ETF Updates Archive

Rydex and ProShares News is a Non-Issue

The decision by ProShares and Rydex to stop creating new shares of their short financial ETFs shouldn't affect most individual investors and can actually be viewed as a sign of maturity and confidence in the ETF Industry.  Here's why:

1. Cutting off new money is a long-established practice by conscientious fund managers.  When investment opportunities dry up, good managers stop taking new money.

Flight to Safety

Continuing nervousness over banks drove stocks down and caused investors to flee to the relative safety of gold and US treasuries in trading on Wednesday, September 17.

The $15 billion ETF SPDR Gold Trust (GLD) jumped nearly $10 or 13%.  Competing funds COMEX Gold Trust (IAU) and PowerShares DB Gold Fund (DGL) also rose 13%.

Investing in short term US Treasuries is also easy with ETFs.  The SPDR Barclays Capital 1 - 3 Month T-Bill ETF (BIL) trades at just under $46 and changing treasury yields are reflected in the dividend.  The h

Lehman, Merrill, AIG and BofA

The action over the weekend resulted in Lehman Brothers (LEH) going into bankruptcy and Merrill Lynch (MER) selling itself to Bank of America (BAC).

There was no news on American International Group (AIG) which is indicated to open down 40% in pre-market trading over concerns about credit rating changes.

The only ETF with significant to exposure to Lehman Brothers was the Claymore/Great Companies Large-Cap Growth Index ETF (XGC) which had a concentration as high as 2.8% before Lehman Brother's share price meltdown last week.

Merrill Lynch makes up 6% of the holdings of the Dow Jones U.S.

Webinar: Sector Investing

On Friday, September 12, special guest Vinny Catalano joined the editors of ETF MarketPro to take a look at sector investing with exchange traded funds.

Playback webinar.

ETFs in 401(k)s - The Future is Now

In recent months there has been much misinformation swirling about in the media regarding the usefulness of ETFs in 401(k) plans.   Irrational trepidation and technical impediments have prevented more widespread usage of ETFs in 401(k)s.

ETFs are a valuable tool that can easily be incorporated into retirement plans.  For those who seek out select administrators, options are extremely cost effective.

Much of the reluctance of the marketplace toward utilizing ETFs in 401(k)s can certainly be attributed to the fear of the unknown. Advisors have been timid to put retirement plans at what they erroneously perceive as risk; using an investment vehicle in an unproven system. Mutual funds have long been the industry standard for 401(k) plans, but only for lack of alternate options.