By Paul Weisbruch

We recently combed industry databases and resources for listed ETFs and ranked them by Price to Earnings ratios, simply to see how various funds stacked up against each other. The results that we discovered were reasonably surprising to us, as the ETF with the lowest P/E ratio is a little known single country ETF that focuses on the Middle East, iShares MSCI Israel Capped Investable Market (EIS).

The fund has a stunningly low P/E ratio currently, at below 5 (4.94 to be exact), but the fund still largely evades the attention of most institutional managers due to its lower assets under management (currently approximately $80 million) as well as its low average daily volume which is south of 20,000 shares.

Despite the lower typical volume, we have noted that recent volumes are well above average levels, with one trading day last week where volumes crept above 100,000

By Scott Freeze

The last few weeks have brought to fruition the sell-off that we expected to slowly occur during the second half of the year, as per our write-up “The Great European Headfake of 2011” on May 31st. Our concerns were the “irrational exuberance” that was displayed in the market thinking that the EU problems were solved. As we saw, the kick the can approach to the EU issues is not effective and they still have larger concerns, but not as bad as currently being displayed.

While the PIIGS have continued issues and the contagion has infected some European banks (which was already priced into the market), the most recent collapse has occurred and accelerated greatly based on fears that Italy is the next to fail. We find it hard to believe that Italy will run into the PIIGS issues. They have a 2013 plan for a balanced

By Scott Freeze

We all awoke after the Memorial Day holiday to an exploding futures market and the “great” news that Greece will not default. It seems to be full steam ahead for the markets, but why? Are investors certain this isn’t just a one day head fake to make people believe that things are getting better? I don’t see it.

The Greek problem is not fixed. It is merely being prolonged and dangers to the rest of the EU continue to be prolonged. There are still numerous issues with the balance sheets in the EU, and investors seem to be looking the other way instead of delving deeper into the issues. How is Greece and more importantly, its bondholders, supposed to escape this problem unscathed? I don’t see any legitimate possibility for the EU or the companies holding Greek debt to not suffer greatly when this issue finally comes

By Paul Weisbruch

Recently, the ETP industry learned that BlackRock finally received exemptive relief to launch actively managed ETFs, namely the iShares Active Fixed Income Fund and the iShares Active Equity Fund. Perhaps this move by the largest ETF issuer in terms of assets will alter the general thought process among many industry participants including institutions, financial advisors, and RIAs that "ETFs are passive beta products." In addition to BlackRock's entrance into this segment of the ETF market, State Street is now in the active ETF space, and Russell Investments will soon be launching a suite of ETFs that are designed to deliver alpha for investors, as opposed to being pure "beta" plays like many of the ETF offerings currently available to investors. At Street One, we have noted an evolution in thought from 2008 to the present day where slowly but surely, the investment community is embracing the fact

Scott Freeze is the President of Street One Financial, a Pennsylvania-based firm that specializes in ETF/ETP, equities, and options trade execution. Scott has been involved in ETFs from both a trading/execution and a product strategy standpoint since the beginning of the decade. He views Street One's primary role as enabling its clients to construct better portfolios and recapture more basis points that would otherwise be lost in the marketplace, through better trade execution.

Seeking Alpha's Jonathan Liss recently spoke with Mr. Freeze to find out how he planned to position clients in Q2 in light of his understanding of how a range of macro-economic trends were likely to unfold in the coming quarter and beyond.

Seeking Alpha (SA): Welcome back Scott. This has been an extremely eventful quarter with many geopolitical events driving global markets. Before we get down to specifics, how would you characterize your

By Nathan Slaughter

A couple of weeks ago, I spelled out the case for rising uranium prices. Then, tragedy struck.

As you know, Northeast Japan suffered a devastating 9.0 magnitude earthquake on March 11, which unleashed a monster 30-foot tsunami that wiped out everything in its path.

At this point, my most immediate concern is with the survivors, not my own portfolio (I plan to contribute to humanitarian relief efforts and urge readers to do the same, if possible). That being said, ignoring the financial effect of this tragedy benefits nobody.

Here's what's going on...
Japan is one of the world's largest proponents of nuclear power, with a fleet of 55 reactors that generate about one-third of the country's electricity. Most of those reactors stayed out of harm's way, but a handful were directly in the path of the storm -- most notably Tokyo Electric's (TKECF.PK)

by Paul Weisbruch

In 2007, the ETF provider known as First Trust Portfolios launched their “AlphaDex” methodology, which in hindsight, proved to be well ahead of its time. Prior to 3 years ago, the idea of an ETF generating excess return, or even the concept of an “actively managed” ETF were largely whimsical notions, and foreign to most to say the least. ETFs were, and to this day are still seen by many to be vehicles that grant access to “beta,” or benchmark index returns at low cost.

That said, the majority of ETFs in the marketplace today do exactly just that, mimicking existing indexes and charging a small management fee to deliver index based investment returns. First Trust, however, developed a concept known as the “AlphaDex”, which presented investors with the possibility of owning an ETF vehicle that delivered enhanced returns to a specific index benchmark, thus unlocking

Scott Freeze is the President of Street One Financial, a Pennsylvanie-based firm that specializes in ETF/ETP, equities, and options trade execution. Scott has been involved in ETFs from both a trading/execution and a product strategy standpoint since the beginning of the decade. He views Street One's primary role as enabling its clients to construct better portfolios and recapture ...More basis points that would otherwise be lost in the marketplace, through better trade execution.

Seeking Alpha's Jonathan Liss recently spoke with Mr. Freeze to find out how he planned to position clients in 2011 in light of his understanding of how a range of macro-economic trends were likely to unfold in the coming year.

Jonathan Liss (JL): Despite predictions of a dip in equities amid slow global growth in 2010, stocks were clearly the better choice than bonds in 2010, especially in Q4 where bonds sold off

By Paul Weisbruch

On March 24 of this year, we published an article to Minyanville titled “ETFs With Little Volume But Big Returns which highlighted ETFs and ETNs that have generated eye-opening performance over time but likely suffer from lack of investor interest due to relatively low average daily trading volumes and embedded misconceptions amongst the investing public (on both retail and institutional levels). Since March, has the world of ETF investors (from individuals, institutional funds such as pensions, endowments, foundations, Registered Investment Advisors, Mutual Funds, Hedge Funds, etc.) scrapped the misconceptions that are present in the mindsets of many in regards to effectively trading large volumes in relatively thinly traded products?

We would argue on the whole, the answer is “No”, but strides are being made in the correct direction thanks to continual education about the ETF/ETN product structures from the ETF issuers and effective measures of

"...since early 2007 the firm has seen a 44 percent increase in the number of long-term investors who hold an ETF. Advisor usage of ETFs in client portfolios is on the rise as well. Nearly 80 percent of RIAs on the TD Ameritrade Platform actively use ETFs today, up 5 percent from just a year ago."

Unfortunately, the rapid rise in usage of these products hasn't necessarily been accompanied by a similar increase in knowledge of how to trade ETFs. The common view that 'ETFs are like mutual funds

This article originally appeared in the September 2010 edition of NAAIM’s 'The Active Manager'

By Scott Freeze

With the explosion and popularity of ETFs over the last few years, many advisors have moved a large portion, if not most, of their assets from single equities and mutual funds to ETFs. These orders started as SPY, DIA, QQQQ and the buy/sell orders were given to the Custodians’ trading desk for execution, with fills routed back to the advisor, with minimal market impact. There were no issues with order size, or execution price since the ETFs were so heavily traded.

How has that changed today? The ETF landscape is full of hundreds of similar products with differing expense ratios, weighting of underlying securities, and components of the basket. The proactive advisor knows that true liquidity is in the underlying basket and not ADV (Average Daily Volume) and screens based on what ETF

Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial , a firm that specializes in educating, evaluating, and trading ETFs, equities, and options. He recently took time out of his busy schedule to share his thoughts on the liquidity of ETFs, fallout from the “Flash Crash,” and more.

ETF Database: There seems to be a notion that an ETF needs to trade a certain amount of shares on a daily basis–usually 100,000 shares average daily volume–and/or cross a minimum asset threshold–typically $100 million, before it is “liquid” and “investable.” Are these metrics a valid way to screen out potential ETF investments?

Paul Weisbruch: These metrics aren’t necessarily valid indicators of liquidity, but they certainly are prevalent among the investment advisor community and especially in the institutional world. And that presents a major hurdle for ETF issuers trying to raise assets. That is especially

On July 11th, with GLD rebounding somewhat and trading around the $119 level, a note was published by Street One Technical Analysis LLC to our Seeking Alpha instablog speaking of bearish institutional options activity that we observed in XAU (Gold and Silver Miners Index) that seemed to be a play on the burgeoning technical weakness in the Gold commodity ETFs (GLD, SGOL, IAU, DGL, etc.). In the

The euro has rallied against the U.S. dollar in recent weeks; note that UUP (PowerShares DB U.S. Dollar Index Bullish) is down nearly 5% from its June 7^th high of $25.84. FXE (Currency Shares Euro) meanwhile is up about 5% from its June 8^th low of $118.79. Both products made significant moves Thursday on better than average trading volume, with FXE closing above its 50 day moving average and UUP breaching its 50 day moving average and sharply gapping down.

Institutional options flows seem to be positioning for further longer term downside in the U.S. dollar, as we noted buyers of December 23 puts in significant size during Thursday’s session. A potential way to capitalize on additional weakness in the dollar through an ETF would be with UDN (PowerShares DB U.S. Dollar Index Bearish).

Back on June 9th we updated clients and also published on Seeking Alpha, pointing out a possible rally in Crude Oil, and the ETF and ETN products that track the commodity such as United States Oil Fund (USO), PowerShares DB Oil (DBO), (OIL) iPath (S&P GSCI Crude Oil Total Return ETN), United States Brent Oil (BNO) and the United States 12 month Oil Fund (USL). Since the June 9th note, USO has rallied over 8% to $35.66, including a healthy 3 plus percent rally last Friday, and has traded as high as $36.04 in recent sessions, while USL has rallied over 5%.

In our original June 9th note, we cited the recent BP mishaps and how the government will be more closely regulating oil rigs and their drilling operations, which in effect may reduce oil supply and increase oil’s price. Secondly, we spoke about the effect that

By Paul Weisbruch

With all the media attention focused on brokers offering "commission free" trading in specific ETFs, we decided to take a look at what commission free means to institutional and individual investors.

Charles Schwab (SCHW) ETFs started this trend in late 2009 when they ventured into the ETF issuer business themselves, offering commission free trades to Schwab brokerage customers who traded these products online. These customers can be individual investors or Registered Investment Advisors (RIAs) that use Schwab as their custodian and trade through the Schwab platform. Currently, 8 Schwab ETFs can be bought or sold, commission free, on the Schwab online trading platform and the symbols are as follows: SCHF, SCHX, SCHB, SCHA, SCHE, SCHG, SCHV and SCHC.

Fidelity, which is also in the online brokerage business and caters to individual investors as well as RIAs with Fidelity as their custodian, followed suit in February of this

by Paul Weisbruch

On Wednesday June 9th, we updated our clients about a potential long oil (the commodity, not oil-related equities trade, and afterwards captured the gist of the idea here on our Seeking Alpha instablog (see Wednesday, June 9th comments)

At Street One Financial, we regularly speak with the ETF issuers in order to understand their products thoroughly, and how they should ideally be positioned within portfolios. This also helps our ability to efficiently price and trade these ETFs, as "looking under the hood" is essential to fully comprehending every ETF in the growing product universe.

We spoke with Emerging Global Shares about one of their ETFs that had caught our eye, EEO (Emerging Global Shares Dow Jones Emerging Markets Energy Titans). We have wrapped together a few points below that should be made about this fund as a potential long play on oil-related equities, from an

By Paul Weisbruch

Recently we published a piece on "ETF Mutual Funds", which by design are structured as 1940 Act mutual funds, that own individual ETFs as opposed to equities or fixed income securities as their underlying holdings. This article can be accessed on both Minyanville and Morningstar ETFs.

These ETF Mutual Funds are not simply vanilla index mutual funds like that of say Vanguard, like their names may imply, but instead are strategic portfolios designed to provide risk adjusted alpha to the end investor, and are in essence using ETFs strategically and tactically in order to outperform stated benchmarks. Another vehicle that has emerged in recent years are "ETFs of ETFs." What exactly is an ETF of ETFs? Simply put, an investor can access the strategies of many different ETFs (equity, fixed income, long, short, commodity, currency, etc.), professionally managed within the wrapper of one ETF. So

by Paul Weisbruch

The Merrill Lynch HOLDRs lineup of funds is well known in the ETF industry and has been around since 2000. They carry name recognition and many investors and portfolio managers, especially those in the institutional and hedge fund space. SMH and OIH, and at one time HHH, were familiar monikers on sell side trading desks as well as those of buy side managers. The HOLDRs suite of products still retains a respectable amount of assets as well, over $5 billion in total AUM, and stands as the number 11 ETF issuer overall in terms of assets under management according to the last "S1F ETF Monthly" published in early May. Here are the issues with the products as we see them, however.

When the HOLDRs were conceived, ETFs were still in their infancy, with only a handful of broad based index products available to the investor like

By Paul Weisbruch

Back on January 31 of this year, we published a piece on using market cap oriented S&P index ETFs alongside revenue weighted as well as equal weighted ETFs that are based on the same S&P indexes. The original article appears here.

In a nutshell, this article described opportunities to capture performance in pairs trades, or "spread trades," where the portfolio manager takes a long position in one ETF, and then shorts an equal dollar amount in a "like" ETF.

In the case of the previous article, indexes such as the S&P 500 are ideal candidates for pairs trade possibilities since there are a handful of products that track the index from different ETF issuers, based on different weighting methodologies. The key to these pairs trades is the predictability and transparency that the investor has in that the underlying index constituents in IVV, SPY, RSP, and RWL