Even though investors were momentarily gun shy about investing internationally after February’s Shanghai Surprise, interest in gaining exposure to ex-US stocks has once again gained its former allure. Ready to meet the demand is a suite of six recently launched emerging market SPDRs. All six are listed on the American Stock Exchange, track Standard & Poor’s indexes, and charge 60 basis points in expenses.
First Active ETF
The era of actively managed ETFs is set to begin. Bear Stearns became the first company to file a full prospectus for an actively managed ETF, submitting papers to the SEC on March 19 for a money-market-like fund called the "Bear Stearns Current Yield Fund." If approved, the fund will use active strategies in an attempt to deliver yields above and beyond the average money market account.
At the end of March, Barclays Global Investors launched its iShares S&P US Preferred Stock (AMEX: PFF). It's not the first preferred stock ETF to trade. Late last year, PowerShares offered its version of a preferred stock product, AMEX: PGF.
The sharp market downturn from February 26 to March 5 provided a microtest of how the seemingly endless array of fundamentally weighted, timeliness-seeking, dividend-focused and other specialty exchange-traded funds (ETFs) would perform under fire.
In an exquisite irony of timing, Barclays Global Investors launched its iShares Lehman MBS Fixed Rate Bond (AMEX: MBB), which provides exposure to mortgage- backed securities, mid-March amid a flurry of concern about rising delinquencies in the sub-prime loan market.