Trade Andean ETF: Global X FTSE Andean 40 ETF for Large Cap Latin America Stocks of Chile Peru & Colombia

For investors who have been looking for investing into the emerging market economies, especially in the latin american region, there comes a good option to invest through ETF or exchange traded funds. In this article, we cover the Andean region ETF which will focus on investing in stocks specific to the South American countries under the Andean region. One such ETF is the Global X FTSE Andean 40 ETF focussing on top 40 large cap stocks of Chile Peru & Colombia stock exchanges. This article provides a review of such Andean ETF (Global X FTSE Andean 40 ETF)

Investments today is not bound by geographical locations or countries. Anything that happens in Egypt not just affects Egyptian Investors (Trade Egypt ETF Carefully: Egypt ETF Trading despite Egypt stock exchange closure), but affects the US, European investors equally. Investors and traders are now willing to make more cross-border investments and for USA & Europe, Latin America or South American continent countries and their stocks exchanges and companies provide a good investment option. Image Sourced from screen-shot at www.globalxfunds.com site and edited by FTT.

Hence, to capitalize on this trading and investment in the Latin American region, the NewYork based Global X investment firm has decided to launch a large cap ETF specifically focussed on Large Cap Latin America or South American Stocks of Chile Peru & Colombia.

What is the basis for selecting only these 3 countries for Global X FTSE Andean 40 ETF?
It is because of a pending agreement between Chile, Peru & Colombia, where they have planned to merge their stock exchanges and offer a common trading platform across the 3 countries. Most likely, once this agreement goes through, the joint stock exchange formed by the merger of these 3 countries will be the second largest stock exchange in the South American region. The largest will still be Brazil. Third placed will be the Mexican stock exchange, which is expected to be just half the size of the joint 3 stock exchange.
This will mean all the stocks currently listed in any of these 3 stock exchanges of Chile, Peru & Colombia can be traded through one single bourse or exchange entity. Common exchange is expected to provide a lot of synergy for trading and investments not only to these 3 countries as well as to the rest of the world, who may like to invest through this combined entity.

Another reason is that these 3 countries are known to be top ranked for doing business in the South American region, so expectations of growth is positive.

See Related: Largest ETF List: Low Prices do matter for ETF selection

What will be the trading Symbol for Global X FTSE Andean 40 ETF?
Global X FTSE Andean 40 ETF will trade on NYSE Arca exchange with the Symbol AND - for Andean region.

What is the underlying index for Global X FTSE Andean 40 AND ETF?
It will track the FTSE Andean 40 Index - this is a free-float-adjusted index modified capitalization-weighted index. As the name suggests, this takes only the largest 40 stocks of most liquid companies in Chile, Colombia and Peru. The Andean ETF from Global X (AND ETF) will track and attempt to replicate the performance of this underlying index.
Hence, this Andean AND ETF will provide a good option for investors who are looking for investment and trading in the large cap stocks of these 3 countries combined.

What are the annual charges for AND ETF - Global X FTSE Andean 40 ETF?
The company will charge a 0.72% fees annually.

One more thing to note is that the AND ETF will have more weightage towards Chile based companies, as around half of the capital will be allocated to Chile based comapnies, while the remaining half will be for rest of the two countries - Colombia and Peru

Trade Egypt ETF Carefully: Egypt ETF Trading despite closure of Egyptian Stock Exchanges

The latest unrest in the Middle east countries is opening up new dimensions and lot of lessons to be learnt for the so called ETF investors.
ETF's or Exchange Traded Funds, which are considered to be low cost and highly efficient investment, are not that risk free, as things unfold in the political developments in countries like Egypt, Tunisia, etc., where there is civil unrest and political problems.

Egypt ETF: Trading going on in Egypt based Exchange Traded Funds

We recently covered the details about What to do when ETF Closes or Shuts down? and had listed the ETF Investments Risks & Precautions

However, the case with the latest development in the ETF markets for the case of Egypt ETF is completely different.
In this article, we discuss the Egypt ETF performance in the current scenario, and the new interesting cases which have emerged for Egypt ETF like the Van Eck Market Vectors Egypt Index exchange-trade fund EGPT.P

Let's look at the developments one by one:
First, there is a civil unrest in a country like Egypt. So what do you expect - general closure that includes closure of the country's stock exchanges.
Second, the next expectation will be that the stock market indices for that exchange will not trade, as the stock exchanges are closed. Similarly, the financial products like ETF which are based on that country's stock indices will either stop trading or will fall.

Interestingly, things have happened differently for Egypt based ETF.
First - even though the Egyptian Stock Exchanges are closed, and hence the indices are not moving, the Van Eck Market Vectors Egypt Index ETF is still trading. This is something really interesting and should be an eye-opener for people who believe that ETF's really TRACKS the underlying index.
The underlying index is shut down at the moment, but the ETF is trading and showing large swings in either direction.
So what's the price driving factor for this ETF in such times? There is no definitive answer to it, but the market experts claim that the prices are moving based on speculation, fear on the downside and greed and some so called algorithms for pricing models on the upside.
In essence, there is no surity of anything.

Another important fact to note - the prices of this Van Eck Market Vectors Egypt Index ETF have shown large swings - both on the positive side and the negative side. On Friday, this was down in big no. while on Monday, it managed to cut back its losses and gained around 6.5%.
Now that's interesting.

So what is happening on this trading for Van Eck Market Vectors Egypt ETF?
Investors and traders feel that the civil unrest is temporary and they are using it as a buying opportunity. The general perception going on in the market is that "Egypt is too large country to fail". (Really? I beg to differ)
This might be perceived as a positive sign in market.

Not only that, the SPDR S&P ETF which is for emerging Middle East & Africa has shown positive price movement.
Although Van Eck is reported to have put on hold the creation of new ETF units for Egypt ETF, the redemption is still going on. Hence, the ETF is learnt to be trading at a premium.
Common investors are advised to be cautious on trading in such turbulent times

Oil & Gas ETF: Review, Analysis & Details of Gasoline Oil Gas based ETF

The global rise in the demand of Gasoline or petrol is well known to all. The rise in demand is going to rise further and further. Although other sources of Alternative energy (see Alternative Energy Mutual Funds) have been identified, these alternate sources are still not that efficient, and the world is will continue to have its dependency on the surging crude oil prices.

Oil & Gas ETF: Oil & Gas Exchange Traded Funds

Right from the common man willing to fill oil in his car tank, to big corporations and governments, everyone is dependent on oil. One needs to know how to hedge against the oil prices and the simplest way to do that invest in investment products that track the prices of oil and gasoline. If we delve into the history of Oil prices (See Oil prices historical data chart), we'll observe that oil prices have been been fluctuating widely.
To prevent the effect of such highly volatile oil prices, the best way is to invest in oil prices based investment products which can act as a shield or hedge from the fluctuations in oil prices. Here, In this article, we provide a list of few Oil Based ETF or Exchange Traded Funds, which can be invested in or traded for benefitting from oil price fluctuations

1) iShares Dow Jones US Oil & Gas Exp.(ETF) IEO
The first among the Oil based ETF's stands the famous iShares Dow Jones US Oil & Gas ETF.
It attempts to track and has the Dow Jones U.S. Select Oil Exploration & Production Index the underlying index. This index is for oil exploration and manufacturing companies and includes the oil companies which are in the busines of exploration of oil as well as extraction, production, refining, and supply of oil and gas products.

2) United States Gasoline Fund UGA
The second on our list is United States Gasoline Fund which is trading on NYSE. The working of this Fund is a bit complex to understand, as this works on certain price differentials between the spot prices of the gasoline in NewYork market, versus the prices of the gasoline futures contracts being traded on NYMEX exchange. In essence, this fund works on generating returns based on the investing in futures Contracts and Other Oil-dependent investment products.

3)PowerShares DB Energy Fund ETF DBE
This ETF is from PowerShares and trades on NYSE. It tracks the Deutsche Bank Liquid Commodity Index - Optimum Yield Energy Excess Return Index.
If you are looking for investments in an ETF which has exposure to Energy Commodities, then this is the ETF for you. This PowerShares DB Energy Fund ETF invests in highly liquid energy based commodities like natural gas, sweet crude oil, heating oil, etc.
In a way, this is a good ETF for the energy sector.

4)Vanguard Energy ETF VDE
Another NYSE listed Energy based ETF, from the house of Vanguard. Being the front runners in the low cost fund categories, Vanguard has this energy sector specific ETF (See List of Low Cost Funds from Vanguard).
This ETF tracks the performance of MSCI US Investable Market Energy Index. The good thing about this ETF from Vanguard is that this covers all kinds of US based companies irrespective of their size. Also, the main criteria for inclusion in this scheme is also quite varied, giving a lot of variety to invest - companies in the business of oil rigs construction, to any kind of oil business - be it prodcution, manufacturing, refining, even transportation of oil and oil based products qualify for investment in this scheme.
So this ETF fro Vanguard, which is a trusted name in low cost fund management, offers investors another good option to explore for investments in Oil and Gasoline Based ETF Exchange Traded Funds

ETF Closed / ETF Shutdown: What to do if your Exchange Traded Fund Closes Down?

In this article, we cover details and steps about what to do when an ETF closes down or shuts Down. ETF - Exchange Traded Funds

So you thought that Exchange Traded Funds or ETF's were risk free? Just because an index based ETF is tracking that underlying index, and that underlying index is not going to close down or go bankrupt, that does not mean that the ETF will not close down. The fact is the ETF's or Exchange Traded Funds, do close down or shut down and there is a risk in such ETF investments or Exchange Traded Funds investments.
Let's address the issues one by one:

1) My ETF tracks a major index, hence returns will always be similar to the performance of the index:
No - that is not always the case.
As covered with full details in the article Largest ETF List: Low Prices do matter for ETF, we discuss a case of 3rd and 4th largest ETF's which are tracking the same underlying index, yet the returns from both the ETF's are different.
So dont live under the false impression that ETF's tracking the same index will give similar returns. There are other factors as well (like fund charges and prices), which might affect the ETF returns

Exchange Traded Funds ETF Closure Shut Down

2) ETF or Exchange Traded Funds never close down:
This is myth no. 2. let's look at some stats - The table below shows number of ETF's closed down in USA in the given years.
Year - No. of ETF's Closed

2010 - 49

2009 - 56

2008 - 58

As we can see, there are quite a significant no. of ETF's which are closing down each year. Although one can argue that the no. is declining each year (from 58 in 2008 to 49 in 2010), but the fact is that there are ETF closures. What if you ended up holding your major investments in one of these closed ETF's?
Another thing which can be argued is if around 50 ETF's are closing each year, there are 100's more which are coming up new. Correct, but here we are not worried about what new investment options are coming up. We need to worry about what happens if our invested ETF closes down.

What are the signals that ETF might close down or shut down?
Although there are no such signals which can be clearly mentioned, one can keep a close look at some of the numbers and recent market activities for a particular ETF.
- Is there a sudden decline in the asset under management amount for an ETF?
- Is there a sudden change in the trading volume of an ETF? Are investors redeeming the ETF units at a high pace?
- Is there a remarkable change in the performance of the ETF with respect to its underlying index i.e. high tracking error? like if the index is up by 2% today, your ETF is up only 1%? This typically happens when the fund company which sells ETF has problems.
- Is there another similar ETF which is following the same index and there is a big difference between the returns of the 2 ETF's?

All these pointers can be checked at regular intervals to see if the ETF is showing any signs of problems and is prone to ETF closure.

What to do if my invested ETF has closed down or shut down?
Unfortunately, there is no standard procedure which is followed by the ETF company for closing down the ETF and redeem the units for the ETF investors. What typically happens is the advantages of ETF's become the disadvantages if it is declared to be closed down. Like one of the advantages of ETF is that it trades like a share in open stock market. However, if a closure declaration or closure news comes in, the same open market trading can cause huge selling pressure and prices might fall dramtically. If you happen to sell in that panic mode, you might incure losses.
Other option is to wait till the final redemption date or liquidation date actually comes close, i.e. the last trading date or redemption date of the ETF, and then take what you get. However, again, you dont have any control over what you will get as the actual value will depend upon the market prices, redemption process etc.
So, just dont live under the false impression that ETF's are fool proof investments. Keep a close eye on what's going on with your invested ETF as listed above. ETF's do have risks and they do shut down causing Exchange Trade Funds Closure.

Largest ETF List: Low Prices do matter for ETF selling in USA ETF markets

Exchange Traded Funds or ETF's have been the flavour of the investments since last many years. All know that they come with the multiple benefits of low cost of fund administration charges, benefit of trading like shares yet exactly replicating the underlying index performance, and so on.
It's time now to look at what is going on in the ETF markets in USA and which ETF's are becoming bigger and better. Does the price of fund i.e. fund management charges have any impact on the selling of funds?
If you look at the latest list of ETF's as per the value of investments, then the answer to that question comes out to be a Yes - i.e. price of funds do matter to investors.

First of all, let's have a look at the list of Largest ETF's as per the recent data prepared by Bloomberg. For more details about benefits of investing in ETF or Exchange traded funds, please see ETF Investing: Investments in Exchange Traded Funds.
Figures in the bracket is the amount for assets under management for each of the funds.
.
1 - SPDR S&P 500 ETF Trust by State Street ($90 billion)

2-

3- Vanguard Emerging Market ETF ($46.2 billion) - (See all Popular Vanguard Mutual Funds)

4- BlackRock iShares MSCI Emerging Markets ETF ($46 billion)



It is known that the US ETF market is close to 1 trillion USD. Out of that, the leader SPDR S&P 500 ETF Trust manages almost 10% of the total US ETF market. The rest around (4.5% each) is now with no. 3 and no. 4 rank holders.
We will concentrate our discussion on the two funds only (listed no. 3 and 4 above) because they both track the same index.

What is more important to note in the above list is that although Vanguard is just marginally above BlackRock (only difference of 0.2 billion), the situation was completely different a year ago. It was the BlackRock fund which was almo0st double the size of Vanguard Emerging Market ETF.
Hence, this clearly indicates that Vanguard has been able to pull lot of ETF investors to its funds in the growing ETF market, while BlackRock fund appears to be loosing its base.

Why has this happened? Why BlackRock iShares MSCI Emerging Markets ETF lost to Vanguard Emerging Market ETF?
The answer perheps lies in the cost or price for funds. Whenever any investor invests his money to buy any ETF units, the fund company charges an amount. For Vanguard, the amount is only 27 cents per 100 USD, while for BlackRock, it is 69 cents per 100 USD invested. A big difference of more than double the charges.
Now since both these ETF funds are tracking the same underlying index, where should an investor go if there is a big difference of more that double in terms of the fund charges? The answer is simple - people like to buy cheap and that is what Vanguard has been able to do successfully.
No wonder it has established itself as the no. 1 low cost mutual fund house using the same low prices formula.

So what's the word here? Prices do matter! - whether it is a supermarket or consumer durables or investments, prices do matter and when people are given a choice between 2 similar things, they will obviously go for the cheaper one.

Another thing that might have hit the BlackRock iShares MSCI Emerging Markets ETF loosing its market share to Vanguard Emerging Market ETF is the returns from both these funds. Both these ETF Funds track the same underlying index. However, BlackRock iShares MSCI Emerging Markets ETF has returned only 137 percent compared to Vanguard's 151 % (Data as per Bloomberg). That again gets to fund management and its performance. At the end of the day - its the returns that matter, and as per the above data compiled by Bloomberg, Vanguard fund managers have been good enough compared to BlackRock.
Performance, as well as Prices, both matter for the investment business

PowerShares Bank Loan ETF: PowerShares S&P Bank Loan Portfolio ETF: Review Analysis & Details

In the financial markets, you can trade on anything and everything with more and more choices being made available to retail investors. Here comes another significant and path breaking product from the Invesco PowerShares, known to be the firm for innovative Exchange traded Funds products, most noticable of the lot is their PowerShares QQQ ETF (Nasdaq: QQQQ).
Now, the same firm is reported to have filed for another unique Exchange traded Funds or ETF which will enable the investors and traders to bet their money on Bank Loans - yes, this particular ETF from PowerShares will track the S&P/LSTA U.S. Leveraged Loan 100 Index, which in turn tracks the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads and interest payments.

So this ETF will enable common investors and traders like you and me to bet our money on bank loans.

Investors should note that bank loans are prone to defaults, so even though ETF's are considered to be the safe kind of investments, there is no guarantee that your money will be protected.

However, the good news is that the benchmark index is a rule based index comprising of several criteria. Although it is claimed that the ETF will try to secure collateral, it should be noted that there is credit risk as well as interest rate fluctuation risk. The benchmark index comprises of only top 100 loan facilities, out of the 1100 loan facilities.

On Which exchange will the PowerShares S&P Bank Loan Portfolio ETF be listed ?
The ETF will be listed on NYSE ARCA exchange.

What is the ticker symbol for PowerShares S&P Bank Loan Portfolio ETF??
No info about that as of now

What is the full name of the PowerShares Bank Loan ETF??
The precise name of the PowerShares Bank Loan ETF is PowerShares S&P Bank Loan Portfolio ETF

What is the underlying benchmark index this S&P/LSTA U.S. Leveraged Loan 100 Index will be tracking??
The PowerShares Bank Loan ETF will track the S&P/LSTA U.S. Leveraged Loan 100 Index by using a representative sampling strategy. It is not known how this sampling strategy will actually work. Continue reading: Risks of PowerShares S&P Bank Loan Portfolio ETF

PowerShares S&P Bank Loan Portfolio ETF: Review, Risks & Details

Continuing further from the first part of this article: PowerShares S&P Bank Loan Portfolio ETF: Review Analysis & Details, here are the additional details & risk parameters:

What criteria's are to be followed for selecting the benchmark index for PowerShares Bank Loan ETF?
There are several criteria, we are listing the primary ones here:

- loan must have a minimum initial term of atleast a year
- the loan should be dollar-denominated
- the loan should have a minimum initial spread of 125 basis points or 1.25% over LIBOR (London interbank borrowing rate)

Investors should note that bank loans are prone to defaults, so even though ETF's are considered to be the safe kind of investments, there is no guarantee that your money will be protected.
Please remember that bank loans are also prone to default. There is a big counterparty risk, there is a big interest rate fluctuation risk and there is a big credit risk. When big companies like Lehman Brother can collapse, there can be subprime mortgage crisis leading to a global recession, nothing can be said with certainity about the returns from a product.
Investors should be aware of such risk parameters.

What is the frequency of rebalancing of the index?
The index is learnt to be rebalanced every six months.

iShares ETF launches International Sector ETFs: Developed & Emerging Markets ETF

The ETF or Exchagne Traded Funds business is growing leapsnand bounds and why not - they are known to be the best available products in the markets with Passive investment strategy and good tracking returns record. The pioneer as well as the leader in the field of ETF's is iShares, and it has recently announced the launch of nine iShares MSCI ACWI ex US sector funds which will have international exposure to emerging as well as developed markets and will be tracking the corresponding MSCI indices. This will give investors a good chance to invest in the overseas emerging markets as well as the developed markets, plus the investors can choose the iShare ETF of their choice which belongs to their preferred sector of investment.
What is so unique about the iShares ETF International Sector ETFs?
The iShare ETF's which are recently launched are said to be the first ETF's of its kind - i.e. they offer international exposure and investment opportunities in overseas markets for both emerging and developed markets, and also the benefit of choosing the sector specific funds, whcih may be of interest to the investors.

Which exchange will the iShares ETF International Sector ETFs be available for trading?
The iShares ETF launches International Sector ETFs will trade on NYSE Arca Exchange

What is the expense ratio of iShares ETF launches International Sector ETFs?
It is reported that expense ratio of iShares ETF launches International Sector ETFs will be o.48%, which is quiet competitive and economical for investors

What all iShares ETF International Sector ETFs are being launched?
A total of nine iShares ETF International Sector ETFs are being launched by iShares. They are as follows:

- iShares MSCI ACWI ex US Consumer Discretionary Sector Index Fund (AXDI)
- iShares MSCI ACWI ex US Consumer Staples Sector Index Fund (AXSL)
- iShares MSCI ACWI ex US Energy Sector Index Fund (AXEN)
- iShares MSCI ACWI ex US Health Care Sector Index Fund (AXHE)
- iShares MSCI ACWI ex US Industrials Sector Index Fund (AXID)
- iShares MSCI ACWI ex US Information Technology Sector Index Fund (AXIT)
- iShares MSCI ACWI ex US Materials Sector Index Fund (AXMT)
- iShares MSCI ACWI ex US Telecommunication Services Sector Index Fund (AXTE)
- iShares MSCI ACWI ex US Utilities Sector Index Fund (AXUT)

What are the benchmark indices which the iShares ETF International Sector ETFs will track?
The above ETF's will track the respective MSCI All Country World ex USA sector index. For example, the "iShares MSCI ACWI ex US Information Technology Sector Index Fund (AXIT)" will track the MSCI ACWI ex US Information Technology Sector Index from MSCI.

Will these iShares ETF International Sector ETFs be a good investment opportunity for investors?
It depends upon the risk appetite, period of investment and investors confidence. ETF's are no doubt the best available investment assets. These newly launched ETF's not only offer the international exposure (Non-US) to the investors, but the diversified offering of 9 different funds each focussing on a specific sector also offers a good opportunity to the investors for making investments into their selected sector. The expense ratio is also quite less which will be good for investors.
Ultimately, it depends upon how well the overseas markets and their specific sectors perform over the period of investment and based upon that the returns will be generated

CurrencyShares Euro Trust FXE: Euro USD Forex ETF Product: Review, Analysis & Details

Since the introduction of Euro in the European region, the Euro-USD Forex Exchange rates has been fluctuating widely. However, since the last 2 years or so, Euro has really becoming strong as compared to USD dollar (Forex Rate) and if you go by the recession that had hit primarily the US markets, it has led to Euro becoming more and more stronger.
Moreover, there have been some news items mentioning that some countries (like in Middle-East) are reportedly attempting the get rid of the Dollar Dependence and trying to sell oil contracts in their own respective currencies. All this is leading to a lot of volatility in the USD FOrex Exchagne Rate.
This fluctuations in forex rates have severly hit the exporters, importers, MNC companies across the globe and now everyone is attempting to look for a Forex Risk Management and Forex Hedging.

Wont it be nice if we can have a product which allows us to make investments in the Euro-USD forex, like a mutual fund or an Exchange Traded Fund (ETF), which is traded on an exchange and enables enough liquidity for investing, trading and hedging purposes for Forex Rates Fluctuations?
In this article, we will talk about such Forex Rate ETF or FOrex Exchange Traded Prodcuts, which offer enough liquidity for investing, trading and hedging purposes for Forex Rates Fluctuations

The CurrencyShares Euro Trust FXE from Rydex Investments is one such good option available to investors who can benefit from investing or trading in the units of this exchagne traded product and achieve the aim of hedging against forex rates fluctuations.

What is CurrencyShares Euro Trust FXE?
CurrencyShares Euro Trust FXE, is an exchange traded product tracking the price of the euro, in USD. Hence, it can be easily used for arbitrage traders or market makers who are betting their money on EUR-USD forex contracts or by traders (exporters/ importers) who want to hedge themselves from the fluctuations in EUR-USD forex prices.

Which Benchmark does the CurrencyShares Euro Trust FXE follow?
The benchmark product followed by CurrencyShares Euro Trust FXE is the WM Reuters Euro Closign Spot rates, which are quoted in USD.

What is the unit for investment in CurrencyShares Euro Trust FXE?
The no. of EUR per share for CurrencyShares Euro Trust FXE is 100.

What are the trading benefits of Currency Shares Euro Trust FXE?
For traders, it allows short selling, which means that traders can also go short on the EUR-USD contracts and benefit from them.
-- Protects against wide currency flcutuations and hence reduces the risk
-- Enables short term trading benefits
-- Allows easy trading in Forex Contracts without an overseas brokerage account
-- Low brokerage and transaction costs
-- CurrencyShares will be backed by the assets of the Trust

What has been the historical performance of CurrencyShares Euro Trust FXE?
This graph below will illustrate how the EUR-USD has been fluctuating for this CurrencyShares Euro Trust FXE product. Also note that there appears to be a perfect correlation of this EUR-USD Forex Product with the EUR-USD forex rates.



Is this product risk free?
Nothing in this world comes for free and the same goes for this product. Check the ups and downs in the graph above for this product. It will tell you that there is no one direction for this product. EUR-USD price fluctuations can go either way.

BMO ETF: Bank of Montreal ETF Review, Analysis and Details

The Bank of Montreal has come out with its ETF's or Exchange Traded Funds in the month of February 2009. Though the time is not that long duration to provide an overview and performance monitoring of these ETF's launched by BMO or Bank of Montreal, still these ETFs are worth considering. Given their diversified nature and the broad category of index and sectors which these ETF's are based on, it is surely worth considering to check with these ETF of Bank of Montreal.

BMO Canadian Government Bond Index ETF?? ZGB : Primarily, this ETF focuses on the Government Bond issued by the Canada Government. Investors who are looking to benefit from the stability in Canada and hence returns from these Canada Govt Bonds, can opt for this ETF.

BMO Dow Jones Canada Titans 60 Index ETF?? ZCN :
This ETF attempts to replicate the Dow Jones Canada Titans 60 Index. Since this is specific to Canada, it means that the underlying index will have only the top 60 stocks of Canada. A good option for investors to benefit from the top titans of Canadian stock markets.

BMO US Equity Index ETF?? ZUE :
This can be a good hedging option - for individal traders who wish to play arbitrage between US and Canada stocks.

BMO Dow Jones Diamonds Index ETF?? ZDJ :
Dont go by the name Diamonds, as this fund really has nothing to do with Diamonds. It replicates the Dow Jones Industrial Average (CAD hedging) Index.

BMO Short Federal Bond Index ETF?? ZFS :
This fund tracks the performance of the DEX Short Term Federal Bond Index. A safe bet for investor who have faith in the Federal bonds.

BMO Short Provincial Bond Index ETF?? ZPS :
This fund tracks the performance of the DEX Short Term Provincial Bond Index. A good option for investors who prefer bond investments with less risk appetite.

BMO Short Corporate Bond Index ETF?? ZCS :
Tracks the performance of the DEX Short Term Corporate Bond Index. Investors who trust corporate bonds can opt for this ETF investments.

BMO High Yield US Corporate Bond Hedged to CAD Index ETF?? ZHY :


BMO S&P/TSX Equal Weight Banks Index ETF?? ZEB :
Another ETF from BOM, specific to Canadian banks. It offers a diversified and equal weighted investments in various Canadian bank stocks.

BMO S&P/TSX Equal Weight Oil & Gas Index ETF?? ZEO :
This Oild and Gas ETF offers exposure to the diversified set of investments in equal weighted proportion in a portfolio that consists of common shares of Canadian oil and gas companies. A good option for investors looking for investing in Canada based Oil and Gas companies.

BMO Emerging Markets Equity Index ETF?? ZEM :
Tracks the Dow Jones Emerging Markets Total Stock Market Specialty Index.

BMO International Equity Hedged to CAD Index ETF?? ZDM :

BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF?? ZMT :

Alternative Energy ETF Exchange Traded Funds and mutual funds

We had provided a good coverage and detail of ETF Investing: ETF Investments, Investments in Exchange Traded Funds and then we talked about the ETF Investments Risks & Precautions.
Spread over many other articles, we have tried to give our review of which ETF or Exchange traded funds are good. In this article, we attempt to summarize the same in a single article and also provide links to individual article which you may like to go through.

If you are looking for investments in the Solar Eenrgy Sector, then look no further than the Solar ETF. Though there are many solar etf's available for trading in the market, we have covered the below mentioned ones:
Solar ETFs:
KWT ETF: Market Vectors Solar Energy ETF: Van Eck Global Solar Energy ETF

TAN ETF: Claymore MAC Global Solar Energy ETF

If your interest is investments in Wind Energy Sector, then you can opt for investment and trading in the Wind ETF. We have covered the following Wind ETF:

PowerShares Global Wind Energy Portfolio Wind ETF

FAN ETF First Trust ISE Global Wind Energy Index Fund

If you are concerned about the environment and want your investments to improve along with the environment, then go ahead for investments in the Clean Tech ETF:
Clean Tech ETF: PowerShares Cleantech Portfolio ETF

Then, we also covered some of the Natural Resources Mutual Funds in the following article:
Natural Resources Mutual Funds

Socially Responsible Mutual Funds SRI:
Socially Responsible Mutual Funds SRI

Renewable Energy Mutual Funds
Renewable Energy Mutual Funds

Green Investments & Mutual Funds
Green Investing: Green Investments and Green Mutual Funds

Alternative Energy Mutual Funds
Alternative Energy Mutual Funds & Alternative Energy Funds Investment Performance Index

ETF Investing: ETF Investments Risks & Precautions

The latest article which I had published recently was for ETF Investing: ETF Investments, Investments in Exchange Traded Funds. However, dont assume that all the ETF investments are safe and you can blindly go and buy the ETF units and remain assured that your ETF investment is safe and you can have a nice and peaceful sleep. As a reader of the site, most of the regular readers may have observed that we favour a lot of ETF Investments, ETF Investing or Exchange Traded Funds Investing. In this article, we will look at the ETF investing with a different perspective - the side of Risks in ETF Investments.
Let us understand it very clearly that there is no investment which can be considered as risk free investment. If you think bonds are safe compared to stocks, then read the Collapse of Lehman Brothers Bonds. So keep in mind that whether it is ETF or any other investment, nothing is 100% safe. The government backed securities are also safe, but to the extent of the government stability and control.
I've always talked about the huge size of market and market participants. The same is true for ETF as well. So there will be hundreds of ETF's available, but you should take care to select which one is correct investment for you.

Here are a few points to keep in mind while investing in ETF or exchange traded funds:

Look at the size of the ETF: The bigger the ETF, the more market efficient it will be and the more volume it will be traded into.

Understand the Liquidity of ETF: Before investing, You must know how your ETF investment is going to be traded. If the liquidity is low, that will mean that many investors are not interested in that ETF and hence you may find it difficult to buy or sell the units freely. So keep an eye on ETF liquidity and daily volume.

Related Articles: Green Mutual Funds  Low Cost Mutual Funds, Alternative Energy Mutual Funds

Dont bank on Leverage for trading in ETF: If you are a trader, please note that there are better options to trade on leverage or margin. Go for futures or options if you love leverage or trading on margin money. As a personal recommendation, I always look at ETF's as long term investment tool, so I will recommend the same.

Dont forget the Tax on ETF: You may get into the fancies of manking good income from ETF investments or ETF trading. However, dont forget the tax implications of your income from ETF business. Different countries have different tax definition for securities, stocks, etc. The meaning of ETF may fall into stocks for one country, but may be taxed as a mutual fund in another country and may be taken as business income in some other country. So make your calculations before booking your profits

ETF Investing: ETF Investments, Investments in Exchange Traded Funds

As a reader of the site, most of the regular readers may have observed that we favour a lot of ETF Investments, ETF Investing or Exchange Traded Funds Investing. In this article, we will once again look at some summarize results of why ETF investing is the best bet in the market and why you must stick to ETF for long term returns. Let's look at the different trypes of ETF's.

What are the different Types of ETF or Exchange Traded Funds available in the market?
The following are the various types of ETF's available:

Index ETFs: These are the ETF's which attempt to match the performance of the underlying stock index or index of other related underlying.

Commodity ETFs: Typically, the ETF's which invest in commodities (for e.g. a Gold ETF ). ALong with spot commodities, they may additionally invest in commoditiy futures as well, as a part of hedging or arbitrage.

Related Articles: Green Mutual Funds  Low Cost Mutual Funds, Alternative Energy Mutual Funds

Currency ETFs: These are ETF's specific to currency trading. For e.g. NYSE listed CurrencyShares Euro Trust FXE or DB MONEY £ DB X-TRACKERS £ MONEY MKT ETF CAP XGBP. Though it is considered that currency ETF's are still in infancy and are not yet available in emerging markets like India.

Hedge Fund ETFs: These are the kind of ETF's which track a given hedge fund as an underlying. A compartively new concept.

All in all, the ETF's irrespective of which category they belong to, offer a combined benefit of Security, Liquidity, transparency & low costs of investments. Though there are still substantial risks related to investing in ETF, but they are still comparatively lower than that of investing in stocks and mutual funds based on end of the day NAV

ETF Comparison: Historical performance of ETF Exchange Traded Funds

Now, as the regular readers of this blog may have observed, that I have been constantly advicing to go for investments in ETF or Exchange Traded Funds. I have published several articles proving that how ETF's prevent you from company specific risks, how it is impossible for anyone to consistently beat the market and hence the best way to invest is to go with the market and index based ETF's do exactly that. I have talked about Gold ETF and made a comparative analysis of their historical returns. Here are the articles related to them:

Related: SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme & Gold ETF: Historical Performace of Gold ETF & Gold ETF India

Then recently, Times Of India came out with an interesting observation. They provided a comparative analysis of the various Index based ETF in India. Though I have been proposing that the index based ETF's always track the underlying index almost exactly, but the report published by TOI seems to differ. Here is the digital image of the table about comparaive analysis of Index based ETF Exchange Traded Funds in India (as published by TOI - Image Courtesy TOI).


It compares six ETF's which are based on Sensex or Nifty. They are:
1. Sensex Prudential Icici Exchange Traded Fund ETF
2. Kotak Sensex ETF
3. Quantum Index Fund (Nifty) ETF
4. Nifty Benchmark ETF
5. Nifty Junior Benchmark ETF
6. iShares Asia Trust Sensex ETF (listed in Hong Kong)

As per the table above, the ETF have outperformed the underlying index by a significant margin (remember, 2% and above is considered to be significant). So how can that happen when it comes to the fact that ETF's closely mirror the underlying index? The answer lies in the trading activities. Suddenly there is a positive sign in the market so the investors want to invest their money in it. However, they have seen the fate of index listed companies like Satyam, which are busted for fraud, hence they do no want to take the company specific risks. So what is the best way to go forward, it is to invest in these Index based ETF and garner the returns without the company specific risks.

Related: Large Cap ETF v/s Mid Cap ETF: Historical Performance Check

Then how about the variation in the returns of the different ETF which are based on the same index?
Probably, that's where the company fund management comes into picture. If more investors of ETF have the faith in say, ICICI fund management company, then obviously the demand for ETF from ICICI will be higher compared to others.
So what's the net conclusion for us? Again, its all random for the short term, but if you are going for the long term, most of the ETF will give you the similar returns with 1-2% here or there

Large Cap ETF v/s Mid Cap ETF: Historical Performance Check

We've been giving a lot of advice about investing in ETF or Exchange Traded Funds. Here is an Example of Nifty based ETF. Some readers have also asked questions about whether they should go for Large Cap based ETF like the Nifty or Sensex based ETF or should they go for the Mid cap based ETF. Then there are some more investors who may look for much larger diversification, but with the benefits of ETF, so how has that performed?

In this article, we will look at the historical performance of the large cap ETF, mid cap ETF and much more diversified ETF from Benchmark ETF funds. The data provided is taken from the PDF that Benchmark funds have provided and the methodology is that used by Benchmark ETFs while making the calculations. The purpose of this article is NOT to advertise for Benchmark ETF, but to draw a comparison between Large Cap, Mid cap and diversified performance. Since the ETF's reflect the performance of the underlying index, their performance also give a very good analysis of whether you should go for large caps or mid caps or diversified funds. All data taken is as of February 27, 2009.

So here is the Historical Performance of Nifty Bees, the ETF based on Nifty 50 or the top 50 stocks of NSE as per market capitalization.

Returns for less than 1 year are absolute and more than one year are compounded annualized.
As we can observe in the data presented above by the Benchmark ETF, over a 5 year horizon NiftyBees ETF claims to provide a 10.67% annualized compounded returns.

Now, have a look at the Historical Performance of JuniorBees or the top 51 to 100 stocks of NSE as per the market capitalization.

Seeing the 5 year horizon, the annualized compunded returns from JuniorBees has been a mere 4.09 percent. Hence, over the long period, the Large Cap returns have outperformed the mid cap returns.

Related: SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme & Gold ETF: Historical Performance of Gold ETF & Gold ETF India

To cross-check, let's have a look at the data provided for the underlying index i.e. the Nifty 50 returns and the Nifty Junior Returns. If you compare the 5 year annualized compounded returns of the underlying benchmark index, you will see that the Nifty junior has provided a return of just 3.63% while Nifty 50 has provided a return of 8.94 percent.

Now this should be a sufficient sign for people who firmly believe that only Mid caps are the real winners and they may outperform the large caps. Well, that's not the case as you can see above.