As the name might imply, revenue is the end-all, be-all in RevenueShares ETFs. Most ETFs weigh holdings by market capitalization, but RevenueShares weighs stocks based on sales, reports Alexandra Zendrian of Forbes.  Its funds are rebalanced once each year on Sept. 30, because quarterly rebalancing could lead to too many fluctuations.

Why revenues? Because it’s a number that’s difficult to fudge.

Dividends can be adjusted, earnings can be moved around by taking writeoffs and doing fancy accounting. The provider feels that revenues are simply a more consistent number to look at.

Another reason the provider has gone with revenues is because all companies have a revenue.

The provider says all of its funds are beating their underlying indexes year-to-date, RevenueShares Small Cap Fund (NYSEArca: RWJ) being the best performer. (More on revenue-weighted ETFs).

For more stories on asset class ETFs, visit our asset class ETF category.

Some of RevenueShares ETFs include:

• RevenueShares Large Cap Fund (NYSEArca: RWL): up 26.3% year-to-date

• RevenueShares Mid Cap Fund (NYSEArca: RWK): up 44% year-to-date

• RevenueShares Small Cap Fund (NYSEArca: RWJ): up 36.7% year-to-date

Kevin Grewal contributed to this article.

Emerging Global Shares has filed to launch a group of ETFs aimed squarely at the BRIC economies, according to Cinthia Murphy for Index Universe:

Emerging Global Shares INDXX India Infrastructure Index Fund

• Emerging Global Shares INDXX India Infrastructure Index Fund
• Emerging Global Shares INDXX China Infrastructure Index Fund
• Emerging Global Shares INDXX Brazil Infrastructure Index Fund
• Emerging Global Shares INDXX India Mid Cap Index Fund
• Emerging Global Shares INDXX China Mid Cap Index Fund
• Emerging Global Shares INDXX Brazil Mid Cap Index Fund
• Emerging Global Shares INDXX Growing Asia Large Cap Index Fund

Every single company within these funds will have no more than a 10% weighting. Net operating expenses are pegged at 0.85% for each fund. ALPS Advisors is the advisor for each fund, with Emerging Global Advisors LLC the subadvisor. (Read about the widening wealth shift between the United States and emerging markets).

Each fund will invest in securities, ADRs and GDRs of various companies to replicate their respective indexes. A fully replicating strategy will be used to assemble the funds, however, representative sampling may be used, if needed. (The ultimate guide to the BRIC ETFs). You can read the prospectus for the funds here.

The BRIC economies have been standouts this year as the world recovers from the global financial crisis, gaining about 110% since the market’s low. Russia has been one of the strongest, gaining 137% year-to-date. Brazil has gained 117%, China is up about 60% and India has added about 90%.

For more stories about BRIC ETFs, visit our BRIC category.

Leveraged and inverse ETFs aim to have the funds’ movements correspond to the inverse of the relevant market indicator on a daily basis.  One must keep in mind that these ETFs come with risks, as well. The biggest issue to understand is the meaning of the word “daily” when it comes to these ETFs: daily, they will track their benchmarks. The further out an investor gets, the greater the risk that the fund won’t track its benchmark perfectly. This effect is heightened in volatile markets. (Check out our special report on these investment tools).

There are a growing number of providers of such ETFs today, including Direxion, ProShares and Rydex.

These funds can be appealing to investors with the risk appetite for several reasons:

• They can be used as a hedge if an investor believes the market is due for a short-term correction. If an investor is holding a position, but doesn’t necessarily want to sell it, then a leveraged or inverse ETF can be used to hedge against any potential loss.
• They can be used to capitalize on market movements. If an investor believes that the S&P 500 is due for a nice run, a leveraged ETF to maximize this movement might be just what the investor wants. (How leveraged ETFs are misunderstood).

These funds aren’t for everyone – always be fully aware of the risks and know how they work before you invest.

For more on leveraged and inverse ETFs, visit our leveraged ETFs category.

Some examples of common inverse and leveraged ETFs are:

• ProShares Short S&P 500 (SH), which seeks to give 100% of the inverse daily performance of the S&P 500.

• ProShares Ultra S&P 500 (SSO), which seeks to give 200% of the daily performance of the S&P 500.

• Emerging Markets Bear 3x Shares (EDZ), seeks to give 300% of the inverse daily performance of the MSCI Emerging Markets Index
  

• Technology Bull 3x Shares (TYH), seeks to give 300% of the daily performance of the Russell 1000 Technology Index

• Rydex 2x Russell 2000 (NYSEArca: RRY), seeks to give 200% of the daily performance of the Russell 2000 Index

• Rydex Inverse 2x S&P MidCap 400 (NYSEArca: RMS), seeks to give 200% of the inverse daily performance of the Mid Cap 400 Index

Kevin Grewal contributed to this article.

According to Will McClatchy for ETFZone, overweighting or underweighting mid-caps coming out of a bear market can be a good play for an ETF portfolio, depending on the economic conditions, and mid-caps are relatively less volatile than small-caps.

There is also the chance that a larger company may acquire a mid-cap company, which would be to the benefit of mid-cap shareholders.

Stock-picking can be difficult; how does anyone know which small- or mid-cap will graduate to large-cap status? Mid-cap ETFs can give you a diversified play on the entire asset class.

Potential investors looking into mid-cap ETFs should know that the definition of “mid-cap” varies from different fund providers. In general, though, it’s a company with a market capitalization between $2 billion and $10 billion.

For more information on mid-caps, visit our mid-cap category.

Major mid-cap ETFs include:

• Vanguard Mid-Cap ETF (NYSEArca: VO)
• iShares S&P MidCap 400 (NYSEArca: IJH)
• iShares Russell Midcap ETF (NYSEArca: IWR)
• SPDR Dow Jones Wilshire Mid Cap ETF (NYSEArca: EMM)
• SPDR MidCap ETF (NYSEArca: MDY)

Additionally, there are mid-cap ETFs that target growth or value:

• iShares Morningstar Mid Core ETF(NYSEArca: JKG)
• iShares Morningstar Mid Growth ETF(NYSEArca: JKH)
• iShares Morningstar Mid Value ETF(NYSEArca: JKI)
• iShares Russell Midcap Growth ETF(NYSEArca: IWP)
• iShares Russell Midcap Value ETF(NYSEArca: IWS)
• iShares S&P MidCap 400 Growth ETF(NYSEArca: IJK)
• iShares S&P MidCap 400 Value ETF(NYSEArca: IJJ)
• Rydex ExpressShares S&P MidCap 400 Pure Growth ETF (NYSEArca: RFG)
• Rydex ExpressShares S&P MidCap 400 Pure Value ETF (NYSEArca: RFV)
• Vanguard Mid-Cap Growth ETF (NYSEArca: VOT)
• Vanguard Mid-Cap Value ETF (NYSEArca: VOE)
• SPDR Dow Jones Wilshire Mid Cap Growth ETF (NYSEArca: EMG)
• SPDR Dow Jones Wilshire Mid Cap Value ETF (NYSEArca: EMV)

Then, there are the leveraged ETFs that provide an extra kick to benchmark performance results. Investors should know the risks involved when trading leveraged funds. (Everything you need to know about leveraged and inverse ETFs).

• ProShares Ultra Russell MidCap Growth ETF(NYSEArca: UKW)
• ProShares Ultra Russell MidCap Value ETF(NYSEArca: UVU)
• ProShares UltraShort Russell MidCap Growth ETF(NYSEArca: SDK)
• ProShares UltraShort Russell MidCap Value ETF(NYSEArca: SJL)
• Rydex ExpressShares 2x S&P MidCap 400 ETF(NYSEArca: RMM)

And lastly, there are mid-cap ETFs that utilize financial ratios to beat popular indexes:

• RevenueShares Mid Cap ETF (NYSEArca: RWK)
• WisdomTree MidCap Dividend ETF(NYSEArca: DON)
• WisdomTree MidCap Earnings ETF(NYSEArca: EZM)

Max Chen contributed to this article.

Claymore

Claymore/AlphaShares China All-Cap ETF (NYSEArca: YAO) is the third China-focused ETF from Claymore. Claymore President Christian Magoon says the new fund is different in several ways:

• It gives diversified exposure to a range of asset classes in the country.
• There’s exposure to the growing consumer sector of the country. China has a rapidly rising standard of living, and there’s still a lot of room to grow. Consumer spending makes about about 37% of China’s GDP. (Read about the U.S. push into emerging markets).
• There’s also exposure to technology in the fund. China is one of the most dynamic technology countries.
• It helps tackle a problem of large-caps in China. Namely, many of them are state-run entities than tend to be operated in the best interests of China rather than the investor. The fund has 57% exposure to large-cap, 33% mid-cap and 10% small-cap. By having more mid- and small-cap exposure, Magoon says, “You get a lot more of the entrepreneurial power of China as a culture.”
• A range of sectors are represented: financial, technology, utilities, telecom, consumer. “It’s one-stop exposure to China,” Magoon says. (Read more about China’s economy).
• One of the most well-known names in investing was behind its creation. Burton Malkiel, chief investment officer of AlphaShares and Princeton University economist, helped create the index. “He’s done lots of research on China, his passion is China. We worked together and created this index,” Magoon says.
• It has limits. YAO has a 35% limit on sector exposure, and no component receives more than a 5% weighting.
• It has a variety of share types. YAO isn’t just composed of American Depository Receipts (ADRs). There are also Global Depository Receipts (GDRs) and H Shares. A and B shares have been excluded because of limits on foreign ownership.

YAO joins two other China ETFs already available: Claymore/AlphaShares China Small-Cap (NYSEArca: HAO) and Claymore/AlphaShares China Real Estate (NYSEArca: TAO). Claymore has also filed for other China-based ETFs aimed at the consumer, technology and infrastructure sectors. (Read more about China’s real estate).

“We really believe that people are continuing to evolve when they look at China and not seeing it as a place where there’s just one way to invest,” says Magoon.

Meanwhile, Claymore’s merger with Guggenheim closed on Thursday. Magoon says they’re looking forward to working with the institutional investor and leveraging their research. “For now, we’re just starting out on our journey. It’s really going to be a growth story.”

For more stories on new ETFs, visit our new ETF category.

Heather Hayes contributed to this article.

Airline Industry. Total airline traffic is still declining, but at a slower rate than it was. Additionally, the drop in freight traffic is declining at a slower rate. Some analysts expect the industry to start taking off in 2010.

• Claymore/NYSE Arca Airline ETF (NYSE: FAA): up 51% in the third quarter

Brazil. Moody’s Investor Services is eyeing Brazil for a possible upgrade to investment-grade. Moody’s would join both Fitch and Standard & Poor’s in giving Brazil an investment-grade rating. A better rating will improved investor sentiment and a boost in the financial sector.

• Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF): up 44.7% in the third  quarter

Commercial Real Estate. The real estate sector has been thoroughly beaten, but some analysts out there feel that the sector has seen the worst, and 2010 could mark a period of improvement. Some pension funds are also beginning to jump into the sector.

• iShares FTSE NAREIT Industrial/Office Complex (NYSEArca: FIO): up 39.9% in the third quarter

Mid-Caps. Mid-cap stocks and companies have done well as the broader market has recovered: in the last six months, they’re up about 45%. Only small-caps have been performing better – small-caps historically outperform the markets after a recovery.

• Rydex S&P Midcap 400 Pure Value (NYSEArca: RFV): up 39% in the third quarter

Insurance Industry. Fed by optimism about the prospect of improving conditions at the insurer, some insurance companies can bounce back higher from prior-year losses while others may see true growth. Property and causality insurers have been spared by a calm hurricane season so far, and most insurers benefited from a recovering financial market.

• SPDR KBW Insurance (NYSEArca: KIE): up 36.7% in the third quarter

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

Max Chen contributed to this article.

Mid-cap stocks and companies have done well as the broader market has recovered: in the last six months, they’re up about 45%. Only small-caps have been performing better in that time frame. Mid-cap stocks from the metals, IT, banking and auto components space have been among those to have seen increased activity, explains Jitendra Kumar Gupta for Business Standard.

The latest fundamentals have given mid-cap stocks a chance to regain their reputation and if a global rebound continues to take place, many emerging markets could give mid-caps another chance to shine. Experts attribute this to the re-rating of smaller companies, as the valuation gap between the large-caps and mid-caps has widened considerably.

Market analysts warn to tread lightly when deciding upon mid-cap stocks, as they have shown a considerable run-up and any significant correction in the market could have a larger impact on stocks of smaller companies. Have a strategy in place when investing in mid-caps, or anything else.

• iShares S&P Mid Cap 400 Fund (NYSEArca: IJH)

• Vanguard Mid Cap (NYSEArca: VO)

For more stories about mid-caps, visit our asset class ETF category.

Growth ETFs hold stocks that are in growth mode, or are growing faster than the markets.  Value ETFs hold stocks that are “diamonds in the rough” – in other words, they’re undervalued and are being shunned by the market, states Ron Rowland of Money and Markets.

In simple terms, all stocks and ETFs can be considered either value- or growth-oriented, or a combo style known as “blend.” For this reason, it helps to take a look at  market capitalization, as well, to further define styles.  Investors now have more choices: there’s value and growth as well as large-, mid-  or small-cap.

What’s more is that certain categories tend to perform better at some times than at others: small-cap and growth tend to outperform in booming economies; large-cap and value tend to do better in recessionary climates. This isn’t a given, though.

Determining which one to choose is usually up to an investor’s appetite for risk, the type of exposure desired and how diversified one’s portfolio already happens to be.

The SPDR Dow Jones Large Cap Growth (NYSEArca: ELG) is a common choice for large cap growth stocks, whereas the iShares S&P Small Cap 600 (NYSEArca: IJR) is common for value oriented small-cap investors.  Regardless of which way one goes, it is important to have a strategy and mind the trend lines.  For more information on how to watch trend lines, check out our new book.

For more stories on strategy, visit our trend following category.

Kevin Grewal contributed to this article.

Charles Schwab

A slew of new filings with the Securities and Exchange Commission  has outlined the details of nine new ETFs from the Schwab family of funds. Murray Coleman for Index Universe reports that the nine funds are:

• Schwab U.S. Broad Markets ETF
• Schwab U.S. Large-Cap ETF
• Schwab U.S. Large-Cap Value ETF
• Schwab U.S. Large-Cap Growth ETF
• Schwab U.S. Mid-Cap ETF
• Schwab U.S. Small-Cap ETF

To target foreign markets, the firm’s lineup will include:

• Schwab International Equity ETF
• Schwab International Small-Cap Equity ETF
• Schwab Emerging Markets Equity ETF

Expense ratios for the funds are yet to be released. Some feel that the competition in that realm will be fierce, since they’re pure index products. Will the Schwab ETFs be able to get a handle on the established competition?

For more stories on new ETFs, visit our new ETF category.

Looking at the past three months and the last year, active stock ETFs by PowerShares are performing by as much as 5% better than their passive counterparts, writes Murray Coleman for IndexUniverse. PowerShares’ “active” ETFs provide a level of freedom to trade and don’t track a benchmark. It should be noted that these actively managed ETFs do have higher expense ratios compared to passive ETFs, but they’re still less expensive than mutual funds.

The four PowerShares active ETFs in the markets include:

• PowerShares Active Mega Cap Fund (PMA), which is comprised of the best performing large-cap stocks last year, has outperformed its passive competitors, iShares S&P 100 Index (OEF) and the Vanguard Mega Cap 300 Index (MGC),  by 3.5-5% in the last three months. PMA includes around 30 mega-cap stocks, which tries to outperform the Russel Top 200 index, and so far fared better than the Russell by 5% for the year. Compared to MGC, PMA has more exposure to energy (21.7%), health care (25.2%), and technology (31.8%), but it has less exposure in consumer staples (6.6%), financials (6.8%), and industrials (1.8%).

• PowerShares Active Alpha Multi-Cap Portfolio (PQZ) may take up a range of different stocks. It has done 3% better compared to the average multi-cap core mutual fund and the Lipper multi-cap index. Compared to its closest competitor, Vanguard Total Stock Market ETF (VTI), it has more sector allocations in technology (40%) and materials (15.7%), but it is lighter in consumer discretionary (1.9%), consumer staples (3.4%), health care (9.7%), industrials (3.8%) and no exposure to utilities.

• PowerShares Active AlphaQ Fund (PQY) is made of 50 top-ranked names from the Nasdaq composite benchmark. Its passive rival, the PowerShares QQQ (QQQQ), seems to be doing a little bit better. PQY differs in the fact that it holds around 6.5% in financials. It now holds 49.8% in technology and lately it is has been holding more in software companies. Furthermore, PQY has no allocations in energy.

• PowerShares Active Real Estate Fund (PSR) focuses on real estate investment trusts with most investments in REITs. It has beaten broad-based index tracking funds, like the Vanguard REIT Index ETF (VNQ). Managers of PSR may select stocks of non-REITs with large real estate holdings that don’t distribute earnings and they are given the option to temporarily invest in cash under market distress.

Max Chen contributed to this article.