ETF XRAY

New ETF Hits Gulf Region with Obama

By Carl Delfeld of ChartwellETF.com and ETFpickoftheweek.com

Tomorrow, the Van Eck family of ETFs anticipates the launch of the Market Vectors - Gulf States Index ETF (MES) on NYSE Arca. MES seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Dow Jones GCC Titans 40 IndexSM (Symbol: DJMES). This equity index measures the performance of 40 companies that are either headquartered in countries belonging to the GCC or generating the majority of their revenues in countries belonging to the GCC. By investing in the Fund, market participants have either direct or indirect exposure to the following GCC markets: Kuwait, United Arab Emirates, Qatar, Oman and Bahrain.

The index caps the weight of individual stocks at 8% in each country, with a maximum of 15 companies per country [without an additional cap on country weights upon each quarterly rebalance]. As of its inception on July 10, 2008, country allocations include Kuwait (52.3%), United Arab Emirates (25.8%), Qatar (14.9%), Oman (4.4%) and Bahrain (2.6%). The index is broken down among a number of different sectors; the largest include banks (38.5%), financial services (21.6%), real estate (10.5%), technology (7.6%), construction & materials (7.2%), industrial goods & services (7.1%) and telecommunications (3.6%).

Large cap companies account for 37% of the ETF basket with 48% of the exposure from mid-cap companies. There will be 40 companies in the ETF and the top 25 account for 83% of the baskets value.

Chartwell Introduces ETF Harmony Portfolio Consulting

Chartwell Partners Asset Management has expanded its ETF Architect portfolio consulting services by adding ETF Harmony. ETF Harmony is an intensive and personal investor evaluation process that seeks to match an investor’s personality and goals with their investment portfolios.

“Just like a couple needs to be compatible, an investment portfolio needs to match the personality of an investor’s personality” says Chartwell Managing Director Carl Delfeld. He notes that recent market volatility has highlighted the need for advisors to build portfolios not just based on sound fundamentals but also compatible with the personalities of clients, “otherwise, clients will not stick to the plan and will bail out at the worst possible time.”

Most portfolio consulting models are still based on a series of tired, worn out numbers- oriented questions. As Alan Greenspan put it recently; "...these models do not fully capture what I believe has been……….the innate human responses that result in swings between euphoria and fear that repeat themselves generation after generation with little evidence of a learning curve."

Initially, Chartwell will offer ETF Harmony only to high net worth clients. The personal evaluation process begins with a client responding to a creative list of open ended questions followed by Delfeld flying out for a full day of personal follow up discussions about the client’s investment history, current portfolio, financial goals, personality and investment traits, and risk tolerance.

Next, Delfeld begins the ETF Architect stage and builds an overall portfolio strategy for the client using a core & explore approach with Chartwell’s fifteen ETFfolios as the core investment tool. Finally, the portfolio plan is reviewed by the client, fine tuned, and implemented either by the client or through Chartwell Partners. The fee for this highly customized service is $25,000.

Delfeld noted that he is in discussions with potential partners to offer an ETF Harmony product for the broader market through an automated website-based service (ETFharmony.com).

Chartwell Partners is a global asset management firm that has developed ETFfolios which it uses as building blocks for client portfolio strategies on the FOLIOfn brokerage platform. These ETFfolios include:

Core Conservative ETFfolio
Fixed Income ETFfolio
Global Dividend/Income ETFfolio
World Economic Freedom ETFfolio
Country Rotation ETFfolio
Country Rotation Momentum ETFfolio
Country Rotation Value ETFfolio
American Leadership ETFfolio
Global Sector Rotation ETFfolio
Global Growth ETFfolio
Emerging Markets ETFfolio
Asia-Pacific ETFfolio
China Strategy ETFfolio
Global Long/Short Strategy ETFfolio

Chartwell uses these folios as building blocks to develop custom global portfolios using a core/satellite strategy. Delfeld was a U.S. Representative to the Asian Development Bank and a consultant to the U.S. Treasury. He is a columnist for Forbes Asia, editor of ChartwellETF.com and author of "Think Global, Grow Rich", "The New Global Investor" and "ETF Investing Around the World".

For more information about ETF Harmony and ETFfolios as well as media inquiries, contact Carl Delfeld at 719.264.1503 or at cdelfeld@comcast.net

iShares to Launch Five New International ETFs Including Israel, Thailand and Turkey

By Carl Delfeld of the Chartwell ETF Advisor and ETFfolio.com

Chartwell is pleased to hear that the Barclays family of iShares exchange-traded funds announced the impending launch of five new ETFs expected to trade on or around March 28, 2008. The five new ETFs are:

iShares MSCI ACWI (All Country World Index) Index Fund (Ticker: ACWI)
iShares MSCI ACWI ex US Index Fund (Ticker: ACWX)
iShares MSCI Israel Capped Investable Market Index Fund (Ticker: EIS)
iShares MSCI Thailand Investable Market Index Fund (Ticker: THD)
iShares MSCI Turkey Investable Market Index Fund (Ticker: TUR)

The All Country ETFs will be a valuable alternative to the global ETFs on the market and Chartwell has long waited for the Israel, Turkey and Thailand ETFs which will become part of the universe of its innovative Chartwell Country Rotation ETFfolio.

I will need to take a closer look and see if the Thailand and Turkey ETFs have a better distribution than the closed-ended funds that I have been using as proxies for these two interesting markets which have been buffeted by political storms.

Which of these new ETFs should become part of your global ETF strategy? Join Chartwell ETF and find out.

Chartwell Launches Global Innovation 30 Folio

Chartwell Partners Asset Management has launched another folio, the Global Innovation 30 Folio.
The folio is based on Business Week’s annual The Most Innovative Companies Rankings which is a collaborative effort with the Boston Consulting Group. The Chartwell Global 30 Innovation Folio is managed by Chartwell on FOLIOfn’s online brokerage platform.

The rankings of the top fifty companies are determined through a survey that is sent to the top ten executives at 1,500 largest companies in the world asking them to name the most innovative company outside of their own industry group. There are some surprises on the 2007 list, including four new companies in the top 25 - Disney, Boeing, Genentech, and Cisco Systems. On the other hand, Dell fell from #14 to #22 and 3M fell from #3 to #7.

In building and managing the Global Innovation 30 Folio, Chartwell uses a value approach to select 30 publicly-traded companies from the 50 companies in the rankings and then weights them equally in the folio. Currently, nine of the thirty companies in the Global Innovation 30 Folio are headquartered outside of the United States.

“Innovation drives sustained growth and should lead over time to superior returns for the global companies in the Chartwell Global Innovation 30 Folio”, says Carl Delfeld, Managing Director of Chartwell Partners. In addition, Delfeld explained that FOLIOfn was the ideal platform for the folio since it “offers the ability to buy and sell in fractional shares and allows for the rebalancing of the folio in a single low cost transaction.”

The Global Innovation 30 Folio will join the ten other folios that are available to investors through Chartwell Partners on the FOLIOfn platform. These are the:

Core Conservative ETFfolio
Fixed Income ETFfolio
Global Dividend/Income ETFfolio
World Economic Freedom ETFfolio
Country Rotation ETFfolio
Global Sector Rotation ETFfolio
Global Growth ETFfolio
Emerging Markets ETFfolio
Asia-Pacific ETFfolio
China Strategy ETFfolio
Global Long/Short Strategy ETFfolio

Chartwell uses the above folios as building blocks to develop custom global portfolios using a flexible core/satellite strategy. For more information and media inquiries, contact Carl Delfeld at 719.264.1503 or at cdelfeld@comcast.net.

Chartwell Launches World Economic Freedom ETFfolio

By Carl Delfeld of the Chartwell ETF Advisor

The ETF specialist, Chartwell Partners, has launched another global ETFfolio, the World Freedom ETFfolio, which is based on the Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal. The ETFfolio is managed by Chartwell Partners on FOLIOfn’s online brokerage platform.

The index ranks countries based on a grading system that includes ten freedoms such as property rights protection, investment freedom, tax rates, government intervention in the economy, business freedom, freedom from corruption and monetary, fiscal and trade policy. The idea is not just to rank countries but to track movement both up and down and to highlight the proposition that freedom and prosperity are highly correlated.

The World Economic Freedom ETFfolio will join the nine other folios that are available through Chartwell Partners on the FOLIOfn platform. These ETFfolios are the:

Core Conservative ETFfolio
Fixed Income ETFfolio
Global Dividend/Income ETFfolio
World Economic Freedom ETFfolio
Country Rotation ETFfolio
Global Sector Rotation ETFfolio
Emerging Markets ETFfolio
Asia-Pacific ETFfolio
Global Long/Short Strategy ETFfolio
Global Growth ETFfolio

Chartwell uses a Core/Satellite strategy to allocate client investments amongst the ETFfolios based on an assessment of client goals, time horizon, and risk factors. For more information, contact Carl Delfeld at 719.264.1503.

Chartwell ETF Releases White Paper on Global Sector Investing

By Carl Delfeld of the Chartwell ETF Advisor

Today ChartwellETF.com and Chartwell Partners Wealth Management released an executive summary of a white paper; Global Sector ETF Investing at the World Money Show in Orlando.

The white paper focuses on the S&P Global 1200 index and the ten global sectors it breaks down into, all available through exchange-traded funds, which offer investors and advisors a transparent, liquid, flexible and low cost approach to building a global portfolio.

Here are a few of the white paper's conclusions.

As economies and companies around the world become more interdependent, investors and advisors need to adapt their strategies to add value and increase the likelihood that they will outperform benchmarks. Where a company is domiciled is becoming less important, what industries and sectors it operates in is becoming more important.

Research shows that since the late 1990s, the importance of developed country factors as a factor in determining relative returns is declining and sector factors are increasing. For example, global sectors now account for roughly 40% of total global equity return dispersion, up from 15% in 1992.

A portfolio of the ten exchange-traded funds that track each global sector can be an effective tool to build a core global portfolio since it offers exposure to 70% of world equity markets. It is also a flexible strategy offering opportunities to rotate into global sectors with price momentum as well as undervalued sectors. Combining a global sector portfolio with stock picking - Chartwell's sector plus strategy - is also an option for investors and advisors.

The executive summary includes a profile of the ten global sector ETFs including their top ten holdings and weightings in the S&P Global 1200, sector performance over the past 90, 30 and 10 days, comparisons of the sector ETFs in terms of volatility, return and risk with other international ETFs, global sector exposure for single-country ETFs, plus some potential global sector investment strategies.

The ten global sector ETFs which are listed below have anywhere from 30% to 65% invested in U.S. companies:

iShares S&P Global Consumer Discretionary (RXI)
iShares S&P Global Consumer Staples (KXI)
iShares S&P Global Health Care (IXJ)
iShares S&P Global Energy (IXC)
iShares S&P Global Industrials (EXI)
iShares S&P Global Technology (IXN)
iShares S&P Global Telecommunications (IXP)
iShares S&P Global Utilities (JXI)
iShares S&P Global Materials (MXI)
iShares S&P Global Financials (IXG)

To request a copy of Global Sector ETF Investing and for media inquiries, contact Carl Delfeld at 719.264.1503 or at cdelfeld@comcast.net.

Do Global Exchanges Follow Country ETFs - Up and Down?

By Carl Delfeld of the Chartwell ETF Advisor and Chartwell Partners Wealth Management

Publicly-traded stocks of global stock exchanges, like many country exchange-traded funds, had a great year in 2007 rising about 70 per cent due to record trading volumes.

But this year is a different matter as the Dow Jones Global Exchanges index has lost 15 per cent of its value already this year, in spite of a recent rally according to the Financial Times. Even though Deutsche Börse announced a tax break that would enhance this year’s earnings by an estimated 10%, its shares remained flat as a pancake though overall, global exchange shares have recently rallied.

This may present an opportunity just like lower prices for many high quality country ETFs like Singapore (EWS) and the Netherlands (EWN). Analysis of the past 30 years by Citigroup shows that volumes in cash equities on the New York Stock Exchange actually increased during recessionary periods.

Exchange shares attract investors because it is a fixed-cost business. Once an exchange has earned enough revenue from tariffs on trading, the additional cost to it of handling ever-larger volumes is marginal so additional revenues are almost pure profit. This means that the companies are normally cash cows. Plus the global exchange market remains abuzz with mergers and consolidation activity which may provide some price support.

But be careful as the valuations of exchanges is both murky and tricky. The sector as a whole is still priced for growth, at about 18 times 2009 earnings.

Chartwell Partners Wealth Management has developed a Global Exchange folio with publicly-traded exchanges weighted in a basket. It will be interesting to see if it outperforms Chartwell's Country ETF Rotation folio.

Asian ETFs Jump, Chartwell Launches World Freedom ETFfolio

By Carl Delfeld of the Chartwell ETF Advisor and Chartwell Partners Wealth Management

Global equity markets and ETFs are trading higher across the board today on yesterday's US fiscal stimulus package and generally improved stock market sentiment. There are particularly sharp gains today of +4.10% in Japan, +6.73% in Hong Kong, and +5.02% in Australia. The European DJ Stoxx 50 this morning is up +1.33%. Their respective exchange-traded funds should have a good day trading on U.S. markets.

Chartwell has introduced another ETFfolio called the Freedom ETFfolio based on the Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal. It ranks countries based on a grading system that includes ten freedoms such as property rights protection, investment freedom, tax rates, government intervention in the economy, business freedom, freedom from corruption and monetary, fiscal and trade policy. The idea is not just to rank countries but to track movement both up and down and to highlight the proposition that freedom and prosperity are highly correlated.

The Freedom ETFfolio will join the six other folios that are available to investors through Chartwell Partners and the Foliofn platform. These folios include the following:

Global Sector Rotation ETFfolio
Conservative Core ETFfolio
Country Rotation ETFfolio
World Freedom ETFfolio
Asia Opportunity ETFfolio
Global Opportunity ETFfolio
Global Dividend/Income ETFfolio
Global Strategy Long/Short ETFfolio

For more information, contact Carl Delfeld at 719-264-1503.

Chartwell ETF 2008 Initiatives

By Carl Delfeld of the Chartwell ETF Advisor and Chartwell Wealth Advisors

For 2008, we are launching some new initiatives. One change in our ETF portfolios you will notice right away is the merging of the Core Conservative and the Gone Fishing ETF portfolios. I wanted to emphasize the basic strategy behind all the portfolios which can be referred to as the Core and Explore or Core/Satellite portfolio strategy.

The Core Conservative portfolio aims first to preserve capital through wide diversification and a sizable fixed income component. Around this core portfolio, you need to choose which of the five growth portfolios are suitable for your personal financial situation.

Since I have received numerous requests for a way for members to automatically make portfolios changes, in 2008, I am offering to manage member portfolios on the folioFN.com platform. After a portfolio consultation, I will distribute your capital over Chartwell’s model portfolios and make changes consistent with portfolio changes. The minimum investment for this portfolio service is $500,000.

This service will also give members access to the Chartwell Global 30 portfolio and two new portfolios which because of their frequent adjustments will be available to only private money management clients: the Global Sector Rotation and Country Rotation portfolios

In addition, for members that desire more active equity management and stock picking style of investing, we have begun working with New England Research & Management based in Chicago and Boston. The firm has been actively managing custom portfolios for high net worth clients since 1978 and offers wealth management services to complement portfolio management. Please let me know if you would like a personal introduction to CEO Meg McMullen.

In 2008, we will be integrating our ETFXRAY blog into the Chartwell ETF website and making additional changes to make the site more user friendly.

Planning for our investment tours of Australia and New Zealand in January 2009 and Singapore, Thailand, Malaysia and Vietnam in February 2009 will also move ahead progressively throughout the year. Our partner is luxury travel operator Abercrombie & Kent.

The Chartwell America global think tank whose mission is to make America more competitive and secure by shifting its attention to Asia-Pacific and emerging markets will also be broadening its activities during the year. It will be monitoring the upcoming Taiwan elections and beginning an initiative to deepen our ties with Japan.

Lastly, later this month, I will be publishing an article on why politics is a key consideration in global investing and also releasing an executive summary of a white paper on global sector investing.

Chartwell ETF's Global 30 Tesco Attacks US Market

By Carl Delfeld of the Chartwell ETF Advisor

TESCO, a holding in Chartwell ETF's Chartwell Global 30 portfolio showed strong sales growth in the third quarter. Like-for-like sales, excluding fuel, at the UK supermarket chain rose more than 4 per cent year-on-year in the third quarter, nearly double the rate in the previous quarter. Total sales, including fuel, rose 7.6 per cent according to report in the Financial Times.

Sales from Tesco’s International businesses rose 25.7 per cent, with its stores in Asia leading the way, and good increases from central Europe. It expects to open 7m sq ft of selling space in its international division in the current financial year. Tesco has also already begun its invasion of America by establishing a beachhead on the west coast. Its goal is to build a substantial US convenience chain that could hit 1,000 stores with the next five years. It will open stores from San Diego to San Francisco, aiming for 50 stores by the end of its financial year in February 2008, and a further 200 by the end of 2009.

However, Tesco has put together a blueprint for a far bigger chain. A second distribution centre in Stockton, northern California, will give it distribution capacity for a further 500 stores. The brand is designed to be as fresh as Whole Foods, with value like a Wal-Mart, the convenience of a Walgreens and product range of a Trader Joe’s,” said Tesco USA CEO Tim Mason. “That leaves us with a specific edge in the market.”

Find out more about the Chartwell Global 30 index and portfolio.

Northern Trust Plans 19 Global ETFs

By Carl Delfeld of the Chartwell ETF Advisor

Northern Trust, known for its wealth management, private banking and custodian business, is the newest entry into the world of exchange-traded funds with a filing to the SEC for 19 new ETFs.

Jesse Empak of IBD writes that Northern Trust plans a total of 19 ETFs representing as many countries. Eight are focused on emerging markets, while the rest track indexes in Europe, Australia and Japan. The emerging-markets ETFs track China, Hong Kong, Israel, Malaysia, Russia, Singapore, South Africa and Taiwan.

In the filing to the SEC, Northern Trust does not include Hong Kong or Singapore on the list of emerging markets. In Europe, the ETFs track the BEL 20 in Belgium, the CAC40 in France, the DAX in Germany, the ATHEX 200 in Greece, Ireland's ISEQ 20, the MIB in Italy, the AEX-index in the Netherlands, PSI 20 in Portugal, and the U.K.'s FTSE 100. In Japan, the ETF will use the TOPIX index, while in Australia it'll use the ASX 200.

The ETFs for Ireland, Portugal and Greece would be the first ETFs to track these markets though iShares is rumored to be shortly introducing ETFs for these markets as well as for Thailand and Israel. Most likely, Northern Trust will compete with iShares country ETFs on price just like Vanguard is using its lower expense ratios to increase its market share among individual investors.

Find out if emerging market ETFs will bounce back by joining the Chartwell ETF Advisor.

The Millionaire ETF

By Carl Delfeld of the Chartwell ETF Advisor

Before investors jump to the conclusion that consumer spending is falling off a cliff, check out the data from a study of global wealth by Boston Consulting Group as described by Maya Roney in Business Week. Below are some highlights as well as an exchange-traded fund to take advantage of this explosion of wealth.

The U.S. had, by far, the highest number of millionaire households, with nearly 4.6 million, and the highest number of $100 million-plus households, with 2,300. The number of millionaire households increased by a steady 10%, while $100-million-plus households grew by 7%. The number of millionaire households increased the most last year in China (up 39%), Spain (up 32%), and Britain (up 30.5%). Mr. Carlos Slim of Mexico is likely the wealthiest man in the world with a net worth goes up $52 million a day!

The United Arab Emirates and Switzerland led the ranking for highest density of millionaire households, with millionaire households accounting for 6.1% of all households in each country—almost nine times the global average. In Europe, the number of millionaire households grew by 26.4% in 2006, the highest of any region in the study, helped by its strong currency against the weakening U.S. dollar. As of 2006, the U.S. held about 40% of the world's wealth and 50% of its millionaire households, according to the Boston Consulting Group.

Barclays Wealth research also sheds some light on how different nationalities view taking risk as a key reason for their wealth accumulation. An article by Sharlene Goff of the Financial Times indicates that 84% of investors questioned in South Africa believed a high appetite for risk had helped achieve their riches. In the UK, only 25 per cent of those surveyed put their wealth down to a willingness to take investment risk. Those surveyed in Singapore, Dubai and Hong Kong also had a high appetite for risk

Barclays believed this reflected a “burgeoning entrepreneurial culture” in South Africa while in the UK, US and Canada, people were more likely to achieve wealth through inheritance, marriage or a good salary.

Investors looking for a way to play this trend should consider the Claymore/Robb Report Global Luxury exchange-traded fund (ROB).

This research is important because roughly 60% of total US spending is by the top 20% income earners. Their purchasing power is unlikely to pull back sharply. Second, the growth rate of wealthy individuals from emerging nations is absolutely staggering and they want the best.

This ETF will hold from twenty to one hundred securities of firms that cater to the wealthy including retailers, manufacturers of automobiles, boats, aircraft, and consumer electronics as well as travel and leisure firms, and investment and other professional services firms. It currently has 42 firms in its basket and 72% of them are domiciled in the U.S., France and Switzerland.

Here are the top ten current holdings in the ETF and their weighting.

DAIMLERCHRYSLER AG NPV(REGD) 5.48 %
GOLDMAN SACHS GROUP INC 5.16 %
LVMH MOET HENNESSY LOUIS VUITTON 5.11 %
COMPAGNIE FINANCIERE RICHEMONT-UTS 5.08 %
PPR SA 5.03 %
BAYERISCHE MOTOREN WERKE AG (BMW) 4.87 %
PERNOD-RICARD SA 4.78 %
CHRISTIAN DIOR SA 4.69 %
UBS AG 4.53 %
CREDIT SUISSE GROUP 4.37 %

Learn whether now is a good time to add some luxury to your global ETF portfolio at the Chartwell ETF Advisor.

Powershares Rolling Out New International ETFs

The Powershares family of exchange-traded funds announcedc that on September 27, 2007, it will roll out four new international ETFs using its RAFI methodology. The ETFs include:

(PXH) PowerShares FTSE RAFI Emerging Markets
(PDN) PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid
(PDQ) PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid
(PWD) PowerShares FTSE RAFI Europe Small-Mid

These PowerShares ETFs arebased on FTSE RAFI International Indexes. These indexes represent an investable, liquid universe of over 2,000 global equities spanning more than 40 countries, and each index is designed to track the performance of the fundamentally largest equities in its target region. Companies are selected based on the following four fundamental measures of size: sales, income, book value and dividends.

The patent pending Research Affiliates proprietary research model seeks to provide investment friendly indexes that offer a more accurate measure of the global marketplace than that of a traditional market-cap weighted ETFs such as the iShares family of ETFs.

Powershares maintains that market cap weighted ETFs inherently forces an investor to overweight overvalued companies and underweight undervalued companies, creating a significant growth bias and investment approach that are contrary to sound principles. The PowerShares FTSE RAFI International Portfolios are rebalanced and reconstituted annually.

By Carl Delfeld of the Chartwell ETF Advisor

iShares Muni ETF Hits Market

iShares has launched the first Muni exchange-traded fund, the iShares S&P National Municipal Bond Fund. This ETF (MUB) has important tax advantages of municipal bonds with the tax efficiencies of ETFs. Along with transparency and ease of use, this ETF offers cost efficiency, monthly income distribution, intraday trading liquidity.

Municipal bonds are issued by state and local governments to pay for specific projects like the construction of highways or the expansion of schools. Often referred to as the 'tax-exempt' bond market, the interest from municipal bonds is generally exempt from federal income taxation. This tax advantage is the major motivation for investing in municipal bonds. However, investors must be aware that not all municipal bonds enjoy the same tax-exemption benefits.

The fund is expected to pay regular monthly dividends to investors. In addition to being federally tax exempt, the income may also be eligible for exemption from state and local taxes.

By Carl Delfeld of the Chartwell ETF Advisor

2007 US ETF REPORT CARD

(Click chart for larger view)

Reading the above chart:
Each of the categories above is made up of multiple ETFS in the respected style. The gain/loss percentage is based on the January 2007. If a group is in a column of X’s that means the overall value of the combined group is in demand and moving up in value. If the group is in a column of O’s the group is in supply and moving down in value.

So far in 2007 the Financial ETFs have been hit the worse down a collective 4.45% and in supply overall. The group that has performed the best is up 21.92% is Basic Materials.

By DE Smith of MyPortfolioView

PowerShares Announces Four New International ETFs

On June 25, 2007 PowerShares family of exchnage-traded funds will launch the first wave of PowerShares FTSE RAFI International Portfolios, which use a fundamental approach to select and weight companies in the index. The funds anticipated to launch are:

PXF PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio
PAF PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio
PEF PowerShares FTSE RAFI Europe Portfolio
PJO PowerShares FTSE RAFI Japan Portfolio

Similar to the approach used by industry professionals, companies are weighted not simply by a single measure such as market-capitalization, dividends or earnings, but rather by the size of their fundamentals. Companies are selected based on the following four fundamental measures of size: sales, cash flow, book value and dividends.

The indexes on which the portfolios are based utilize an investable, liquid universe of more than 2,000 global equities that span more than 20 countries. These indexes are designed to track the performance of some of the largest global region or country-specific equities.

Posted by Carl Delfeld of the Chartwell ETF Advisor which offers investors seven model ETF portfolios including an International, Global and Asian Opportunity portfolio.

A Tool That Can Help You Properly Evaluate A Position

Many investors struggle with knowing when to buy and sell. Because the markets are unpredictable and impossible to time charts like the one above are very helpful. Investing is all about knowing when to be on defense vs. offense. Knowing the personality of your investment is critical when evaluating its overall performance. MyPortfolioView has a very unique chart called a “Holding Chart” which tracks the supply & demand of complete positions within a portfolio. The goal is to help investors capture gains and limit losses.

By DE Smith of MyPortfolioView

New International Real Estate ETF Has Asian Tilt

The SPDR DJ Wilshire International Real Estate exchange-traded fund (RWX) has rather quickly accumulated $1 billion of assets but now has a competitor with a different geographic focus and weighting scheme. The new WisdomTree International Real Estate Fund (DRW) holds real estate companies in Europe, Japan, Hong Kong, Singapore, Australia and New Zealand.

The new WisdomTree ETF currently yields 3.26%, and charges 0.58% in annual expenses and holds 224 companies which are weighted based on regular cash dividends rather than by the traditional method of weighting companies by their market value like the SPDR international real estate ETF.

A second big difference between the two ETFs is their geographic distribution. RWX has 20% of its assets in Japan and 18.3% in the UK. The new DRW has only 9% in Japan and 8.8% in the UK but has Australia at a whopping 29.7%, Hong Kong at 20.5% and Singapore at 13.8%. All of these markets have traditionally had high dividend yielding stocks in part due to tax laws that treat dividends favorably. While DRW definitely has an Asian tilt, it has no exposure to markets in Austria, Netherlands and Canada.

Some Chartwell ETF portfolios have held RWX but DRW may be a welcome addition to Chartwell's Asian Opportunity ETF portfolio.

ETF Leader Barclays Revs Up to Crack 401 (k) Market

Exchange-traded funds are the hottest investment product on Wall Street but so far have had a minimal impact on 401 (k) plans. Barclays hopes to change this as it announced a partnership with BenefitStreet, a San Ramon, Calif., firm that handles 401(k) record-keeping to launch a new platform.

The stakes are incredibly high. At the end of 2006, according to Lawrence Carrel of TheStreet.com, 401(k) plans held total assets of $2.7 trillion, with $1.5 trillion of that in mutual funds. Compare that to 1990, when these retirement plans held only $385 billion in assets. Fidelity is the dominant player in the industry with a market share of 23%.

The BenefitStreet platform hopes to address the main stumbling block to including ETF investment options in these fast growing retirement plans: technology and costs. It plans to cut costs by buying ETFs in bulk, but plan participants will still own their shares outright. Once a day, the firm will aggregate all of the orders for iShares from plan participants and buy them directly on the exchange. Invest n Retire of a Portland, Ore., has been making ETFs available in retirement plans for the past three years but so far it has not made much progress.

By Carl Delfeld of the Chartwell ETF Advisor

Telecom HOLDRs (TTH) Dominated by Two Giants

Telecommunication has evolved in the last two decades into a dynamic global business sector driven by mobile services, data communication, and the Internet, and e-government and e-commerce applications. As the sector evolves from monopoly to competitive market structures, governments formulate the legal and regulatory frameworks in which private companies can compete to provide services.

There are some very impressive and powerful companies in the telecommunications sector like AT&T Inc, and Verizon Communications. One of the most popular exchange traded funds in this sector is TTH with nearly 75% of its assets in two giants.

(Click image for larger view)

DE Smith of MyPortfolioView

ETF MARKET CAPS: LARGE CAP

ETF REGIONS

With ETFTOOLS you can track your favorite ETFs based on the proven discipline of supply & demand. Within the MyPortfolioView platform we have populated a database with over 350 ETFs all organized by investment style. ETFTOOLS provides its users with unique point & figure charts not only on every ETF in the market, but every security on the NYSE, Nasdaq, and American Exchanges. There are also unique scanning features which allow you to recall ETFs up or down a specific percentage from their recent high or low. This allows you to quickly identify those ETFs that have recently reversed in value. Much more. If interested send us an email at sales@go2mypv.com.

ETF SECTORS

With ETFTOOLS you can track your favorite ETFs based on the proven discipline of supply & demand. Within the MyPortfolioView platform we have populated a database with over 350 ETFs all organized by investment style. ETFTOOLS provides its users with unique point & figure charts not only on every ETF in the market, but every security on the NYSE, Nasdaq, and American Exchanges. There are also unique scanning features which allow you to recall ETFs up or down a specific percentage from their recent high or low. This allows you to quickly identify those ETFs that have recently reversed in value. Much more. If interested send us an email at sales@go2mypv.com.

Van Eck ETFs Go Nuclear

The Van Eck family of exchange-traded funds announced through a press release that it has filed with the SEC for two new Market Vectors ETF. One will track nuclear related companies and the other will track an agricultural index.

It seems that at the core of each respective ETF is uranium and corn. Both of the benchmark indexes that the ETFs will track are listed on the German exchange: Deutsche Borse AG. Van Eck already has five ETFs on the market which have been well received by global ETF investors.

It will be interesting to see in particular what sort of companies make it into the nuclear ETF basket and how they will be weighted.

By Carl Delfeld of the Chartwell ETF Advisor

Are Water ETFs a Mirage of Profits?

Next to global warming, the concern over water shortages is the topic of the day and exchange-traded funds tapping into this concern are trickling into the marketplace. New water ETFs include First Trust ISE Water Index Fund (AMEX: FIW) and Claymore S&P Global Water Index ETF (AMEX: CGW). Over a year old now, PowerShares Water Resources Portfolio (AMEX: PHO) has attracted considerable press attention.

If you look under the hood of these water ETFs they are dominated by water utilities. Not much to get excited about there except stable earnings and reasonable dividends. Other water companies include engineering firms, and equipment manufacturers. Will McClatchey, Editor of ETFzone points out that PHO emphasizes smaller firms due to it equal-weighted index while FIW sticks to a more traditional market-cap weighted index, so one can expect PHO to gain more exposure to pure water activity.

Keep in mind that globally, water prices are quite sensitive to political pressure and normally water is priced way below its real cost or value. In some emerging markets, as much as 50% of the water is not even paid for serving as an indirect subsidy to consumers.

By Carl Delfeld of the Chartwell ETF Advisor

ETFs For Overvalued Markets

It may be time to blend a little bit of inverse exchange-traded funds in your global ETF portfolios. Short ProShares are the only ETFs designed to go up when markets go down (and vice versa). Jennifer Openshaw of TheStreet.com writes that they are a good alternative to short selling individual stocks or ETFs because they don't require a margin account, require less capital to get a desired exposure, and offer more diversification than a single stock.

Openshaw illustrates how the ProShares Short Nasdaq QQQ ETF (PSQ)works. The fund rises in value matching the drop in the index. A 5% index drop would cause PSQ to rise about 5%. If you are looking for a bit of leverage, the ProShares Ultra series doubles your bet. Buy Ultra Nasdaq QQQ ProShares ETF (QID) will go up double the rate of the decline in the underlying index. If the index drops 5%, your investment gains 10%. Likewise, it'll go down at double the rate if the index goes up.

ProShares offers 29 ETFs that are designed to move in the opposite direction of their indexes.

By Carl Delfeld of the Chartwell ETF Advisor

Benefits of Investing In ETFs

Benefits of investing in ETFs:
1. Low Cost
2. Tax Efficiency
3. Transparency and risk managment
4. Liquidity

New AlphaDEX Exchange Traded Funds

17 ETFs were introduced by First Trust Advisors today. The launch includes nine industry sector funds, three large cap funds, two multi-cap funds, one mid-cap and a small-cap fund.

The new offerings are known as AlphaDEX funds and are designed to provide enhanced performance by selecting stocks based upon fundamental factors such as book value, price to sales, and return on assets. The funds are rebalanced quarterly and all will carry expense ratios of 0.70 percent.

What Are Leveraged ETFs?

Leveraged long and short funds are gaining popularity with sophisticated investors. They can increase returns if you're right, but carry extra risk. They offer up to double the returns of a long or short position in an index, without having to double the amount of money at risk. Though hardly a novel concept, ProShares is the first and only to offer them as ETFs. (In 2000, Rydex launched the Dynamic S&P 500 (NASDAQ: RYTTX mutual fund, which offers 200% of the daily returns of the benchmark.)
ProShares released the bulk of its 46 Ultra and Ultra Short funds in February. But the company started developing the funds in 1999. Only the Securities and Exchange Commission can answer why it took the funds seven years to reach the market, says ProShares CEO Michael Sapir.
Margin
"These are strategies that have been used by large investors for a long time. A lot of investors didn't use these strategies because they were inaccessible or prohibited," Sapir said. "In a pension account, you can't margin, therefore you generally can't leverage your investment or go short." Twelve of the ProShare funds double the long and inverse returns of six Russell indexes. Twenty-two double the long and short returns of 11 Dow Jones sector indexes. The rest track broader indexes such as the Dow, NASDAQ 100 and S&P 500.
Read more

ETFZONE wrote an interesting article back in March. READ IT

Active ETF is Here

What experts believe is an actively managed exchange-traded fund is relative but one would be hard pressed to argue that the new First Trust's Deutsche Bank Strategic Value Index (AMEX:FDV) is a passive ETF.

FDV tracks an index called the Deutsche Bank CROCI, which is conceptually and thematically defined. The specific idea behind the CROCI is that companies with strong corporate profits and a low cost of capital will outperform the benchmark. The CROCI looks at the ratio of earnings to the weighted average cost of capital. The idea behind this is elegantly simple. The higher the earnings and the lower their cost of money, the better a company looks.

According to First Trust this is a great way to pick stock. First Trust says that the CROCI has annualized returns of 17.94% vs. about half that for the benchmark. Jonathan Bernstein of ETFzone discusses the pros and cons of this approach and notes that the forty companies in the index tend to be the larger cap companies in the S&P 500 index. He also compares it to the "Dogs of the Dow" strategy which works best when few are following it.

Get ready, this is just the tip of the iceberg of active ETFs.

By Carl Delfeld of the Chartwell ETF Advisor

Can ETFs Crack 401(k) Market?

Exchange-traded fund sponsors are taking dead aim at the lucrative 401 (k) market but face an tough battle.

About 40 per cent of the $2,500bn in total 401(k) assets is invested in mutual funds, according to figures from the US Federal Reserve. ETFs with their low costs, flexibility and transparency have some advantages over mutual funds but the biggest challenge is the education of plan sponsors about ETFs. Trading costs for ETFs are becoming a non-issue as brokerage costs have come down dramatically.

Michael Woods, chief executive officer of XTF, agrees. “The retirement market is something that can benefit greatly from the low fees, transparency and stability that ETFs offer, and providing our portfolios to plan managers is the next step in our evolution and that of the ETF industry,” he says.

Mutual funds will do everything they can to hold on to this market and will reduce their fees if threatened. There is no reason why both products cannot be on the menu. Even with the tremendous growth of ETFs, they still only represent 4% of mutual fund assets.

By Carl Delfeld of the Chartwell ETF Advisor

How Chartwell Picks ETFs

Every day I am asked to explain how the Chartwell ETF Advisor goes about picking exchange-traded funds for its model and customized portfolios. Of course picking ETFs is the easiest part of the process. Blending them and managing them in a portfolio that suits a particular investor’s goals, personality and risk profile is the hard part. But let’s start with how we select ETFs for the seven model portfolios that members then need to evaluate on their own or even better with the help of their financial advisors.

First, our approach is decidedly global and strategic. For example, some of the basic themes that have colored our ETF selections over the past few years are an Asian tilt, Southeast Asian countries as the best proxy for Chinese growth, undervalued and underappreciated European companies, Japan’s economic recovery, Eastern European growth and the secular bull market in energy and commodities.

Going forward, the themes will be adjusted or discarded and I try to be contrarian at the margins since that is where you will oftentimes find value. From the broad themes we move to more specific ETF selection criterion which include:

1) Momentum - above 30, 50 and 200 day moving average
2) Valuation ETFXRAY - p/e average, price to book and other metrics for composite of top holdings
3) Macro considerations - direction and pace of economic growth, currency, interest rates, political considerations, price of overall market relative to other global markets
4) Capital flows - direction and trend of net monthly flows by global equity managers
5) Point and figure charting to identify resistance and support levels and check on timing

Check out our results.

By Carl Delfeld of the Chartwell ETF Advisor

iShares Dow Jones US Industrial (IYJ)

The top position in iShares IYJ is General ELectric Co. to the tune of 18.23%. General Electric Co. is involved in a multibillion- dollar engine project along with Britain's Rolls-Royce Plc for the F-35 Joint Strike Fighter. The U.S. House of Representatives Armed Services Committee voted to force the Pentagon to fund further development of the engine -- (Read more).

Should Investors Get Prescription for HealthShares?

The XShares family of health exchange-traded funds have both strong supporters and equally sharp critics. It comes down to this question; are they too focused and specialized for the average investor?

So far there are nine HealthShares on the market including: metabolic-endocrine disorders; autoimmune-inflammation; cancer; cardiology; gender health; respiratory/pulmonary; neuroscience: and ophthalmology.
Each has a portfolio of between 20 and 25 stocks, mostly in relatively small companies. The median market value of companies in most of the ETFs is less than $2bn. Instead of the usual market cap weighting of companies in the ETF basket, the companies start with an equal weighting and will be rebalanced regularly

John Authers of the Financial Times walks through the logic of the Healthshares and cites some of the impressive numbers that suggest that XShares and its backers may well have found a product for which there will be a demand. But he cautions that private investors without specialized knowledge, however, should almost certainly avoid them except in small dosages. Perhaps investors should be required to get a prescription for HealthShares from their financial advisors.

These ETFs can make you a lot of money in a short time but use with care and consider them as venture capital.

By Carl Delfeld of the Chartwell ETF Advisor