Note from dshort: Chris Kimble's technical look at the Australian Dollar posted earlier today (here) reminded me that several months have passed since my last look at the benchmark All Ordinaries Index. The All Ords is currently 13.8% below its interim high, set on April 11th of last year, and 36.3% below its all-time high in 2007. Here is an update of my All Ords S&P 500 overlay.

What would the S&P 500 look like without the Tech Bubble? Perhaps something resembling Australia's All Ordinaries Index. I've included the S&P 500 in the background to support the idea.

I'm not a technical analyst, but the twin peaks in the S&P 500 over the last dozen years looks like a double top. On a smaller scale the shape of the All

The mineral rich land down under has greatly benefited economically from the massive demand for metals as the global economy experienced an unprecedented building boom over the last couple of decades.

This global economic boom caused a huge rise in mineral exports from Australia as demand ramped up to a fever pitch over the last 10 years.

Australian metal ore and mineral quarterly exports ($A millions) since 1969:

Along with this rise in metals exports, which has been a primary driver of the Australian economy, Australia has seen a spectacular rise in real estate and housing prices of its own. Concerns over these skyrocketing housing prices are not new and yet the bubble has not burst to any great extent--so far.

Total employment in metal ore mining (thousands of people) since 1984:

The amount of risk posed by the inflated housing market has been a matter of debate for a

It came up while grilling steaks and enjoying a gin & tonic after watching the riveting finish to the Master’s golf tournament. Australia’s Adam Scott outdueled Angel Cabrera of Argentina in pouring rain to capture the coveted green jacket.

Taking this international competition to a different arena, the topic came up; where would you rather invest right now, Australia or Argentina?

On the face of it, it seems a ridiculous question to even consider. After all, Australia has had 16 years of continuous growth, is at the sweet spot of Asian trade and a financially strong free market economy. Argentina is, well, another kettle of fish with high inflation, import and capital restrictions and high levels of government interference in the economy.

But let’s look at it this way, which country offers investors lower downside risk and higher upside potential?

In the case of Australia (EWA), expectations to continue their

Back in February, I warned that all was not well Down Under, noting that any further softness in Australia's growth would lead me to downgrade my near-term view of the country's stocks. Since then, a number of leading indicators have suggested that the Australian economy is slowing. So, as I write in my latest Investment Directions monthly market outlook, I've downgraded my near-term view of Australia to underweight from neutral.

While Australia posted a strong fourth-quarter 2012 gross domestic product report, more recent local business confidence surveys are pointing to a slowdown in domestic growth. At the same time, the economy faces future growth headwinds, including a strong Australian dollar and easing commodity prices. Australia's sluggish growth outlook is problematic given that local equities are expensive compared to those of other developed markets. While most market watchers have been focused on the United States rally lately, Australia

This posting features a comprehensive review of the high yield dividend ETF sector. This view features those dividend related ETFs that have a much more aggressive focus on dividends and yield versus more established sectors. Sometimes the focus on dividends to exclusion of other considerations can lead to trouble. Some of the higher yielding ETFs are sourced from more volatile areas of the world and may focus on previously more troubled sectors like financials where reliability of the dividend stream had been questioned.

In the U.S. and Europe for example, support for many financial institutions from central banks has allowed these institutions to survive the financial crisis thus far.

That said, there is a rapidly expanding list of ETFs from which to choose.

This is occasioned in part by equity market volatility leading investors to perceive safer havens especially money markets and high rated bonds. Low interest rates have combined

For a little more than a year, I’ve been advocating a long-term overweight to Australian equities as part of my preference for smaller, developed “CASSH” (Canada, Australia, Switzerland, Singapore and Hong Kong) countries that exited the financial crisis in far better shape than Europe, Japan or even the United States.

Since the start of 2012, this view has generally worked well. Australian equities – as measured by the S&P/ASX 200 index – are up more than 16% from 12 months ago.

Now, however, all is not so well down under. While I’m maintaining my neutral near-term view of Australia for now, here’s why I’m closely watching the market for a possible downgrade.

1. Australia is not as cheap as it was six months ago. Australian equities are trading for nearly 2x book value. While this represents a discount to US stocks, Australia is now

The ex-U.S. Dividend ETFs are the Big Winners for 2012

Dividend ETFs have enjoyed a spate of popularity these last few years as investors seek the cushion of yield and some diversity in their portfolios. There are now about 50 dividend ETFs available in many, many variations, based on equity indexes that may include geographic region, country specific, market cap weighted, fundamentally weighted, yield weighted, and other various yield and/or income methodologies. Last year, as much of the world fretted over regional fiscal woes, Europe, the emerging markets, and other non-U.S. stock funds came clawing back to life in a big way. Let's examine the top 2012 dividend ETFs as they reveal some regional market gains - helped along of course with dividends. Note that WisdomTree has seven of the top 10 funds. WisdomTree has been a leader in the dividend ETF niche, especially with the

Income seekers have delved into the markets in search of attractive payouts during this low-yield environment. Some have found enticing yields in country-specific exchange traded funds; however, potential investors should not let yields blind them and consider the underlying risks associated with the country in question.

Roger Nusbaum of The Street points to a recent Wall Street Journal column that focused on single-country ETFs with "safe" dividend yields greater than 4%.

Specifically, countries like Australia, New Zealand, Norway and Poland:

• iShares MSCI Australia Index Fund ETF (EWA): yield 5.24%
• WisdomTree Australia Dividend Fund ETF (AUSE): yield 6.25%
• iShares MSCI New Zealand Investable Market Index Fund ETF (ENZL): yield
• Global X FTSE Norway 30 ETF (NORW): yield 6.34%
• iShares MSCI Norway Cppd Investable Mkt (ENOR): yield 4.72%
• iShares MSCI Poland Investable Market Index Fund ETF (EPOL): yield 5.99%
• Market Vectors Poland ETF (PLND):

With the S&P 500 up around 11% year to date, behemoth dividend ETFs are turning in forgettable performance. Well known and widely owned ETFs like DVY, VIG and SDY have only gained between 3 - 5%. There is even a dividend ETF that has somehow managed a negative return year to date, FDL. The best performing dividend ETF in 2012 isn't a giant, in fact-- it qualifies as a diamond in the rough based on its AUM. Yet this ETF delivers a 30 Day SEC Yield of 5.8%, has gained 18% in 2012 and invests in three countries that most investors actually feel pretty good about-- Australia, Canada and Brazil. The ETF is the Guggenheim ABC High Dividend ETF (ABCS) and it has earned a closer look.

Performance
ABCS has not just led all global and domestic dividend ETFs in 2012 performance, it has crushed the field. Consider the performance

Fitch left the ratings and outlooks of Canadian banks unchanged earlier today, Tuesday, while placing Australia's four largest banks on negative credit watch. The main reason for warning on Australia but not Canada is that Australian banks are more reliant on foreign wholesale funding.

Canadian banks also have a lower loan/deposit ratio and a relatively higher deposits to funding ratio than Australian banks. On the other hand, Australian banks have higher interest margins and return on assets than Canadian banks.

Banking sectors in both countries are highly concentrated. The top four banks in Australia account for about three quarters of the banking assets. The top six Canadian banks account for upwards of 90% of the Canadian banking assets. According to Fitch, the concentration and high profits of the banking sector is favorable to each as it provides a cushion against losses and need to pursue higher risk activity/lending.

Both Canada

Income investors who purchase regionally-themed or industry-themed equity exchange-traded funds for dividend yield may be embracing risks they do not expect. The logic behind adding dividend-paying stocks from other countries to diversify an income portfolio is sound, but some fund holdings are hard to swallow.

The Allure of Using Themed ETFs for Income

Income investors who purchase dividend paying stocks hope to find steady income. A diversified mix of dividend-paying stocks, well-rated corporate bonds, and small allocations to alternative investments is a typical strategy to achieve this goal.

Most investors tend to over-invest in their domestic markets and can reduce risk by buying foreign stocks. Diversification across markets is a "free lunch" which, if done prudently, reduces uncertainty without lowering returns.

On the surface, themed ETFs appear to meet the needs of investors seeking dividend paying funds. These ETFs have familiar, easy to understand strategies like Belgian stocks or solar

Given the unbelieveably low interest rates available on the fixed income markets today, many investors are taking a renewed interest in dividend investing. However, this often means single stock investing, which can be both time consuming and risky.

Below is a list of 10 ETFs that offer great yield (>6%), reasonable expense ratio (<0.75%), cash flow yield greater than dividend yield, and no return of capital factored into the yield rate. Consider these unusual funds as sources of dividend income and diversification for your portfolio

NLR - Market Vectors Uranium+Nuclear Energy ETF

Tops on the high yield ETF screen is NLR, a narrowly focused ETF seeking to replicate the performance of the nuclear value chain. Note that the almost 13% yield is inflated by an ever shrinking denominator (price) as falliing electricity prices and headline risk take a toll.

PBP - PowerShares S&P 500 BuyWrite

This ETF follows a classic

Given the plethora of market uncertainties, over the past few months investors have started placing an increasing emphasis on dividend yield. In particular, multi-national companies operating in regions or sectors that would enable them to grow dividends over the next few years have gained favor. These so-called 'dividend aristocrats' have recorded strong relative performance compared with the benchmark indices, as illustrated by the relative price chart below of the S&P 500 High Yield Dividend Aristocrats Index versus the S&P 500 Index.

Click to enlarge:

Source: StockCharts.com

This trend raises the raising the question: Are we seeing a dividend bubble?

I concur with the answer provided from across the pond by David Fuller, co-author of FullerMoney, as follows:

The short answer is not yet, but all good trends eventually develop some bubbly characteristics, of a greater or lesser degree. A number of high-yielding, multinational ‘Autonomies’ have shown impressive relative strength

This posting features a comprehensive review of the established dividend ETF sector. In this view we feature those dividend related ETFs that have a much more aggressive focus on dividends and yield versus more established sectors. Sometimes the focus on dividends to exclusion of other considerations can lead to trouble. Some of the higher yielding ETFs that follow are sourced from more volatile areas of the world and may focus on troubled sectors like financials where reliability of the dividend stream may be questioned.

That said, there is a rapidly expanding list of ETFs from which to choose. This is occasioned in part by equity market volatility leading investors to perceived safer havens. Of perhaps a greater impact is the low levels of yields available from traditional sources like bonds. Low interest rates have combined with current aging demographics where demand for income is greatest. To simplify matters for investors

WisdomTree, the issuer behind a number of popular international debt ETFs, followed through today on the previously announced conversion of its Dreyfus New Zealand Dollar Fund (previously traded under the ticker BNZ) to the Australian & New Zealand Debt Fund (AUNZ). The revised fund will continue to be actively managed, with the investment objective changing to focus on bonds denominated in the local currencies of Australia and New Zealand. While there are now a number of international bond ETFs, AUNZ is yet another ETF first; the fund becomes the first to focus exclusively on the two developed Pacific economies.

Aussie Dollar On A Roll

Australia and New Zealand also represent two developed economies that have largely managed to avoid the deterioration of fiscal health that has plagued the U.S. and Western Europe. Both countries are rich in natural resources, and that commodity wealth is a major reason for the relatively

The Daily Reckoning had a post up about the Permanent Portfolio (the Harry Browne concept, not the U.S. mutual fund) from an Australian perspective. As a quick reminder the Permanent Portfolio allocates 25% each to cash, equities, long bonds and gold.

The idea of building the Portfolio from the perspective of another country is pretty interesting and is possible with a couple of countries using ETFs including Australia.

The cash portion is simple with the Rydex Currency Shares Australian Dollar Trust (FXA). It captures the movements of the currency and has a yield that is generally inline with rates set by the Reserve Bank of Australia.

With the equity allocation they usually have a broad large cap fund in mind. There are at least a couple of those to choose from with the iShares MSCI Australia Index Fund (EWA) and the WisdomTree Australia Dividend Fund (AUSE). There is no

The massacre in Italian and Spanish bonds continues apace – and CDS on euro area sovereigns continue to blow out to new highs. Not surprisingly, stock markets continue their recent crash-like move lower. It appears the break of the head and shoulders neckline in the S&P was akin to opening a trap door – at least at the time of writing, when the SPX was down over 40 points.

As we said yesterday – "the market is oversold, but it could become more so." "More so" it is.

Also, as we noted recently, there is still no joy for investors in gold stocks, in spite of gold hitting new highs almost daily (a sell-off related to margin calls in other markets could soon be in the offing, as investors cash in winners to make up for losses elsewhere). The persistent weakness in the sector relative to gold in fact

New product introductions kept flowing in June, though behind the pace of recent months, with the listing of 31 new ETFs and three new ETNs. This is the lowest monthly figure since February. There were 38 launches in March, 43 in April, and 39 in May. No ETPs were taken off the market, so total listings now stand at 1,288 (1,120 ETFs and 168 ETNs).

The number of actively-managed ETFs jumped to 40 after staying at 34 for a number of months. The increase was the result of two Guggenheim funds being converted from passive to active on June 1 and four new ETFS from AdvisorShares.

Trading activity edged upward in June, with total ETP dollar volume increasing 7.4% to $1.67 trillion. The billion dollar club, those ETFs averaging more than $1 billion in daily trading activity, shrank from11 to nine. Those nine still accounted for more than