ETFs: 2010 And The Outlook For 2011

January 2011

ETF Report started out in 2000 as a newsletter focused on ETF investors, making it the very first ETF-centric publication in the market. Since then, ETF Report has blossomed into a monthly magazine for the growing community of advisors that use ETFs in their clients' portfolios.

In each issue, ETF Report shows advisors how they can improve client outcomes and increase their business with ETFs by interviewing the leading ETF strategists and asset managers in the industry. Subscribe now!

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ETF Features

 XVIX: A Complex But Intriguing VIX Strategy

The first volatility-focused exchange-traded products launched in January 2009, during a stock market meltdown. Almost two years later, there are now 13 such products, including the recently launched UBS E-Tracs Daily Long-Short VIX ETN (XVIX), an indication of enduring interest in investable volatility strategies.

ETF Departments

 A Slew Of Volatility ETNs Debut

The selection of U.S.-listed exchange-traded notes tied to market volatility has expanded dramatically in recent weeks.

ETF Departments

 Eaton Vance Acquires Managed ETFs LLC

Eaton Vance, the Boston-based firm known largely for its lineup of closed-end funds, recently acquired Managed ETFs LLC, a firm co-founded by longtime ETF industry figure Gary Gastineau. Managed ETFs owns a number of patents that could help Eaton Vance break into ETFs. Terms weren’t disclosed.

ETF Departments

 New Global X ETF Tracks Uranium

In early November, Global X rolled out the first U.S.-listed ETF to focus on uranium, bringing to five the number of metals ETFs on the market.

ETF Departments

 Kauffman Report Roils Waters

A 60-plus-page report released in early November by the Kauffman Foundation said that exchange-traded funds are the “main” cause for the slowdown in the U.S. IPO market, restricting the access that smaller companies have to capital.

ETF Departments

 iShares Unveils Short-Term TIPS ETF

In December, iShares rolled out a bond fund focused on short-term Treasury inflation-protected securities, or TIPS, zooming in on a part of the yield curve that many see as the place to be if this year’s bond rally unravels.

ETF Features

 Junk Bond Arena Features Quality ETFs

In times of financial turmoil, investors often look for high-yield investments; certainly the recent wave of MLP exchange-traded products was spurred in part by growing demand for income-generating investments. High-yield corporate debt is another area that holds appeal for investors looking for yield, and though there has been no explosion of junk-bond ETPs in recent months, the asset class already represents a sizable portion of ETF assets under management—almost 10 percent of U.S. fixed-income ETF assets, according to the National Stock Exchange’s November data.

ETF Departments

 ETFS Rolls Out ‘White Metals’ ETF

In early December, ETF Securities rolled out the first ETF that wraps the so-called white metals—silver, platinum and palladium.

ETF Features

 TIPS Of The Iceberg

TIPS funds are growing fast. Since the launch of the first fund in 2003, TIPS ETFs have grown into a $22 billion category, with several new launches announced this year. BlackRock’s iShares Barclays TIPS Bond Fund (NYSE Arca: TIP) accounts for the lion’s share of the market today with $20 billion in assets, but recent offerings from Pimco and Vanguard are gaining ground, and new funds continue to launch. But does any of this TIPS frenzy make sense?

ETF Cover Story

 ETFs: 2010 And The Outlook For 2011

As this issue of ETFR goes to press, the U.S. ETF industry just cleared a major milestone: Total industry assets under management have reached the magic $1 trillion barrier. Pop the champagne corks!

ETF Data

 U.S.-Listed ETFs Sorted By Asset Class And Year-to-Date Returns

Our monthly databank breaks down ETF returns for every market segment.

ETF Departments

 ProShares Trots Out Long/Short RAFI ETF

ProShares debuted a long/short U.S. equities ETF in December based on an index provided by the fundamental indexing firm Research Affiliates LLC. The Research Affiliates Fundamental Index (RAFI) methodolgy bases company weights upon criteria such as sales and dividends rather than market capitalization.

ETF Departments

 PowerShares Launches 4 Financial ETFs

Invesco PowerShares rolled out four ETFs in early December that are focused on different pockets of the financial industry.

ETF Departments

 SEC Bans Stub Quotes

The Securities and Exchange Commission approved new rules in November that prevent market makers in stocks and equity ETFs from using “stub quotes,” addressing one of the problems that fueled the “flash crash” on May 6.

ETF Departments

 iPath Family Expands With Leveraged ETNs

At the end of November, Barclays Capital launched 11 iPath ETNs providing long and short leveraged exposure to some popular indexes, including the Russell 1000, Russell 2000, S&P 500, MSCI EAFE, MSCI Emerging Markets Index and S&P 500 VIX Mid-Term Futures Index (which only underlies a “long” ETN).