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New NETS Real Estate ETF Expands Japan Menu

By Carl Delfeld of Chartwell ETF and ETFfolio

In managing the Chartwell World Country Rotation ETFfolio, I have learned to be flexible in choosing a proxy ETF for a given market. Japan is an excellent example of this strategy.

Instead of just reaching for the largest Japan ETF, the iShares MSCI Japan (EWJ) ETF, why not take a look at the broader NETS Topix (TYI)? For the last 12 months, using a Japanese yen ETF like the CurrencyShares Japanese Yen (FXY) would have been much better than suffering with Japan's sharp decline. I have also used the iShares small cap iShares Japan ETF (SCJ) to capture the value in smaller Japanese companies that are collectively trading below book value.

This is why I welcome the launch of the industry's first Japanese real estate investment trust ETF introduced by the Northern Trust NETS family of ETFs.

The NETS Tokyo Stock Exchange REIT Index Fund (JRE) launched on Monday marks the 16th NETS to hit the market. This new ETF makes a lot of sense due to the size of Japan's REIT market (10% of all global real estate investment opportunities) as well as the potential value it may unlock for investors.

Index Universe reports that recent data from Real Capital Analytics shows positive trends in Japanese real estate in terms of transaction levels compared with other global markets. Transactions in Japan have grown 11% in the first half of 2008, and Tokyo topped the list of office property sales, and Japan as a country only behind the U.S. in the office market with $12.6 billion in transactions.

So put JRE into your Japan ETF quiver as you aim at building a well diversified global ETF portfolio.

International Private Equity ETF Ready for Launch

By Carl Delfeld of the Chartwell ETF Advisor

While private equity is currently a bit out of favor, ETF investors should welcome the launch on September 27th of the PowerShares International Listed Private Equity (PFP) exchange-traded fund. This ETF will provide exposure primarily to European markets with the United Kingdom accounting for 23% of exposure followed by France at 18%, Australia at 16% and Japan at 13%.

This ETF is not a direct private equity play but rather offers diversified exposure to internationally listed companies whose primary purpose is to invest in as Powershares puts it "private, innovative and promising businesses".

The PowerShares International Listed Private Equity (ILPE) ETF tracks the Red Rocks International Listed Private Equity (ILPE) Index and includes more than 30 internationally listed companies with direct investments in more than 1,000 private global businesses. The ILPE Index is rebalanced and reconstituted quarterly and fund holdings are disclosed every day, giving investors a much higher level of transparency than is often available in traditional private equity funds.

Companies in the ETF basket are just about evenly split between mid cap and large cap categories. The top four companies in the index represent 35% of total expsoure. Backtesting shows the index outperforming the EAFE index by a handsome margin and the expense ration is 0.75%.

Find out more about Chartwell ETF's 7 Model ETF portfolios.

International Real Estate ETFs Compared

DRW started trading Tuesday June 5. It tracks an index made up of some 224 real-estate development and operating companies in 19 developed markets throughout Europe, Asia and the Far East.

June has been a tough month for international real estate ETFs. DRW is the new kid on the block and down -3.45%, RWX has also had a difficult June down -7.75% from its high during the same period.

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.

Real Estate Sector ETFs Moving Up

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DE Smith of MyPortfolioView

Exchange Traded Fund IYR Breaks Through Triple Bottom

IYR broke a triple bottom: The entire real estate sector is suffering and needs a positive catalyst. From the point and figure chart below IYR has never before broken through a triple bottom before. This pattern occurs when a series of 2 or more tops or bottoms is penetrated. Generally this is formed by 5 vertical columns; however it is possible for formation to be spread over multiple columns as shown below:

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DE Smith

SPDR DJ Wilshire Intl Real Estate (RWX)

State Street Global Advisors (SSgA)*, the investment management arm of State Street Corporation today announced that assets in the SPDR(SM) DJ Wilshire International Real Estate ETF (AMEX: RWX) have reached $500 million. It is the first ETF to provide investors with access to global real estate securities publicly-traded outside the US.

"A number of catalysts appear to be driving investor demand for international real estate exposure, including a very low correlation to the broader US and international equity markets," said James Ross, senior managing director of SSgA. "The significant inflows into the SPDR DJ Wilshire International Real Estate RWX ETF indicate that investors have quickly embraced this offering as a vehicle to gain more precise exposure to the global markets."

Launched on December 19, 2006, the SPDR(SM) DJ Wilshire International Real Estate ETF has emerged as the fastest growing ETF listed in the US during the past six months. As of March 7, assets under management in the fund totaled approximately $500 million.**

** Source: SSgA Strategy & Research as of March 7, 2007

DE Smith of MyPortfolioView

iShares Dow Jones US Real Estate (IYR) Under Pressure

Dow Jones U.S. Real Estate ETF under pressure as it extends recent weakness to mutli-month low (IYR) 82.42 - Price extends recent selling below its 200-day ma at 82.89 to a fresh multi-month low this morning. Next area of interest is the Dec.Jan lows at 81.69/82.01 followed by its late- November gap at 81.30.

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By DE Smith of MyPortfolioView

iShares Cohen & Steers Realty Majors (ICF) Just Moved Below its 200 DMA

ICF has just broken through a double bottom and with its top three holdings also in columns of O’s. This is a good time to evaluate any position held. Moving averages: 50 day $103.62 | 200 day $99.25. ICF is currently trading at $97.64.

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DE Smith of MyPortfolioView

Real Estate ETFs Off Their Highs

The Real Estate sector is obviously off its highs with three of the five key ETFs (ICF, RWR, and VNQ) recently reversing into columns of O’s. Despite the weakness in real estate it still pays: Consider the following yields 1) ICF…2.98%; 2) IYR…3.64%; 3) RWR …3.21%; 4) RWX…NA; 5) VNQ…2.62%.

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DE Smith | MyPortfolioView