Smart Strategies for ETF Investors
As the number of exchange-traded funds in the U.S. mushrooms to more than 1,400 holding $1.1 trillion in assets, sorting between all of the options and product twists gets tougher. This Special Report looks at some of the most recent and important developments in ETFs to show how they can affect your financial future.
Exchange-traded funds account for more than $1.1 trillion of assets invested in the U.S. With such popularity has come confusion. To find out what ETF experts consider the most important things for investors to know, click on.
If you’re diving for dividends only stateside you may be missing out on plenty. Of $1 trillion in dividend payments made last year among the 4,000 global stocks tracked by WisdomTree, the U.S. accounted for just 25 percent of the total. The 19 international dividend ETFs tracked by Bloomberg have an average yield of just under 4 percent.
A slew of new funds from companies including IShares, Russell Investments, PowerShares and EGShares seek to reduce downside risk by investing in stocks with low volatility. They've attracted a great deal of interest from advisers seeking to smooth out clients’ returns.
Fifteen new, single-country, foreign-bond exchange-traded products launched in the past 12 months. "The two big trends in ETFs and ETNs over the last couple of years have been targeted foreign exposure--to get access to single countries--and the move toward fixed income," says Martin Kremenstein, chief investment officer of Deutsche Bank’s db-X Group.
While individual investors embrace exchange-traded funds, most 401(k)s savings plans give them the cold shoulder. Neil Plein, vice president of Portland (Ore.)-based Invest n Retire LLC, is on a mission to change that.
Emerging-market stocks with links to the middle class are the best bets to profit on expansion in those economies, said Bob Holderith, who oversees the U.S.’ fastest growing developing-nation exchange traded fund.
Yale University, whose endowment strategy has been a model for U.S. schools, bought new shares of a China exchange-traded fund last quarter. The stake, valued at $23.2 million as of Dec. 31, was Yale’s biggest new purchase during the three months, according to a filing with the U.S. Securities and Exchange Commission.
Investors poured $34.1 billion into ETFs worldwide, the most since September 2010, according to data compiled by New York-based BlackRock Inc. (BLK), the industry’s largest provider. Fixed-income ETFs gathered $9.1 billion, compared with the previous high of $6.7 billion in January 2009.
Bloomberg ETF analyst Eric Balchunas takes a look at the Market Vectors Unconventional Oil and Gas exchange-traded fund, which focuses on companies that look for and produce unconventional sources of oil and gas.