ETF XRAY

ETF Daily Global Briefing: European Markets Buck Trend

U.S. markets were lackluster Monday and lost ground despite inflation numbers that year on year brought the rate back down to 2.1% and closer to the Fed's 2% comfort zone. This leaves the door a bit open for the Fed to ease rates. The Dow, S&P 500, and Nasdaq coming into today's action with respective gains of 6.2%, 5.2%, and 5.6% for April but investors got cold feet today pondering valuation levels and wondering if all the good profit numbers were already in share price levels. The Dow lost 0.44%, Nasdaq lost 1.26% and the S&P 500 0.78%.

In overseas markets, the Shanghai Composite bucked a down day in Asia rising 2.19% and Singapore gave up 1.1%. Canada caught a cold from US falling 1.53% for the day. In Europe, prices were generally up with Sweden picking up 0.62% while Austria lost 1.48% for the day. I don’t see how commentators can say that global markets all move together. Today is a typical day where market move to their own beat.

Merger activity is one reason European markets are staying strong even with the headwind of rising interest rates. The Swiss Nestle company will buy the Gerber baby-food business from the Swiss pharmaceutical multinational Novartis in a $5.5 billion all cash deal. Barclays Bank PLC of Britian bid $91 billion for the Netherlands' largest bank ABN Amro NV. French leading retailer Carrefour is aiming to become the same in Brazil by buying Atacadao and British pharma AstraZeneca is buying US based MedImmune for $16 billion .
Utility ETFs have surpassed the Real Estate sector as the top performing sector since January 2006. Each of the five ETFs is up in excess of 29% over the last 15 months. IShares DJ Utility Sector Index fund (IDU) leads the way with 33.60%. Vanguards Utilities Vipers (VPU) is close behind with 33.58%. The sector as a whole is up 31.98%.

The Chartwell ETF Advisor’s strategy of playing Chinese and Asian growth through Southeast Asia is working fairly well. Unlike the conventional wisdom that China hurts this region, Chinese growth has actually helped them grow faster and many manufacturers and investors do not want their investments and facilities centered on just China but wish to spread the risks.

Van Eck Global expects to launch the Russia ETF (RSX) is anticipated to launch today, Monday, April 30th. RSX is based on a basket of 30 Russian equities which track the DAXglobal Russia + Index (DXRPUS). The Index includes 5 U.S. listed ADRs, 19 London GDRs and 6 local Russian ordinaries. RSX has a management fee of 69 bps. The other is a Global Alternative Energy ETF (GEX) which is anticipated to launch on May 9th with management fees of 65 bps. GEX is based on the Ardour Global Index extra-liquid (AGIXL) which contains 30 Alternative Energy stocks from around the world.

ETFXRAY Daily Briefing: Asian ETFs Lead, Gold and Silver ETFs Lose Lustre

Despite more, better than expected, corporate earnings reports on Thursday, investors treaded water and markets were flat. Overseas, Latin America had a down day with Brazil losing 1.22%, Europe, led by Austria up 1.45% was generally up and Asia had the best performance for the day with China, Singapore, Indonesia and Japan all up by more than 1%. Egypt was the best market out there up 1.85%.

iShares Dow Jones US Home Construction (ITB) up 4.2% for the day followed by SPDR S&P Homebuilders (XHB) up 3.3% and Internet HOLDRs (HHH) up 2.6% Silver and gold had no luster today. The iShares Silver Trust (SKLV) took a pounding today on the market anvil down 3.54% and the Market Vectors Gold Miners (GDX) was down 2.32%.

Tomorrow will bring preliminary first quarter GDP numbers. Apple’s 3.7% jump today on great earnings helped spark interest technology sector and in particular the internet, semiconductor and biotech sectors lead markets. ETF investors looking for a different approach to technology should look at the Rydex S&P Equal Weight Technology (amex: RYT) which was launched last November. It has an annual expense ratio of 0.50 % and holds 75 stocks that mimic the S&P equal-weight technology index. Most technology ETFs are market cap weighted and therefore favor the big names.

State Street Global Advisors launched two new international ETFs today. The SPDR S&P International Small Cap ETF (GWX) includes companies with market caps under $2 billion domiciled in developed countries outside the U.S. and carries a 0.60% expense ratio. The SPDR S&P World ex-US ETF (GWL) includes more than 5,000 companies domiciled in developed countries outside the U.S. including Canada and carries a 0.35% expense ratio.

Quietly and with little fanfare both the Canadian dollar and the India exchange-traded note (INP) have had nice runs over the last four weeks. One possible drawback of the India fund is that three companies account for 35% of the basket; Infosys, Reliance and ICICI Bank. Below are point and figure charts complements of my good friend Don Smith.

ETFXRAY Daily Update: Semiconductor, India ETFs Lead Markets

Late afternoon buying helped the Dow turn higher Tuesday as investors looked past disappointing housing and consumer confidence reports towards stronger-than-expected quarterly earnings. The S&P 500 was down 0.5% while NASDAQ rose 0.87%. But for the first time ever, Toyota sold more vehicles globally in a quarter than General Motors, preliminary January-March figures show, the clearest sign yet that the Japanese company is on track to overtake its U.S. rival as the world's top automaker.

Internationally, Latin American and European markets were down across the board while Asian markets were flat with exception of a 1.5% jump by India’s BSE index and Taiwan which was up 0.43%.

Technology led the way today as the SPDR S&P Semiconductor (XSD) rose 3.1% followed by the iPath MSCI India Index ETN (INP) up 2.64%. The iShares MSCI Spain Index (EWP) was one of the worst performers for the day down 1.78% and the PowerShares DB Silver (SLV) was down 1.7%.

In ETF product news the first exchange-traded fund to track the price of natural gas has hit the market: the United States Natural Gas Fund (AMEX:UNG). The ETF will track the near two-month natural gas futures contract with the percentage changes in the fund's value aim to reflect the percentage changes in the price of natural gas.

Although there are other ETF options, iShares FTSE/Xinhua China 25 Index (NYSE:FXI), has become the benchmark for foreign investment in Chinese markets, and was the best-performing ETF in 2006, up 84%. From these heights FXI fell 20% in a sell-of late February. Now it is now near to where it ended last year.
As the U.S dollar tests a 2004 low, it serves as a timely reminder that the dollar remains firmly entrenched in a century long secular bear market. Some 15-years ago in 1992, the dollar hit it lowest levels striking south of 78.50. Last week, it slipped back below 82.00.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Report: Broad Global ETF Surge

Friday was a nice end to a solid week for both global markets and the exchange-traded funds that track them. The Dow Jones industrial average acheieved a record close approaching 13,000 as investors enjoyed a week of surprisingly strong earnings reports. Ten of the sixteen Dow companies that have reported earnings thus far have surpassed analyst forecasts – some by a nice margin. For the day the Dow was up 1.20 percent and the S&P 500 index finished up 0.93 percent while Nasdaq rose 0.84 percent. For the week, the Dow surged 2.8 percent, the S&P 500 added 2.2 percent, and the Nasdaq rose 1.4 percent.

International markets also had a very good day with almost all markets up nicely. Latin America was led by a 1.32 percent increase for Brazil and Europe was led by France up 1.88 percent and Spain, up 1.73 percent. In Asia, China’s Shanghai Composite rocketed 3.92 percent, India’s BSE index broke out of its lethargy rising 2.67 percent for the day, and Singapore made a nice recovery up 2.11 percent.
Even markets that had a tough time earlier this week ended the week on a positive note. The Russell 2000 index of smaller companies was 1.16 percent and Japan's Nikkei 225 stock average and the ETF that trackes it was up 0.42 percent for the day.

Underlying all of these positive global ETF returns is confirmation by strong global corporate earnings that, at least for now, the global growth story is intact. For the time being, the market shrugged off all the worries that growth, slowed by pullbacks in markets like real estate, might lead to a recession in the US that would spread to other markets around the world – including developing countries like India and China The World Bank reports that emerging countries will likely account for half of global growth this year. With 85% of the world’s population, these markets already account for 25% of global GDP. Just yesterday, China reported stronger than expected growth running at an annual 11% clip.

By Carl Delfeld of the Chartwell ETF Advisor

Asian ETFs Down, Europe, US Steady

Wall Street was flat as a pancake Thursday after struggling to digest upbeat economic data and a mixed bag of earnings reports. The Dow Jones industrials edged slightly higher to a record close for the second straight day.

Biotech HOLDRs (BBH) was up 1.5% for the day followed by SPDR S&P Semiconductor (XHD) which had its second solid day in a row up 1.44%. Emerging markets, energy and precious metals ETFs had a bad day with the iShares MSCI China (FXI) down 1.5%, the iShares MSCI Malaysia (EWM) was down 1.7% and, surprisingly, the iShares Singapore (EWS) was the worst performing ETF for the day, down 3.12%. Economic growth in China's first quarter jumped a 11.1 percent and inflation increased at its fastest pace in more than two years prompting Chinese officials to say that they would take steps such as raising interest rates to curb growth.

Money and politics are crossing in France as the first stage of its Presidential election approaches and investors look ahead to decide what impact it will have on the France exchange-traded fund (EWQ).
Nicolas Sarkozy, France's main centre-right candidate and front-runner in the polls and Ségolène Royal, the Socialist candidate, will most likely survive the first round and meet each other head to head in the runoff two weeks later. It does matter a great deal to markets who wins since both candidates offer approaches that are fairly stark and wide apart. Given France's slow growth, high tax and high unemployment rate, the election of Mr. Sarkozy would likely ignite a market rally for the market and ETF which has not done badly so far this year, up 8.55%. On the other hand, a victory by Ms. Royal could rattle markets and lead to uncertainty.

While many American investors seem to think that France is becoming nothing more than a tourist attraction, keep in mind that ten of the largest fifty companies in Europe are headquartered in France. They look to the world, not France, for their growth and profits. My call is Sarkozy over Royal, 52% to 48%. Europe as a whole has done remarkably well over the last three years and the iShares S&P 350 (IEV) exchange-traded fund has been an excellent way to play it. See blog below for my partner Don Smith's point and figure chart and analysis.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Update: Semiconductor ETF Leads, US Dollar Sinks

The Dow Jones industrial average closed above 12,800 for the first time Wednesday. Health Care was the day's best-performing sector while autos, technology, especially semiconductors, and homebuilders gained some momentum. The Semiconductor HOLDRs (SMH) exchange-traded fund was up 2.77% and the iShares Dow Jones US Home Construction (ITB) was up 2.16% for the day. In contrast, the Internet HOLDRs (HHH) suffered a 4.19% loss for the day. Europe was down today with exception of Switzerland and Asia was mixed with the markets of Australia and Taiwan up nicely for the day.

The British pound broke through the $2 mark yesterday for the first time in nearly 15 years and a good question is what impact this will have on the UK exchange-traded fund (EWU). Traders may have been reacting to new data that showed an unexpected surge in inflation, prompting speculation of interest rate increases. The flip side of higher interest rates in the UK is a weaker U.S. dollar reach fell to a 15 year low today.

While a rising currency helps the performance of foreign country iShares ETFs since they are not hedged against the U.S. dollar, rising rates usually hurt a stock market because it leads to slower economic growth. However, there are times when increasing rates are seen as a positive for markets since it signals responsible monetary management to stem inflationary pressures.

The Bank of England has raised the base rate by three-quarters of a point since August and economists had been predicting one more rise in the coming months to close off the current cycle of increases -- but the data has prompted speculation about a series if interest rate hikes. Another way to play the rising British Pound is through the CurrencyShares British Pound (FXB) ETF.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Report: Financial ETFs Soar

Consumer confidence numbers and Citigroup’s stronger than expected earnings ignited a good day on Wall Street as leading indexes rose about 1%. Financial service exchange-traded funds let the way with iShares Dow Jones US Financial Services (IYG) up 2.52% for the day followed by iShares Dow Jones US Broker-Dealers (IAI) up 2.47% and the Financial Select Sector SPDR (XLF) up 2.35%.

PowerShares Gldn Dragon Halter USX China (PGJ) was up 2.73% and iShares MSCI Sweden Index (EWD) was up 2.18%. iShares MSCI Singapore (EWA) and iShares MSCI South Africa (EZA) were both up about 1.8% for the day.

What ails India’s stock market? Rising interest rates. Its overnight benchmark has gone from 6.5% in early 2006 to 7.75% today. The Reserve Bank of India has also increased reserve requirements for the third time in four months. Keep in mind that the BSE’s benchmark SENSEX index of 30 large companies has gone from 3,000 in 2005 to 14,500 earlier this year.

Direct China exposure is falling back while Japan equity funds and ETFs were hit by redemptions for the fifth time in the past six weeks. I have noticed that in particular, the small cap sector has been hit hard recently. Investors seem to be holding their fire until they see a more sustained rebound in consumer confidence. This may be an opportunity because the vast majority of large Japanese companies are not tied to the Japanese home market but rather to the global economy.

One important trend to look at when selecting ETFs for your global ETF portfolios is momentum. Look at what ETFs are showing strength. Then you can look at value to see if they match up. If we look at the iShares country ETF performance over the last 30 days, here are the leaders.

Malaysia (EWM) up 11.84%
South Africa (EZA) up 10.47%
Australia (EWA) up 10.23%
Brazil (EWZ) up 10.13%
Netherlands (EWN) up 10.1%

The only country ETF down is Japan (EWJ) which has lost 1.43% during the last 30 days.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Report: ETFs Finish Week on Positive Note

American markets had a solid up day on some preliminary positive reports on earnings in the tech sector and mixed reports on consumer spending. The strong finish allowed indexes to end the week with slight gains. The Dow Jones Industrial Average was up 0.4%, while the S&P 500 rose 0.6% and the Nasdaq did even better up 0.8%. International markets continued to perform better than U.S. markets, with Europe up almost 2%, while Japan was weak, the rest of Asia was up 1.6% and Latin America led by Brazil and Mexico was up 2.2%. The healthcare sector led markets with merger activity in the biotech area fueling gains.

Market Vectors Gold Miners (GDX) was up 2.59%, iShares MSCI Brazil Index (EWZ) was up 2.3% and iPath MSCI India Index ETN (INP) though down 6% for the year was up 2% for the day. Pharmaceuticals, healthcare and other precious metals ETFs like the Silver ETF (SLV) posted nice up days. On the other hand, the SPDR Russell/Nomura Small Cap Japan (JSC) had the second bad day in a row down 1.28%.

According to data from EPFR, global ETFs benefited from their large exposure to Western Europe, where several of the major equity markets are at or around six-year highs as investors respond to mergers and acquisitions activity and the perception that economic growth in the region will exceed previous forecasts. Japan ETFs were hit by redemptions for the fifth time in the past six weeks. While interest in China ETFs is waning, strong interest in Malaysia, Singapore and Greater China funds continues as momentum carries them forward.

Next weeks earnings reports will be critical but expectations are low and companies could surprise on the upside leading to an even stronger week.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Report: Biotech, Transportation and China Lead Markets

Late buying on Thursday sent U.S. markets higher for the day. The Dow Jones Transportation Average's rose 3% despite oil prices soaring 3% and the health care sector was up 1% driven by merger news in the biotech arena. Latin America continued to show strength with Brazil and Mexico continuing upward trend. China’s Shanghai’s Composite was up just over 1% while India lost ground. Not a good day for Europe as most markets were flat or down. Austria lost 1.28% and Spain lost about half that for the day.

U.S. PowerShares Dynamic Biotech & Genome (PBE) was up 2.79%, SPDR S&P Homebuilders (XHB) up 2.7%, iShares FTSE/Xinhua China 25 Index (FXI) which was up 2.48% and the iShares MSCI South Korea Index (EWY) which was up 2.38% for the day. The weakest ETF today was the B2B Internet HOLDRs (BBH) down 2.75%, and the PowerShares DB Base Metals (DBB) was down 1.9%.

Despite market turbulence earlier this year many Asian markets are at or close to record highs including Australia (EWA) which is up 30% during the last 12 months. China, Australia and Malaysia are also robust as investors trim positions in Europe and higher risk and priced markets in places like India. The India market has lost considerable steam due to excessive valuations and rising interest rates. The main Bombay Stock Exchange index is down 4.4% so far this year.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Report: Canada ETF Weathers Cold Market

It was a bad day for the markets which inevitably means that many of the ProShares Ultra Short ETFs led returns. The PowerShares DB Base Metals (DBB) was up 0.86% for the day and the CurrencyShares Canadian Dollar Trust (FXC) was up 0.71% closely followed by the iShares MSCI Canada Index (EWC) ETF which was up 0.64%.

On the downside HealthShares Emerging Cancer (HHJ) had another terrible day down 5.28%. The SPDR S&P Homebuilders (XHB) and iShares Cohen & Steers Realty Majors (ICF) real estate ETFs were down 1.78%. On the country side, the WisdomTree Japan SmallCap Dividend (DFJ) lost 1.42% dampening hopes that the small cap side of the Japanese market is the place to be.

This was one of those days when you’d be smiling if you had more bond ETFs in your global ETF portfolio. Vanguard announced four new fixed-income ETFs stating that diversification within its bond ETFs helps keep tracking tight and default risk low. The Vanguard Total Bond Market ETF (BND) holds more than 20 times the number of bonds of its competitor’s iShares product. In addition, the estimated expense ratio for each of its new bond ETFs is 0.11%. That's nearly 40% below the average for competing ETFs.

Here are the names and tickers for the new Vanguard bond ETFs.

Total Bond Market ETF (BND)
Short-Term Bond ETF (BSV)
Intermediate-Term Bond ETF (BIV)
Long-Term Bond ETF (BLV)

China region ETFs have come back nicely and are testing new highs. See below posting for a point and figure chart showing a composite of China ETFs from my partner Don Smith of go2mypv.com.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Global Daily Report

U.S. markets and ETFs finished only modestly higher as investors braced themselves for corporate quarterly earnings reports. Energy was the only sector posting a respectable gain with its 1.4% advance due primarily to a rebound in oil prices

The PowerShares DB Oil (DBO) exchange-traded fund was up 2.25% for the day followed by other oil service and equipment ETFs. The iShares MSCI Australia Index (EWA) and the WisdomTree Pacific ex-Japan Hi-Yleld (DNH) ETFs were up 1.98%. The Semiconductor HOLDRs (SMH) was up 1.57% and the iShares MSCI Sweden Index (EWD) was up 1.54%. Having a bad day was the HealthShares Emerging Cancer (HHJ) ETF down 1.63% for the day and the PowerShares DB Base Metals (DDB) down 1.15%.

Other international ETFs showing strength today were the iShares MSCI Italy Index (EWI), the iShares MSCI Belgium Index (EWK) and the WisdomTree International Basic Materials (DBN), all up 1.45% for the day.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily ETF Insight: U.S., International ETFs Finish Strong Week

For the week, the S&P 500 surged 3.5%, logging its best performance in four years, while the Nasdaq turned in a similar performance and European and Asian markets rebounded with even greater strength than domestic markets ranging from 3-6%. There was a 5.5% surge in General Motors (GM 31.99 +1.67) today which accounted for 13 of the Dow's 19 point gain. Asian markets for the most part were flat while Europe was up. The iShares Dow Jones Transportation Average (IYT) was up 1.85% on Friday and the iShares MSCI Malaysia Index (EWM) continued its rally up 1.79% followed by PowerShares Lux Nanotech (PXN) up 1.56%.

While the First Portfolio Biotech ETF (FBT) was up 1.15% for the day the Biotech HOLDRs (BBH) was the worst performing ETF of the day, down 2.11%. Choosing the right ETF does matter even ones in the same sector. FBT has 20 biotech companies equally weighted in its ETF basket. The iShares Silver Trust (SLV) was down 1.99%.

The combined Emerging Market Equity Funds and ETFs tracked by Emerging Portfolio Fund Research (EPFR) have now seen net outflows of $3.7 billion year to date while last year over the same period they had taken in $22 billion of what would eventually total $33 billion of net inflows prior to last year’s May-June correction.

Nonetheless, the sharp rebound this past week among emerging market ETFs, which began to spread to developed markets, meant that many EPFR-tracked fund groups posted eye-catching performance numbers during the week, as the MSCI Emerging Markets Index gained about 4.5% during the Wednesday to Wednesday period. Weekly performance numbers for Global Emerging Markets (GEM), Latin America, EMEA, Europe, US and Global Equity Funds hit year-to-date highs as Shanghai's benchmark equities index posted a new record high less that four weeks after its sharp fall triggered a worldwide correction.

Investors did commit a net $1.2 billion to Large Cap Growth Funds, which runs counter to a trend that has seen money migrate out of growth funds across all capitalizations during the past 14 months. Japan and Pacific Equity Funds and ETFs both posted their third straight week of net outflows and investors pulled $403.8 million out of Europe Equity Funds and ETFs.

Collectively, Global Sector Funds have posted net inflows of $5.87 billion this year. Global Utilities Funds extended their winning streak to eight straight weeks while Global Real Estate Funds were in the money for the eighth time in nine weeks.

ETFXRAY Daily Insight: Oil, Mexico Up, Technology Pullback

On Thursday, U.S. markets were basically flat with technology and financials pulling back. Just about any ETF with a connection to energy had a solid day led by the United States Oil (OIL) ETF which was up 2.82% and iShares GSCI Commodity-Indexed Trust (GSG) and the Energy Select Sector SPDR (XLE) were both up about 2% for the day. Technology and in particular the SPDR S&P Semiconductor (XSD) was the worst performer today down 1.11% with several European iShares such as the united kingdom (EWU) and Sweden (EWD) down just under 1%.

Mexican markets surged on Wednesday as investors interpreted the U.S. Federal Reserve's policy statement as signaling its next move might be to cut interest rates. The benchmark IPC stock index rose 2.96 percent, its biggest gain since Oct. 31, to close at 28,219.55 points.
Latin America and Mexico in particular have been hot markets EWW - iShares: MSCI Mexico was our choice as ETF of the day today after it advanced 3.96% yesterday. The following snapshot is complements of my partner Don Smith of go2mypv.com. You will find the point and figure chart in a blog below.

The Mexican economy is gaining momentum, having grown 4.5% in 2006. Internationally minded investors looking to spice up their holdings with a shot of hot sauce might consider the iShares MSCI Mexico Index (AMEX: EWW). It has its heaviest sector exposure in Wireless Telecom, at 27%, with 15% in construction materials and 12% in diversified telecomm.

The moving averages are: 50 day - 51.82, 200 day - 44.90. This ETFs top five holdings are; America Movil SAB de CV 22.63%, Cemex SA B de CV 15.51%, Telefonos de Mexico SA de CV 9.06%, Wal-Mart de Mexico SA de CV 4.99% and Grupo Televisa SA 4.80% .

Timing is everything for the success or failure of new exchange-traded funds or ETFs. In only nine months -the ProShares family of exchange traded funds (ETFs) passed the $4 billion mark in assets. ProShares offers the first and only ETFs designed to provide short or magnified exposure to well-known market indexes. With volatility and mediocre returns so far this year, ETF investors are warming up to the idea of using a modest amount of these inverse ETFs to buffer their overall portfolio's volatility. I use some of them in a few of our model ETF portfolios but caution investors to be careful and not get carried away.

While some mutual fund families retain strong investor loyalty, many are slipping giving exchange-traded funds an opening. Roughly one out of every three fresh investment dollars is going to ETFs. According to a new report which surveyed 4,000 wealth investors which was released Wednesday by Cogent Research LLC, only 11 of 38 top fund families managed to create meaningful customer loyalty.

ETFXRAY Daily Insight: Technology, International ETFs Up

Global equity markets had another solid day with Japan, Europe and Latin America ending Tuesday in positive territory. iShares MSCI Brazil Index (EWZ) was up 1.96%, B2B Internet HOLDRs (BHH) was up 1.94%, iShares MSCI South Africa Index (EZA) was up 1.74%. The iShares MSCI United Kingdom Index (EWU) and the PowerShares Lux Nanotech (PXN) were both up 1.72% for the day. All of these ETFs with the exception of the B2B Internet HOLDRS are in the Chartwell ETF model portfolios.

Commodity, natural resources and homebuilding ETFs were down for the day and the only country-specific ETF with a down day was a small loss for the iShares MSCI Austria Index (EWO).

The CurrencyShares Canadian Dollar Trust (FXC) was also up 1.56% for the day and utilities ETFs also had another solid day indicating that ETF investors are both aggressively jumping back into international and technology ETFs but at the same time building up some of their more defensive positions. I call this the barbell strategy where investors split their portfolio into a capital preservation portfolio and a capital growth portfolio.

The sponsor of the iShares family of ETFs, Barclays Bank (BCS) confirmed that it is in talks with ABN Amro over a possible merger that would create Europe's second-largest bank, with a market capitalization of around $156 billion.

Gold closed near a three week high and the iShares Silver Trust (SLV) was up 1.18% for the day. While we have small allocations to both gold and silver ETFs in some of our more conservative portfolios, rising global industrial demand and rising investment demand is starting to have a real impact on silver prices.
Up to 13% reversals are common with SLV. However, a modest position in this commodity can yield above average gains.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Insight: International ETFs Jump, New Mortgage ETF

The week started off with a robust equity market around the world with international ETFs particularly strong with many country specific ETFs up 2% or more for the day. Markets are showing that investors seem to be coming back to international and large cap ETFs but are looking for a better balance and increasing allocations to fixed income and defensive sectors.

iShares FTSE/Xinhua China 25 Index (FXI) was the top performer up 3.2%, The iPath India ETN (INP) was up 2.9%, the SPDR S&P Oil & Gas Equipment & Services (XES) was up 2.8% and both the iShares MSCI Malaysia Index (EWM) and the iShares MSCI Austria Index (EWO) were up 2.7% for the day.

Emerging Portfolio Research (EPFR) reported that fund flows during the second week of March were shaped by big inflows into US Equity Funds that were driven by a single US exchange traded fund (ETF) investing in large cap stocks, more ambivalence about the prospects for emerging equity markets – especially those in Asia – and the rapid recovery of fixed income investors’ appetite for risk. The diversified Global Equity Funds and ETFs continued their winning ways.

U.S. numbers were driven by the $11.8 billion that flowed into the SPDR S&P 500 ETF (SPY) during the week the most significant number may be the $130 million that investors pulled out of Balanced Funds which invest in both equity and fixed income, as they ended their nine week winning streak. These funds and ETFs usually fare best when risk appetite is low. Global Utilities ETFs and funds saw their winning streak extended to seven straight weeks as investors continue to gravitate to this traditionally defensive sector.

On Friday, the iShares Lehman MBS Fixed-Rate Bond ETF (MBB) was launched despite all the attention on weakness in mortgage markets. The ETF tracks an index of investment grade fixed-rate mortgage-backed securities of government-sponsored mortgage issuers such as Ginnie Mae and Freddie Mac. Importantly, this new ETF does not hold riskier subprime loans, which are designed for lower-income homebuyers with weaker credit scores who don't meet banks' strictest lending standards.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Global Insight: Silver, Gold ETFs Lead

U.S. stocks moved lower Friday on unusually heavy volume. The Dow fell 1.4% for the week, as the S&P 500 lost 1.1% and the Nasdaq 0.6%. The Russell 2000, which tracks small-cap companies, was down 0.8%. Global markets were also down about 2% for the week. The The Producer Price Index was reported this week at 1.3%, higher than expected and consumer price indicators also indicated pricing pressure which will cause the Fed to hold off cutting rates. Did someone mention the dreaded word – stagflation?.

iShares MSCI Mexico Index (EWW) and the BLDRS Emerging Markets 50 ADR Index (ADRE) were both down 1.3% for the day with Brazil (EWZ) down 1.15%.

iShares Silver Trust (SLV) was up 1.25%, iShares S&P Global Telecommunications (IXP) was up 1.2% and iShares COMEX Gold Trust (IAU) was up 0.90% for the day. At least part of the steady demand for gold and silver has been the continued success of the gold exchange-traded funds, which now hold more than 15 million ounces and 1.4 million ounces of bullion, respectively. Worldwide, buying via the ETFs accounted for almost 19% of the total 43.5 million ounces purchased by investors in 2006.

HealthShares has introduced nine new health ETFs. The non-pharmaceutical healthcare sector has been performing well despite the overall weak market.

• Metabolic-Endocrine Disorders Index (HHM)
• Autoimmune-Inflammation Index (HHA)
• Cancer Index (HHK)
• Cardiology Index (HRD)
• Composite Index (HHQ)
• GI/Gender Health Index (HHU)
• Respiratory/Pulmonary Index (HHR)
• Neuroscience Index (HHN)
• Opthalmology Index (HHZ)

ETFXRAY Daily Insight: International ETFs Snap Back

While international markets showed some snap, U.S. markets inched higher Thursday in a much calmer trading session with the Russell 2000 index gaining the most ground back up 1% today and is now off 0.5% on the year.

Tokyo's Nikkei 225 climbed 1.1%, In Hong Kong, the Hang Seng Index rose 0.7%, Australia's S&P/ASX 200 ended 1.9% higher, China's Shanghai Composite Index finished 1.6% higher, Seoul's Kospi added 1.4% and Taiwan's Weighted Price Index traded 1.7% higher. European markets did even better with as the pan-European Dow Jones Stoxx 600 index climbed 2% with Spain the strongest market up 2.48%.

The best exchange-traded fund or ETF for the day was the Market Vectors Gold Miners (GDX), a basket of gold mining companies whose shares had been beaten down by the more popular gold ETFs like (IAU). Materials Select Sector SPDR (XLB) was up 1.95% and the iShares MSCI Australia Index (EWA) rebounded up 1.75%. Lower oil prices led to iPath Goldman Sachs Crude Oil TR Idx ETN (OIL) being the worst ETF of the day down 1.03%.

TD Ameritrade (NasdaqGS:AMTD) plans to offer an ETF that rebalances frequently. The ETF will be a "life cycle" ETF with a target date for the investor, who will choose a year close to when he plans to retire. Life-cycle funds invest in multiple asset classes and become more conservative as time passes. Xshares Advisors is listed as the investment adviser for the Ameritrade ETFs.

PowerShares has another kind of asset allocation ETF in registration, based on risk. The ETF will be based on a set of indexes chosen monthly by a manager. Instead of creating an ETF made up of other ETFs, this one will invest directly in the underlying securities, duplicating the manager's choices.

By Carl Delfeld of the Chartwell ETF Advisor

ETFXRAY Daily Insight - ETF Investors Rotate to the U.S.

After the Dow Jones Industrial Average posted its second-biggest drop in nearly four years on Tuesday, the Dow slipped below the 12,000 mark intraday on Wednesday before rebounding and joining the S&P 500 and Nasdaq to finish in positive territory. In a reversal of yesterday’s fortunes, it was Asia and Europe that lost their footing with markets and exchange-traded funds across the regions down significantly.

In Mumbai, the Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, dropped 3.5%. More-developed markets also dropped. Singapore's benchmark Straits Times Index shed 3.3% and Hong Kong's benchmark Hang Seng Index fell 2.6%. The pan-European Dow Jones Stoxx 600 index dropped 2.5% with broad-selling pressure across all sectors and its banking sector losing 3.4%.

After U.S. financial sector ETFs tumbled on average 3.2% yesterday, fear of contagion from the subprime mortgage group sent the sector down as much as 1.5% today before it recovered pulling the rest of the market with it. This is an opportunity to take a position in global and international financial ETFs since they are attractively priced and the vast majority of the highest weighted companies will not be substantially impacted by even the worst case scenario for the U.S. subprime market.

Sensing that the real estate negativity was out of proportion to the risk, investors lifted the iShares Dow Jones US Home Construction (ITB) up 3.13% for the day. The iShares FTSE/Xinhua China 25 Index (FXI) also broke ranks with the rest of Asia as it rose 2.25% for the day. Latin America was mixed but the iShares MSCI Brazil Index (EWZ) and iShares MSCI Mexico Index (EWW) were both up 1.8%.

This past week's volatility is showing that markets are not going in lockstep but moving in unpredictable and inconsistent manner raising the value of global diversification. Investors are likely repositioning assets to levels they are comfortable with over a longer time horizon.

In fact, an examination into flows into exchange traded funds, or ETFs, signals that According to fund tracker TrimTabs, U.S. ETFs registered $1.4 billion of inflows in the first five days of March -- while global ETFs posted outflows of about $1.4 billion. This is backward looking data indicates that portfolio managers are rotating into U.S. securities and away from foreign markets.

ETFXRAY Daily Insight - U.S. ETFs Hit Hard

On Tuesday, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite Index were each off about 2% for the day. Nasdaq is 2.7% lower on the year. Each of the three indexes suffered its second-biggest decline of the year.

The Russell 2000 index, which focuses on small stocks, ended down 2.5%. The culprits were weak retail-sales data and the report that delinquency rates for subprime adjustable-rate mortgages reached 14.44% in the fourth quarter of last year, jumping 1.22 percentage points in three months. Investors in European markets and exchange-traded funds fared better as markets fell on average 1% with no markets in positive territory for the day. Asian markets and ETFs were split with Japan down after three straight up sessions and Taiwan, Thailand, Philippines, India and China up for the day. Oddly, the lower risk, higher quality markets in Asia had a rougher time today.

It was telling that the iShares Lehman 20+ Year Treasury Bond (TLT) was, aside from the short ETFs, the best performing ETF for the day up 0.60%. The two hardest hit ETFs were the iShares MSCI Malaysia Index (EWM), down 4.97% and iShares MSCI South Africa Index (EZA), down 5.65%.

This year’s more volatile market is driving investors to search for more ways to hedge their portfolios but a March 5th report from Merrill Lynch shows that many traditional asset classes are now too correlated. Merrill suggests five areas that may work to buffer your portfolio: high-quality government and corporate bonds, cash, commodities, gold and, within the stock market, the consumer-staples sector. The Consumer Staples Select SPDR (XLP) didn’t work very well today since it was down 1.9%.

The Chartwell ETF Advisor also uses modest amounts of inverse ETFs is some of its portfolios which go opposite market indexes. For example, the Short S&P500 ProShares (SH) ETF was up 2.09% today.

By Carl Delfeld of the Chartwell ETF Advisor

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Asian ETFs Up - Common Sense Biotech ETF

Who says that global equity markets all move together? While U.S. markets got their sea legs during a lackluster Monday, Asia showed strength and independence. Latin America and Europe were down across the board with the pan-European Dow Jones Stoxx 600 index falling 0.4% at 366.02.

It seems that Asia is not overly concerned about the U.S. housing market as Tokyo's 225-issue Nikkei average ended 0.8% higher at 17292.39. Hong Kong's Hang Seng Index closed 1.6% higher at 19442.42. In Tokyo currency trading, the dollar fell to ¥118.18 in late afternoon trading. Australia's S&P/ASX 200 finished 1% higher at 5891.00 and South Korea's Kopsi ended up 1.3% at 1441.33. Singapore's Straits Times Index finished up 1.2% at 3182.68 and Taiwan's Weighted Price Index closed 0.8% higher at 7629.15. To top off the welcome news for still jittery Asian investors, China's Shanghai Composite Index ended 0.6% higher at 2954.91.

Some of the exchange-traded funds that track these indexes led the day with the iShares MSCI Australia Index (EWA) was up 2.56%, the iShares MSCI South Korea Index (EWY) was up 2.03% and the iShares MSCI South Korea Index (PGJ) finished the day up 2.02% though still down 3.4% so far this year. With all the talk about the weak subprime mortgage sector, it is no surprise to fund the iShares Dow Jones US Home Construction (ITB) as the weakest ETF of the day down 3.23%.

In a crowded ETF marketplace, First Trust’s stable of ETFs may not be getting due credit for a common sense approach to weighting companies in their ETF baskets. Take the Amex® Biotechnology Index Fund (FBT) ETF which contains 20 biotech companies. Rather than a fancy formula or conventional market value weighting, First Trust just weights them roughly equally. I have often thought that there is an opportunity for an ETF family that did this across the board. Especially in this uncertain sector, is it possible to predict the winners? The companies selected for the basket area cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.

FBT was launched last June at $20 at closed today at $22.30. Investors should watch this ETF and consider it as more conservative than market cap weighted competitors. I always have trouble getting over valuations in the biotech sector which of course always look expensive but the recent pullback may be an opportunity. The average company in the FBT basket is trading at 10 times sales and five times book. Below is this ETFs top holdings and chart.

Holdings Percent (%)

Gilead Sciences, Inc.
5.93

Millipore Corporation
5.86

Invitrogen Corporation
5.78

Affymetrix, Inc.
5.72

ImClone Systems Incorporated
5.37

Amylin Pharmaceuticals, Inc.
5.28

Millennium Pharmaceuticals, Inc.
5.24

Celgene Corporation
5.15

Genentech, Inc.
5.06

MedImmune, Inc.
5.05

ETF Daily Global Insight: Global ETF Markets Calm

Global markets were flat and directionless as if exhausted by the last week’s volatility. Europe was up across the board and Asian markets were generally up slightly with Japan off just a bit. Gold and oil rose modestly and weaker than expected jobs data was received warmly as evidence that inflation would remain muted. Real estate was one of the hardest hit sectors. I would stay far away from this area and I have added a short ETF position in real estate construction to our most aggressive portfolio. This position is up 9% in the last week alone.

Oil Services HOLDRs (OIH) and the iShares Dow Jones US Oil Equipment (IEZ) were up 2.34% and the PowerShares Dynamic Oil & Gas Services (PXJ) was up 2.32% for the day. The biggest loser for the day was the DJ Wilshire REIT ETF(RJR) which was down 1.5% and the iShares MSCI Mexico Index (EWW), down 1.52%.

ETF Daily Global Update: Asia, Latin America Lead Global ETF Rally

Wall Street snapped back Tuesday as investors were encouraged by a recovery on global markets and moved to recoup some of the big losses suffered during last week's sharp pullback. Solid gains in overseas markets and exchange-traded funds or ETFs set the stage for the comeback, despite some shaky U.S. economic data that posed a fresh threat to the dollar and raised the specter of inflation once again.

The Japanese yen, which in the past week climbed about 4% amid concerns that carry trades were being rapidly unwound, fell against the U.S. dollar and other major currencies helping the Nikkei 225 index to its first positive finish in six sessions with an increase of 1.2%. While the Dow Jones industrials was up more than 150 points and European stock markets also rose with the FTSE 100 up 1.3%, it was Asian and Latin America markets and ETFs that led the global rally.

iShares MSCI Malaysia ETF (EWM) was the leading ETF today up 6.56%, the iShares MSCI Brazil ETF (EWZ) was up 6.39%, the iShares MSCI Australia ETF (EWA) was up 6.22%, the iShares MSCI Singapore ETF (EWS) was up 5.44%, the iShares FTSE/Xinhua China 25 ETF (FXI) was up 5.89%, the iShares S&P Latin America 40 ETF (ILF) was up 4.93% and the iShares MSCI South Korea ETF (EWY) was up 4.51%. In Asia, only the Philippines and Taiwan iShares MSCI Taiwan ETF had down markets for the day.

Amazingly, no equity ETFs were down for the day but some bond ETFs suffered marginal declines. It will be interesting to see if this momentum carries into tomorrow.

By Carl Delfeld of the Chartwell ETF Advisor

ETF Daily Global Update: World ETF Selloff Continues

The bloodletting continued around the world on Monday as the Dow, S&P 500 and Nasdaq all lost ground with the least damage amongst the larger cap exchange-traded funds or ETFs like (DIA) and (XLG) while the Russell 2000 ETF (IWM) was down 1.98%. European markets were down across the board with volatility up 9%. Asia was the worst hit with Hong Kong down 4% for the day and the stronger yen impacting big exporters like Toyota which was off 3.24%. The blue chip Nikkei 225 was down 3.3%. The U.S. dollar weakened against the yen by about 1% but held its own against all other major currencies.

The Malaysian ETF (EWM) was down 6.64%, Australia (EWA) lost 5.81%, the Powershares China (PGJ) lost 4.3% and the South Korean KOSPI index (EWY) was down 2.7%.

The big winners were of course the inverse ETFs that move opposite markets with the ProShares Ultra Dow Jones U.S. Real Estate ETF (SPS) up 7.39% for the day. SPS moves 200% opposite of the underlying index. U.S. real estate tracking ETFs were hit very hard again today.

At some point, prices will settle at levels sure to bring out the bargain hunters. According to the Financial Times, the cheapest stock market indexes on a price to earnings basis are Thailand trading at 9.5 times earnings, Brazil at 11.9 times, South Korea at 10.9 times, Germany at 13 times, Brazil at 11.8 times and the Netherlands at 11.8 times earnings.

By Carl Delfeld of the Chartwell ETF Advisor

ETF Daily Global Update: Yen and Risk Only Winners

Major indexes around the world finished trading on Friday down about 5% for the week. While most of the headlines this week were about sharp stock market and ETF pullbacks in America and Asia, European equity markets gave up opening gains and turned lower today, heading for weekly losses of nearly 5 per cent. Today, very few ETFs were up for the day with of course the exception of the inverse ETFs. Silver (SLV) lost 4.89% for the day.

One ETF that stood out was the Rydex Japanese Yen ETF (FXY) that was up 0.66% for the day. Japan’s currency has already gained almost 3 per cent this week, the biggest increase since late 2005, and was at 117.66 against the dollar in late trading in Tokyo on Friday. This stronger yen has led to weaker equity markets in Japan because it hurts large Japanese exporters and exports have been the key impetus behind Japan's stronger economic growth. But for Japan ETF investors, a stronger yen will somewhat offset these negatives since the ETFs are not hedged meaning a stronger yen will help returns.

For global exchange-traded fund or ETF global investors and advisors, this has been a humbling and hand wringing week. But not everything went down this week. Up, went stock market volatility, credit spreads on corporate bonds, as well as emerging-market debt and the price of default insurance and as mentioned , the value of the yen.

But something else went up this week and that is investor awareness of risk and the inescapable fact that markets fluctuate and that returns for different assets move in cycles. Global ETF portfolios that do not incorporate these facts will, over time, run amok. My view is that we are entering a more difficult stage of global investing during which investors will need to be more contrarian, have more hedging positions in their portfolio and have good risk management tools in place. Contact me if you would like a copy of my most recent article "How to Build Your Own Global ETF Hedge Portfolio".

By Carl Delfeld of the Chartwell ETF Advisor

ETF Daily Global Update: Some International ETFs Snap Back

By Carl Delfeld of the Chartwell ETF Advisor

U.S. markets steadied on Wednesday with most major indexes up about 0.5% and are flat for the year. Overseas results were mixed. Japan's Nikkei stock average fell 2.85 percent, while Hong Kong's Heng Seng index ended down 2.46 percent. The benchmark Shanghai Composite Index rose 3.94 percent. Britain's FTSE 100 closed down 1.82 percent, Germany's DAX index finished down 1.53 percent, and France's CAC-40 was down 1.29 percent.

GDP numbers were revised downward on inventory adjustments but most troubling to the market was that new-home sales plunged 17% in January, falling to the lowest level in nearly four years. There are also signs that the carry trade whereby investors borrow in low interest rate currencies like the yen and Swiss franc and then invest in higher risk, higher rate currencies and equities may be unwinding with the money coming home.

Many international exchange-traded funds or ETFs clawed back a fair portion of yesterday’s losses. The China ETF (FXI) was up 4.32%, India (INP) was up 3.59%, South Africa (EZA) up 3.08%, Taiwan (EWT) up 2.8% and Mexico (EWW) was up 2.75%. The streetTracks TITAN ETF (DGT) which tracks the largest companies was also up 2.76% for the day. The new First Trust Nasdaq 100 ex-tech ETF (QQXT) took it on the chin today down 4.27% and as expected with the weak new home construction numbers, the iShares Dow US Home Construction ETF (ITB) was down 1.57%. The Chartwell ETF Advisor added a short position in this sector to one of its portfolios earlier in the week.

After a day like yesterday, some ETF investors may wish they had some of the new UltraShort ProShares ETFs sprinkled in some of their portfolios to act as a shock absorber. These leveraged ETFs that move 200% with (Ultra) or inversely (Ultra Short) to Russell indexes. I am looking forward to some inverse ETFs that cover international and emerging markets.

ETF Daily Update: Global ETFs Hammered

By Carl Delfeld of the Chartwell ETF Advisor

What a start for the year of the pig! While major U.S. indexes lost 3-4% on Tuesday, Asian exchange-traded funds or ETFs fell further led by the China ETF (FXI) which lost 9.9% for the day. The Chartwell ETF Advisor had sold FXI earlier this year to lock in gains from its 84% rise in 2006.

The Malaysian ETF (EWM) which up to today had been the best performing market in Asia fell back 8.1% and the second best market Singapore (EWS) lost 7.8% which reflected the seemingly indiscriminate selling. The Hong Kong ETF (EWH) fell 7.4%, Taiwan (EWT) lost 5.2% of its value and South Korea (EWY) was down 6.4% for the day.

But the selling was not confined to Asia or emerging markets for that matter. The Swiss ETF (EWL) was down 4.96%, Australia (EWA) was down 4.75% and Sweden (EWD) was down 6.24%. The Brazil ETF (EWZ) lost 8.6%. Japan (EWJ) was one of the best performers down 2.38% for the day.

The First Trust family of exchange-traded funds or ETFs announced yesterday through a press release that it is working with the International Securities Exchange to introduce three new ETFs.

One ETF will track a basket of companies that derive a significant portion of their revenue from the water business. Another ETF will do the same for companies in the natural gas industry. Both of these ETFs are expected to be available to investors in May of this year and do not yet have ticker symbols.

The third ETF will be launched later in the year is a Chindia (China-India) ETF which will track a basket of Indian and Chinese companies that are listed on U.S. exchanges. These three new ETFs will add to the stable of First Portfolio's twelve ETFs now available to ETF investors

Daily Global ETF Update: Utilities Rise, Mexico Slumps

By Carl Delfeld of the Chartwell ETF Advisor

American markets on Monday closed down across the board with transport and financial sectors hit hardest. Some markets in Asia welcomed back the first day of trading with up markets. The Taiwan market was up 1.16% and the Shanghai Composite index rose 1.67% for the day. Japan and Australia (EWA) also finished slightly up. European markets were up across the board with exception of Switzerland (EWL). Markets in Chile and Mexico lost 1.6%.

The utilities ETFs were the top performers on Monday with the Utilities HOLDRS (UTH) up 3.02 % and the SPDR Utilities ETF (XLU) up 2.38% and 23.25% during the past year. The Mexico ETF (EWW) lost 2.52% followed by the Dow Jones Transportation ETF (IYT) down 2.2%.

The best performing iShares ETFs year to date through Friday’s close were: Malaysia (EWM) up 18.9%, Transportation (IYT) up 13.4%, Cohen & Steers Realty (ICF) up 12.2%, and Singapore (EWS) up 11.2%. The worst were China (FXI) down 3.7%, Global Energy (IXC) down 2.5%, Taiwan (EWT) down 2.1% and US Home Construction (ITB) down 2%. The best performing global sector ETFs during the last 12 months have been Global Telecoms (IXP) up 36%, Global Materials (MXI) up 33% and S&P Global Utilities (JXI) up 30%.

WisdomTree’s latest ETFs tilt to companies that have higher net income or earnings yield. The tracking indexes use "core earnings" as defined by Standard & Poor's. Two of these launched last week target the 100 large-cap companies with the highest earnings yields, and the stocks with the lowest P/E ratios: WisdomTree Earnings Top 100 Fund (EEZ) and WisdomTree Low P/E Fund (EZY). The Chartwell ETF Advisor added (EEZ) today to one of its seven model ETF portfolios.

ETF Daily Global Update

By Carl Delfeld of the Chartwell ETF AdvisorAs U.S. markets lost ground on Friday, some global exchange-traded funds or ETFs showed strength. The Australia ETF (EWA) hit new highs up 1.66% for the day and the SPDR Russell/Nomura Japan Smallcap ETF (JCS) was up 1.67% on speculation that despite the benchmark interest rate hike this week, policymakers will put the emphasis on stimulating growth. The silver ETF (SLV) was up 2.42% for the day and precious metal ETFs did very well for the week. The China (FXI) and India (INP) had another bad day both down 3% reflecting global investor’s desires to make their portfolios a bit more conservative. Some real estate related ETFs continue to show weakness attracting shortsellers. The Cohen & Steers Real Estate ETF (ICF) was down 2.08% and the Dow US Home Construction ETF (ITB) was down 1.95% for the day.

Global real estate ETFs are a different matter as they continue to attract great interest. The new International Real Estate ETF has been one of our most viewed posts so here is a little more on SPDR DJ Wilshire International Real Estate ETF (RWX). This ETFs objective is to closely match the returns and characteristics of the total return performance of the Dow Jones Wilshire Ex-US Real Estate Securities Index (ticker: DWXRS), an equity index based upon the global (ex-US) real estate market.
The top five country weightings are Australia 19.97%, United Kingdom 19.01%, Japan, 17.93%, Hong Kong 8.03%, Canada 7.02%.

With exchange-traded funds or ETF growing so rapidly - shakeout perhaps sparked by a market pullback is inevitable. Those that are too narrowly focused, have low trading activity, minimal assets, sponsored by smaller ETF families without the muscle to advertise and distribute are just some of the factors that will determine ultimate success or failure. My advice is to take a little time to do some homework before grabbing a new ETF off the shelf. Think it through to see if it really makes sense for your portfolio and , above all, look under the hood of the ETF to see what companies are inside.

ETF Daily Global Update

By Carl Delfeld of the Chartwell ETF Advisor

Major U.S. indexes lost ground on Thursday with the exception of Nasdaq which was up slightly on the back of a surge in semiconductor stocks. The biggest ETF gainer of the day was the Proshares Ultra Semiconductor ETF (USD) up 4.61% followed by Semiconductor HOLDRS (SMH) up 2.67%. The Biotech HOLDRS (BBH) lost 1.28% and weak house building sentiment pushed the SPDRS Homebuilders (XHB) down 1.52%.

A weaker yen helped the Nikkei 225 cross the 18,000 level for the first time in almost seven years and South Korea (EWY) and Australia (EWA) hit new highs. Europe was up across the board with the exception of Belgium. The South Africa market rose 1.49% and Latin America showed its resilience with Brazil (EWZ) reaching new high and Chile up 1.53%.

The India ETN (INP) continued its slide down 1.74%. INP's largest two holdings, Infosys Technologies and Reliance Industries make up more than 25% of its basket. Strong consumer confidence surveys have helped consumer oriented ETFs and two of the Powershares consumer ETFs which weight companies in their ETF baskets based on fundamentals, (PRFG) and (PEZ), boast the best returns year to date, 7.65% and 5.98%.

The gap between the returns on a fund and its index is known as tracking error and the smaller the better is usually best for ETF investors. With some exceptions, ETFs listed in the U.S. had a low index-tracking error in 2006, meaning they delivered returns fairly in line with their target benchmarks, according to a report from Morgan Stanley. Tracking error in 2006 averaged 0.29% for U.S. major-market ETFs, 0.33% for U.S. "style" ETFs, 0.61% for U.S. sector and industry funds, 0.72% for international portfolios, and 0.09% for fixed-income ETFs. The Power Shares family of ETFs had the highest average tracking error at 0.71% and the highest average ETF expense ratio at 0.59%.

ETF Daily Global Update

By Carl Delfeld of the Chartwell ETF Advisor

Inflation concerns, mixed earnings and oil prices closing above $60 for the first time this year sent U.S. stocks lower Wednesday. In Asia, Hong Kong rose and Japan was flat showing no clear reaction to decision by Bank of Japan to increase benchmark interest rate from 0.25% to 0.50%. The interest rate hike is a sign of confidence in the Japanese economy and should help prices going forward. Europe lost ground with the exception of the Netherlands (EWN).

Precious metals and oil ETFs shone today with the Market Vectors Gold Miners ETF (GDX) snapping back 3.79% today, the iShares gold ETF (IAU) up 2.91% and the silver ETF (SLV) up 2.86%. The WisdomTree International Utilities ETF (DBU) lost 1.26% and the Switzerland (EWL), UK (EWU) and Spain (EWP) ETFs all lost 1%.

After a stellar 2006, the exchange-traded fund or ETF that tracks the MSCI Emerging Markets Index (EEM) has risen 2.9 per cent, compared with 3.76 per cent for the MSCI World Index. Investor inflows into emerging market funds remain strong but have slowed from the stellar pace seen at the start of last year

The WisdomTree family of exchange-traded funds or ETFs announced today that they will list six domestic earnings-weighted ETFs this Friday, February 23. These new ETFs are aimed primarily at ETF investors seeking broad market exposure or exposure to traditional sector classifications through companies with an earnings track record.

WisdomTree Total Earnings Fund (EXT)
WisdomTree Earnings 500 Fund (EPS)
WisdomTree MidCap Earnings Fund (EZM)
WisdomTree SmallCap Earnings Fund (EES)
WisdomTree Earnings Top 100 Fund (EEZ)
WisdomTree Low P/E Fund (EZY)

ETF Daily Global Update

By Carl Delfeld of the Chartwell ETF Advisor

American stocks and exchange-traded funds (ETFs) moved slightly higher Tuesday in a quiet market helped by merger news. Many Asian markets were closed for the China New Year holiday with South Korea, Australia and Japan flat. European markets across the board were down slightly on low volume.

The Powershares Consumer Discretionary ETF (PEZ) and the Healthshare Emergency ETF (HHJ) were both up 1.62% for the day. The Russell 1000 Growth ETF (IWF) was up 1.34%. With oil prices off dollar the SPDR Energy ETF (XLE) was off 1.05% but the M