BlackRock iShares, one of the key players in the ETF industry, which filed to launch actively-managed ETFs, has finally received exemptive relief from the SEC. According to the exemption granted, the application was initially filed in Nov 2008 and was subsequently amended in May 2009, June 2010 and Nov 2010.

In the latest amendment, iShares specified that it is planning for the launch of two actively-managed ETFs for a start – the iShares Active Fixed Income Fund and the iShares Active Equity Fund. Both funds will be advised by BlackRock Fund Advisors:

1. iShares Active Fixed Income Fund – The objective of this fund will be to provide a combination of income and capital growth and it will use quantitative models to allocate assets amongst various sectors. Interestingly, the filing indicates that this fund will get its exposure by investing 80% of its assets in other ETFs advised by BFA

Note: The following is Part 1 of a 4 part series entitled Research of ETFs. It walks readers through the inadequacies of existing research methods, argues the benefits of a fundamentally-driven, forward-looking analysis, and illustrates how investors and their financial advisors can put these tools to work in the real world. This unique approach is the basis behind the ETF Analyzer app on Seeking Alpha. The entire Research of ETFs guide can be downloaded here (pdf).

Thanks to oil’s recent surge, a number of tangentially connected industries have benefited from the sharp move higher in crude prices. One such industry is the solar power sector where higher oil prices make solar panels more competitive with traditional fuel sources. Furthermore, during times of great turmoil, many are also reminded of the importance of weaning ourselves off foreign oil and diversifying our energy sources into alternatives, adding to the investment interest in the sector. With this backdrop, one of the most important firms in the industry, First Solar (FSLR) reported earnings last night after the bell, putting the in-focus industry further into the spotlight. First Solar, a Tempe, Arizona-based company, is the world’s largest manufacturer of thin film photovoltaic modules with operations stretching from its home in the U.S. to Europe and the Far East as well. The company has been ramping up production as of late and

Last year was a very interesting one for the ETF industry, a stretch filled with both ups and downs. The industry suffered from numerous attacks that concerned investors about the possibility of an ETF collapsing and the role that these securities played in the Flash Crash. Yet many dismissed these claims as fear-mongering, and shrewd investors continued to pile into ETFs as a way to reduce expenses, achieve more diversified exposure, and enhance the overall tax efficiency of their portfolios. In fact, ETF assets recently surged to the $1 trillion level, while the number of fund choices continued to expand as well, hitting the 1,100 mark.

The past year was no doubt one of the most important in the industry’s short history, as the products continued to gain market share in new markets around the world. With 2011 well underway, the new year figures to be full of exciting developments

Despite facing new and fresh stress tests, large-cap financial institutions appear to be positioned for earnings-per-share growth in 2011, making the Financial Select Sector SPDR (XLF) and the iShares Dow Jones US Regional Banks Index Fund (IAT) attractive.

According to an article in Barron’s magazine, Credit Suisse (CS) expects large-cap financial institutions like Bank of America (BAC), JP Morgan Chase (JPM), Wells Fargo (WFC), PNC Financial Services (PNC), US Bancorp (USB) and Citigroup (C) to witness earnings-per-share growth of 25 percent. The true driver behind this profitability is expected to be improving credit costs and more active capital management.

Furthermore, the article states that the large-cap financial institutions face headwinds due to the newly implemented Basel proposals, which included stress tests that are expected to determine which financial institutions have healthy enough balance sheets to increase dividends and buy back shares. Healthy organic capital generation should be able to absorb

China has long been considered one of the world’s most important economies, thanks to its massive size, tremendous potential, and impressive growth rates over the last two decades. With a population that is rapidly urbanizing, many predict the Chinese economy will be the largest in the world within just a decade, potentially knocking the U.S. from the number one spot that it has held for so long.

While China’s potential policy shifts and economic potential dominated the headlines for much of last year, the end of 2010 focused on a different corner of the globe as the eurozone struggled with looming debt crises that struck several nations. Countries like Greece and Ireland have already received bailouts, and others such as Spain and Portugal are on the brink of needing international intervention to stay afloat. While many have looked to the EU or the IMF to help these indebted nations, few

Germany’s sentiments are all over the map these days, making it a challenge to figure out whether its ETF is worthy of a look right now.

Germany’s economy is known as the bellwether for economic growth and health in Europe, so how it’s doing really matters.

As the largest economy and one of the healthiest exporters in Europe, sentiment is closely monitored but the signals are decidedly mixed. Let’s look at the good and not great:

• Emese Bartha for The Wall Street Journal reports that consumers sentiment declined in January from December. However, the indicator’s level suggests that consumers still believe Germany will stay on track this year.
• Jack Ewing for The New York Times reports that the December business climate index rose more than expected. The gain came from optimism among retailers.
• German investor confidence improved for a second month in December, says Christian Vits at Bloomberg.
• Bernard Radowitz

Canada’s ETFs have been no strangers to the lackluster growth that has plagued developed markets of late, but that all could end soon.

Generally, the outlook on Canada is a positive one:

• Canada led all G7 nations in gross domestic product (GDP) growth in the initial stages of recovery from the global financial crisis. That’s largely thanks to stimulus and rising commodity prices.
• Juliane Beltrame at CB Online reports that growth in the near future is fragile; however, the country does have a positive outlook. The IMF sited several “key risks” that could restrain the recovery and growth in employment, including an overheated housing market, high household debt and the weak recovery in the United States.
• Unemployment, though still high, has declined over the last year. After topping out at 8.7%, it’s back down to 7.6%.
• Alexandre Deslongchamps at Bloomberg

Accretive Asset Management LLC announced last week the launch of a family of high-yield bond indexes that could soon be the basis for a new suite of exchange-traded funds. The BulletShares USD High Yield Corporate Bond Indices are maturity-targeted benchmarks that measure the performance of U.S. dollar denominated non-investment grade bonds. Each index includes junk bonds scheduled to mature in a certain year, meaning that securities seeking to replicate the performance will have a cash flow profile similar to that of an individual held-to-maturity bond.

The new suite consists of 10 indexes, beginning with the BulletShares USD High Yield Corporate Bond 2012 Index and running through a 2021 version. “We are excited to bring the BulletShares methodology to the high yield sector of the corporate bond market,” said Darrin DeCosta, head of product development for Accretive Asset Management. “The remarkable success of investment products based on our existing investment grade

Equity markets were range-bound last week, struggling to make significant moves in either direction. Gold took a big tumble early in the week, dropping well below the $1,400 mark as concerns over the health of the global economy subsided. Wall Street also rallied in the middle of the week following a round of positive jobs and non-manufacturing data. Treasuries were flat for the most part as well, with the iShares Barclays 20+ Year Treasury Bond (TLT) finishing the week lower by just 1.8%. Yet, domestic markets took a small hit on Friday following the disappointing unemployment report, which showed a decline in the national unemployment rate – as a result of people giving up on the search for work – as fewer jobs were added than expected.

This week, investors will be kept busy with the start of earnings season after the market closes on Monday, and a round of

There was a peculiar exchange on CNBC the other day between Mark Haines and a guest touting Abbott Labs (ABT) as a value stock. Haines asked why anyone would want to buy such a stinker of a stock, noting that it has lagged badly since the March 2009 low. It is essentially flat since then, versus a 43% lift for the Healthcare Sector SPDR (XLV) and an 88% lift for the S&P 500.

The guest was making a value case for the name, simply concluded that he thinks the market will recognize the value in the name at some point, and that they will be rewarded for the pick. Later in the day, another analyst said he liked Cisco (CSCO) for the valuation. Cisco seemed to be capturing the effect off of the March low, actually outperforming the Tech Sector SPDR (XLK) until a few months ago, when it started

Making tactical asset allocation decisions based on major asset price trends is an effective way to achieve reasonable returns while reducing risk. Recently, risk assets have been on a tear. It began with the year-end rally, but now most risk assets are showing fatigue. Last week, except for U.S. equities, most risk assets had negative returns. Markets are trading in a sideways fashion.

No one has a crystal ball to predict future movement. What one can do, however, is manage portfolios properly. As we enter the new year with elevated markets in most risk assets, it is a good time to review your portfolios.

It is especially important to look at your portfolio allocation mix and adjust the portfolio risk. An overly aggressive portfolio, if not re-balanced back to a risk level investors are comfortable with, can suffer a big loss in a market downturn. With a risk one cannot

The relative performance among sector ETFs stayed roughly this week, with the top sectors in 2010 — energy (XLE), consumer discretionary (XLY) and materials (XLB) — retaining their top spots, although the upward momentum we saw in energy and materials did not continue into the new year. One can gain critical insights into how to build portfolios at the sector level by examining the following table:

Assets Class	Symbols	01/05 Trend Score	12/29 Trend Score	Direction
Energy	XLE	14.72%	17.53%	v
Consumer Discretionary	XLY	14.32%	14.23%	^
Materials	XLB	14.24%	16.82%	v
Industrials	XLI	14.01%	14.43%	v
Telecom	IYZ	13.08%	11.69%	^
Technology	XLK	10.35%	9.81%	^
Financial	XLF	9.88%	9.56%	^
Consumer Staples	XLP	6.52%	7.57%	v
Healthcare	XLV	5.18%	4.63%	^
Utilities	XLU	3.65%	3.91%	v

Marking a shift in sentiment, the energy sector (XLE) saw its trend score lowered this week. Oil prices fell in response to

A couple of months ago, I outlined a strategy for investing in country ETFs. It ranks stock markets of developed markets and a few major emerging markets by valuation and momentum.

Valuation is often one of the largest factors determining long term returns, while momentum has been more predictive of the short term. By combining both, we are trying to pick countries that have both long term and short term tailwinds.

We used median earnings yield and p/s to compare valuations.

Momentum was compared by calculating an exponentially weighted rate-of-change calculation on ETFs representing each country. While this is my preferred method, comparisons using the previous 12 or 6 month’s returns are very similar.

Over the last month this strategy has performed well with the top 5 countries returning 3.08% and the bottom 5 countries returning only 1.41%.

Methodology: First, the

International REITs (RWX) and U.S. REITs (IYR, ICF) continue to retain their top spots in performance trend ranking. They are followed by several U.S. stock dividend ETFs. For more details, please refer to the table below and performance page here.

Outlook : The majority of global equity markets did much better in 2010 than investors might have thought given the surfeit of things to worry about. The Morgan Stanley Capital International (MSCI), “Word, All” index was up approximately 10% last year. (Click the "financial cartoon".)

Most major global stock markets were up in 2010 with the Asian markets leading the advance. In US dollar terms, the eurozone, with the exception of Germany and Austria, was one of the global regions where there was a preponderance of countries making up the region experiencing losses.

Sovereign Debt Crises Loom: The eurozone is again coming under increased pressure as the sovereign debt crises resurfaced after taking a holiday in December. Investors are targeting Portugal as the next Ireland. Portugal is set to issue a major round of financing next week which will test investors’ appetite for its paper.

The recent spate of constructive

Back on December 11 I wrote that, to my surprise, the financial sector seemed to be staging a real comeback. At that time I pointed out that the ETF Trend Performance Report indicated that a group of financial ETFs had shown the biggest improvement in trend scores for the week. Feeling some skepticism about the financials I was not surprised to see them pull back the very next week.

After running tonight's Alert HQ process, the Thursday ETF Scorecard shows that the financials have not only rallied since then, they have established strong bullish trends. Six of the top 10 are financial ETFs and there is another one at position 19.

The following ETFs have registered the strongest possible trend score (6 out of 6) indicating solid bullish trends in progress:

By Lara Crigger

Newcomer Teucrium Trading made quite a splash on the commodity ETF scene last year with the Teucrium Corn Fund (NYSEArca: CORN), the market’s first pure-play corn futures ETF. The fund, which holds a basket of future contracts across the curve, has already attracted more than $42 million in assets just six months after its launch. In fact, CORN has been so successful that the firm has already filed for five additional funds, including ETFs in natural gas, crude, sugar, soybeans and wheat.

When it comes to commodities, Teucrium co-founder and president Sal Gilbertie is no novice. Gilbertie has worked in the space since 1982; most recently, he was Newedge USA’s head of Renewable Fuels/Energy Derivatives OTC execution desk, and an active market maker and derivatives trader. Prior to that, he was principal and co-founder of Cambial Asset Management and Cambial Financing Dynamics, a boutique investment bank.

HAI