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Tuesday, November 11, 2008

3 ETF Stories

Here are some stories on the latest developments in ETFs and ETNs ...

Investors Sour on Exchange-Traded Notes

Investors yanked about $460 million from the 90 ETNs tracked by fund researcher Morningstar in September, a chunk of their $5.5 billion in overall assets.
October figures aren't yet available, but an early snapshot suggests they could be worse. About 12% of outstanding shares at iPath Dow Jones-AIG Commodity Index Total Return, the largest single ETN by far with $2.7 billion and run by a unit of Barclays PLC, were redeemed during the month through Thursday.
"We believe the outflows across commodity investment products, such as ETNs or ETFs, are only temporary," Barclays said. "The exchange-traded product market will continue to grow and there will continue to be new products offered to investors."
XX Sean's note -- I wonder how much of that rush to redemption has to do with the fact that AIG's name is on the fund, and AIG is about as popular on Wall Street right now as a leper at a nudist colony.

Triple Leverage ETFs Maximize Market Directions
Direxion has launched eight ETFs that are leveraged bull and bear funds designed to seek 300% of the daily performance, or 300% of the inverse of the daily performance, of the four indexes they track.

The new funds are:
Direxion Large Cap Bull 3X Shares (BGU)
Direxion Small Cap Bull 3x Shares (TNA)
Direxion Energy Bull 3x Shares (ERX)
Direxion Financial Bull 3x Shares (FAS)
Direxion Large Cap Bear 3x Shares (BGZ)
Direxion Small Cap Bear 3x Shares (TZA)
Direxion Energy Bear 3x Shares (ERY)
Direxion Financial Bear 3x Shares (FAZ)

Many ETFs Hit 52-Week Lows in October
Fears of a global slowdown and a strengthening dollar triggered a sell-off across all commodities, including gold, typically considered a safe haven amid uncertainty.
Inflows And Outflows
While investors dumped mutual funds this year, they bought ETFs.
They pulled $73.01 billion out of mutual funds across all categories in October, according to TrimTabs Data Research estimates. But they poured $4.33 billion into ETFs. Year to date investors took a net $199.37 billion out of mutual funds and put a net $83.60 billion into ETFs.


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