ETF XRAY

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

(Click Images for larger view)

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:

(Click image for larger view)

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.

(Click image for larger view)

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%.

(Click image for larger view)

DE Smith | MyPortfolioView

Five New Real Estate ETFs

The iShares family of exchange-traded funds are not content to sit on their lead. The have introduced five iShares Funds designed to track the FTSE NAREIT Indexes. With an annual expense ratio of 0.48%, the new iShares Funds trade on the NYSE and provide targeted exposure to the U.S. Real Estate Investment Trust (REIT) market. The new funds are:

iShares FTSE NAREIT Residential Index Fund (ticker: REZ)

iShares FTSE NAREIT Industrial/Office Index Fund (ticker: FIO)

iShares FTSE NAREIT Retail Index Fund (ticker: RTL)

iShares FTSE NAREIT Mortgage REITs Index Fund (ticker: REM)

iShares FTSE NAREIT Real Estate 50 Index Fund (ticker: FTY)

In a press release, Noel Archard, Head of iShares Product Development summed up the benefits of REIT exposure for ETF investors: "REIT exposure generally offers several useful portfolio attributes, such as lower correlation to the broad equity and bond markets along with higher dividend yield. The iShares FTSE NAREIT Funds should provide investors with income and portfolio diversification benefits, in a cost-effective manner."

By Carl Delfeld of the Chartwell ETF Advisor

Real Estate ETFs Rebound

REAL ESTATE ETFS UP 6% YTD. The point & figure chart below shows the battle waged in the real estate sector to maintain its double digit growth rate in 2006. (The chart tracks the conbined value of 100 shares of each real estate ETF) The bottom yellow shaded area shows the value of these five ETFs at the beginning of the year at $40,812. The sector grew 14% this year to reach $46,407 by the middle of February. Currently these five ETFs are in recovery mode fighting to regain their footing. The sector is still up a respectable 6% YTD gain at $43,427.

DE Smith | MyPortfolioView.com

iShares Cohen & Steers Realty Majors (ICF)

Ishares Cohen & Steers Realty Majors Index Fund (ICF) started out the year with a bang until it reversed in February to a column of O’s and its worst reversal in five years. ICF is back in a column of X’s and fighting to move higher. Looking back over the last five years ICF has spent very little time in supply. It is also interesting to point out that when ICF has reversed into a column of O’s the time has been brief. The most time spent in supply (column of O’s) was back in 2005 from August to October.

Moving averages: 50 day $106.20 | 200 day $97.51

Click on Image for Larger View -

By DE Smith of MyPortfolioView

iShares Dow Jones US Real Estate (IYR)

Everything trading in the market including exchange traded fund IYR has to fight its battle between supply and demand. Over the last five year IYR has spent the majority of time in demand. A careful observation reveals that the most recent reversal into supply and a column of O’s is the most severe in 5 years causing IYR to loose 12 points. IYR is worth watching and has already reversed back into a column of X’s.

DE Smith of MyPortfolioView.com

Real Estate Exchange Traded Funds with Dividend Yields

By DE Smith of MyPortfolioView.com

Not only have Real Estate ETFs rewarded their investors with double digit returns they’ve done it while earning their owners a nice dividend yield.

Real Estate ETFs in order of dividend yield.
1. VNQ – Vanguard REIT Index ETF (5.14%)
2. RWR – DJ Wilshire REIT ETF (4.63%)
3. ICF – iShares Cohen & Steers Realty Majors (3.51%)
4. IYR – iShares Dow Jones US Real Estate (1.86%)

The attached “Overview” chart from MyPortfolioView.com illustrates the growth of Real Estate ETFs over the last 13 months. Each Exchange Traded Fund (ETF) is tracked based on supply and demand on a unique point and figure chart. The newest ETF SPDRs international ETF (RWX) is off to a nice start with 8.17% YTD growth.

Real Estate ETFs Shine

By Carl Delfeld of the Chartwell ETF Advisor

The iShares Cohen & Steers Realty Majors ETF (AMEX:ICF) was the second best-performing ETF the past month with a 14.9% return. Many ETF investors have been shying away from real estate ETFs because they are unaware that they are focused on commercial real estate rather than residential properties.

Nancy Gondo of IBD writes that at the beginning of this year, this ETF owned 30 Real Estate Investment Trusts, or REITs. By contrast, DJ Wilshire REIT held 85 stocks, iShares Dow Jones Real Estate 86 and the Vanguard REIT Index 106. The fund's top 10 names made up nearly 60% of total net assets at the end of last year. The three other ETFs had no more than 46% in their top 10 stocks. Simon Property Group (NYSE:SPG - News) was Cohen & Steers' top holding at the end of '06, accounting for nearly 8% of assets. The No. 1 U.S. REIT has risen more than 35%.

SPG which keeps finding support at its 10-week moving average, has logged five up weeks in a row. The fund's second biggest holding, Vornado Realty Trust (NYSE:VNO - News), cleared a two-month base Wednesday on huge volume. The New York REIT, which owns office and retail properties, ended three quarters of declines in funds from operations the past two quarters.

SPDR DJ Wilshire International Real Estate ETF (RWX)

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). The Funds Objective according to their fact sheet 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.

Country Weights

Australia 19.97%                     Spain 1.41%    

United Kingdom 19.01%         Switzerland 1.09%    

Japan 17.93%                         Germany 1.03%    

Hong Kong 8.03%                   Italy 0.80%    

Canada 7.02%                        Belgium 0.68%    

France 5.49%                         South Africa 0.54%    

Netherlands 5.34%                 New Zealand 0.53%    

Singapore 5.01%                    Thailand 0.04%    

Austria 4.36%                          Unassigned 0.02%    

Sweden 1.70%