-market ETFs is that there is wide selection; almost every ETF provider offers one, as Gary Gordon for ETF Expert notes. Yet, with many choices comes responsibility; investors need to look at the options and see what, if any, meet their financial goals. One way to tell them apart is through their country holdings. Here's a comparison:

• Vanguard Emerging Markets Stock ETF (VWO)
  South Korea dominates this ETF at 15.1%. Taiwan is next at 12.4%, followed by Hong Kong at 10.9%, Brazil at 9.4% and South Africa at 7.6%. VWO is currently up 18.4% year-to-date.
• SPDR S&P Emerging markets (GMM)
  GMM is equally heavy in Brazil and Hong Kong at 12.0%. Next comes South Africa at 8.9%, Taiwan at 6.6% and India at 6.3%. Having launched in March, GMM is currently up 6.3% over the last three months.
• iShares MSCI Emerging Markets (EEM)
  South Korea also is the largest holding in EEM at 15.8%. However, it differs from VWO in its lower holdings. Hong Kong gets 12.2%, Brazil has 11.6%, Taiwan gets 9.6% and South Africa at 8.4%. EEM is up 14.2% year-to-date.
• WisdomTree Emerging Markets High-Yielding Equity Fund (DEM)
  This ETF invests a whopping 27.8% in Taiwan, followed by 11.3% in Brazil, 9.3% in Korea, 8.7% in South Africa and 8.2% in Thailand. DEM just launched in July, which was bad timing, so it's down 5.0% over the last month.

For full disclosure, some of Tom Lydon's clients own EEM.

Political Events Can Impact Emerging-market ETFs

Emerging markets and their exchange traded funds (ETFs) appear as if they are stabilizing despite the subprime storm. iShares MSCI Emerging Markets Index (EEM), for example, is up 5.6% since the market low on August 15 and is up 0.3% for the last three months. Economic growth, an increasing middle class and political stability have been some of the largest influential factors in helping these areas begin to rebound.

While it's clear the global credit crunch has affected these ETFs, if political strife were to envelop an emerging-market country, it could have far worse effects, says Carl Delfeld for ETF XRAY. Take Thailand for example. When its military launched a coup against the country's prime minister, several Asian ETFs dropped. Investors who are invested in emerging markets need to watch political events in those countries closely as these ETFs can be more susceptible to political influences. Some other emerging-market ETFs that launched in March include:

• SPDR S&P Emerging Markets (GMM)
  This ETF has more than 1,500 companies across 26 emerging countries. It's up 1.4% for the last three months.
• SPDR S&P Emerging Latin America (GML)
  This ETF includes companies based in Argentina, Brazil, Chile, Columbia, Mexico, Peru and Venezuela. It's down 3.3% for the last three months.
• SPDR S&P Emerging Middle East & Africa (GAF)
  GAF includes companies based in Egypt, Israel, Jordan, Morocco, Nigeria and South Africa. It's down 8.1% for the last three months.

South Africa ETF Holds Fresh Fields for Investors

South Africa, "the final frontier," can be accessed by U.S. investors only through the iShares MSCI South Africa Index (EZA) exchange traded fund (ETF). South Africa has the largest economy on the continent of Africa, and lately many investors have shown interest.

Trang Ho for Investor's Business Daily says the country holds 8% of the world's oil reserves, glitters with diamonds and overflows agricultural exports. The net inflow of direct foreign investment into South Africa rose to $6.3 billion in 2005, and the GDP rose 4.9% during the same year.

EZA has 49 holdings with oil and chemicals producer Sasol (SSL) as the largest at 10.3% of assets. Banking and telecom are the next largest. Africa's population and per capita income are expected to grow through 2015 and could be the fastest growing in the world. EZA, like many of the markets, corrected last week after reaching a new high.

Mining the Latest Scoop on South Africa's ETF

There are many reasons to love South Africa, including its exchange traded fund (ETF). One of the reasons being that iShares MSCI South Africa Index (EZA) is up 12.5% for the year-to-date. Another reason is because EZA has steadily increased over the last three years, as Carl Delfeld of ETF XRAY notes. Energy, precious metals and commodities are among its top holdings. Here's some additional information on South Africa in case you plan on auditioning for financial "Jeopardy" sometime:

• South Africa has the world's 22nd largest economy by GDP.
• Its GDP grew by 3.7% in 2002, 4.5% in 2004 and 4.9% in 2005, which is the fastest it's grown in 21 years.
• South Africa's stock exchange is among the 10 largest in the world.
• It's the world's leader in mining and minerals.

South African ETF-A Good Ride

Although South Africa has some social problems to tend to, the economy seems to be in good shape and the iShares MSCI South Africa (EZA) exchange traded fund (ETF) is feeling the upward trend of the economy.  South Africa is rich in precious metals and commodities, and more competition in business and politics could lead to an even healthier economy and society.

Carl Delfeld of ETFXRAY.com reviews the economic situation, with a growth rate of 4.5%; inflation within target; a balanced budget; reduced level of external debt and a build up of foreign exchange reserves.  This healthy economy will provide a good basis for next year's presidential elections and help overcome social issues holding back progress.  Some of the social issues include over-regulation; poor infrastructure; high unemployment and unequal income distribution.

South Africa Follows ETF Trends

Four new exchange traded funds (ETFs) will launch on the Johannesburg stock exchange during the next few months. This brings the total ETFs on the South African exchange to 13. Two Itrix products- one that tracks the FTSE 100 and another that follows the Euro Stoxx 50- allow investors to trade the world's major indices through their local stockbroker in real time. With three new products in the pipeline, insiders say that investors can expect a U.S. fund, a Japanese fund, and a fund that bunches some of the world's major indices together, reports Renee Bonorchis for All Africa.com.The only thing left to do is wait for approval from The Financial Services Board. All of the ETFs in South Africa have been simple, vanilla funds that are easy to recognize and understand, but they are saying a new breed of fund is coming. South Africa admits to being a bit behind on world trends, but performance and cost benefits will help ETFs to proliferate there.

On the U.S. exchange, iShares MSCI South Africa (EZA) is up 13.5% for the year.