Markets finally saw the light at the end of the tunnel this week, as major indexes managed to push into positive territory after several dismal weeks of trading. Despite relatively high levels of volatility, stocks surged higher: the Dow Jones Industrial Averaged rallied near session highs while the S&P and Nasdaq also inched higher. As equity markets showed promising signs, investors clung to every word – or in this case, the lack of words – of Fed Chairman Ben Bernanke’s testimony to Capital Hill. When questioned on whether or not the Fed will take steps to boost economic growth, Bernanke indicated that the Fed is “still working” on the possibilities of further quantitative easing measures. On the Euro Zone front, government officials scrambled to conjure up a plan to support Spain’s debt-ridden economy. As Europe drama heats up once again, investors will likely be seeing some elevated levels of activity next week [see also Time To Buy EWZ? Think Again].
The ETF industry continued its sluggish summer pace with only two new funds hitting the markets this week. Despite the slowdown, investors were introduced to some rather intriguing products: Global X debuted its “Guru ETF”, which will be linked to an index that is comprised of publicly-disclosed equity holdings of certain hedge funds, while newcomer BNP Paribas rolled out their very first offering that will provide exposure to the commodities market.
Below we outline three of the best ETF stories from around the web this past week:
How You Can Follow The T-Bond Trend With ETFs at Money And Markets:
Unrest and turmoil within the economies of many European countries allows for stronger countries such as the US and Germany to finance their spending at extremely low rates. Investors can utilize these interest rate trends to benefit from the bond market. Similarly, ETF investors can can also prepare for an increase in interest rates by investing in inverse ETPs. In this article, Ron Rowland describes how ETFs can be utilized to benefit from both increasing and decreasing interest rates during this time of economic unrest.
How To Prepare For QE3 at IndexUniverse:
With job numbers announced at a stagnant 8.2% unemployment, investors are preparing for a probable third round of quantitative easing. ETFs that stand to profit from the Fed’s decision include gold, equities, and most other commodities. Unsurprisingly, dollar and bond prices will likely suffer in accordance with the Fed’s decision. Though the events following QE3 are unpredictable, ETF investors can take steps to prepare their portfolios. In this article, author Ugo Egbunike outlines his ETF “winners” and “losers” should the Fed provide another round of easing.
ETFs For “Hands Off” Investing at ETF Database:
The creation of hedge fund-like products has allowed for investors to embrace more sophisticated strategies when investing in ETFs. Passive ETPs allow for investors to tap into the benefits of such products without having to spend much effort actively managing their positions. Such funds are becoming increasingly popular as they take the guesswork out of allocating investments. In this article, Stoyan Bojinov outlines several ETPs that adjust in accordance to market trends and volatility.
Disclosure: No positions at time of writing.