The revolving door to the ever-changing exchange-traded fund marketplace never stops turning. Introductions of emerging market ETFs seem at times to be offset by announcements of retiring ETFs that barely claimed their shares of the space.

Asset manager Emerging Global Advisors launched two funds in August of interest to emerging market investors. Its EGShares Emerging Markets Domestic Demand ETF (EMDD) focuses on emerging markets that have significant consumer demand. It allocates most heavily amongst countries to Mexico, with almost 25% of the portfolio, and the largest sector weighting is to telecommunications, at nearly 30%. Since its launch, EMDD has traded sporadically (not daily), averaging only 500 shares per day. The share price is nearly flat, down about 0.10% from its initial public offering value.

The other fund the firm launched in August is the EGShares Beyond BRICs ETF (BBRC), which tracks the performance of an emerging markets index that excludes

DirexionShares announced this month it will close nine of its 3x leveraged ETFs. The affected funds target domestic sectors as well as certain emerging markets. Their shares will be de-listed from NYSE Arca as of the close on September 5, 2012, with the liquidation process to be completed a week later. Shareholders should dispose of their holdings prior to delisting because Direxion stated each fund’s liquidation value will reflect the costs of closing the fund.

The disappearing ETFs are:

• Direxion Daily Agribusiness Bull 3X Shares (COWL)
• Direxion Daily Agribusiness Bear 3X Shares (COWS)
• Direxion Daily Basic Materials Bear 3X Shares (MATS)
• Direxion Daily BRIC Bull 3X Shares (BRIL)
• Direxion Daily BRIC Bear 3X Shares (BRIS)
• Direxion Daily Healthcare Bear 3X Shares (SICK)
• Direxion Daily India Bear 3X Shares (INDZ)
• Direxion Daily Latin America Bear 3X Shares (LHB)
• Direxion Daily Retail Bear 3X Shares (RETS)

Direxion’s August 3 closure announcement (pdf)

By Steven Orlowski

Just as new emerging market ETFs can be created, so they can be eliminated. One very important trading and investing consideration is liquidity. Can you find a seller for your shares when you need to, or are you stuck with shares you can't sell?

Before buying emerging market ETFs you must consider the average daily trading volume, or how many shares have been traded on an average day. An ETF that only trades a few hundred shares per day is usually a poor choice. Securities with low average volume and/or trade infrequently (not every day) also usually trade with a wider spread - the difference between the buyer's price (the bid) and the seller's price (the offer).

A wide spread means you start your share ownership at a deficit. A very liquid security may trade with a $.01 spread. For example, I pay a seller $10.00 per

As we hop from Greek elections to the G20 summit in Los Cabos, Mexico, only the characters change, not the problems. As a quick side note, the result of the French elections, with Hollande solidifying his power, will prove to be a bigger obstacle in the future.

We're now focused on a group of twenty individuals trying to find solutions while sipping margaritas and delivering extremely vague headlines. If one follows these events, the summary (pdf) from the 2006 G20 meeting in Melbourne, Australia, will quickly highlight how these gatherings resemble an old and tired TV show rerun. The theme six years ago was "Accord for Sustained Growth," and the current objective is not much different, albeit the added focus on Europe's debt crisis. The draft communiqué obtained by the Associated Press says it all, or not.

The leaders will announce the "coordinated Los Cabos Growth and Jobs Action Plan"

The S&P 500 recently broke support and is now-- as of this writing-- lingering just below its 200-day simple moving average (SMA). Though there is hope for our equities markets to stay strong throughout the year, a major break in support raises a big red flag.

(click to enlarge)

If the S&P 500 continues to fall, breaking its 200-day SMA, additional support will likely not be found until the index reaches the-- somewhat far off-- $1,200 level.

(click to enlarge)

As the red flag has already been raised with the S&P 500's recent break in technical support, a further fall through the index's 200-day SMA will likely send investors running for the hills; i.e. into cash or other hedge investments.

Inverse exchange traded funds move inversely to the index of which they track and, therefore, can be a good option for those looking for this kind of hedge. Below is

The following are the list of eight ETFs in a down trend during the past 30 trading days. Most of these ETFs created new low lows and high lows in this time frame with a progressively high volume support. The markets had a two month rally and there are higher chances of a pullback. These ETFs are positioned to rise in a pullback scenario. These ETFs lost 6-32% this year, when the broad market (S&P500) gained 6.1% in the same period.

Proshares UltraShort MSCI Brazil (BZQ): The fund invests in derivatives that Proshare Advisors believe should have similar daily return characteristics as twice (200%) the inverse of the daily return of MSCI Brazil Index. It invests typically the rest of the assets in money market instruments. The fund is non-diversified. BZQ has $13.51M in assets. BZQ is currently trading at -40.9% lower volume compared to its 30 day moving average.BZQ

<<Back to part I

Let's say that the markets did, in fact, turn extremely bearish and you, being the wise investor you are, properly protected your capital and were stopped out of your positions. Now what?

My advice, assuming you don't short stocks or trade options, would be to shift your strategy toward equities that move in an inverse fashion, equities that rise as markets or other related indexes fall. Yes, these types of equities exist and yes, they are one of the easiest tools to use to profit from a down-trending market, sector, index, etc.

Inverse ETFs; Bear ETFs

Perhaps a better alternative would be to consult local investors. Wealthy people from any given country usually have an excellent pulse on the local economy. Either they actually run businesses or they have connections. In either case, they have specific relevant information that will never be available to foreign investors. Much of this information will never be known, because the locals have

By Daniela Pylypczak

The year-end periods provides the ETF industry with a couple of opportunities to flex its collective muscle; performance comparisons generally tend to favor those products with lower expense ratios–a defining feature of exchange-traded funds. But early January also puts another benefit of exchange-traded products into focus: enhanced tax efficiency relative to traditional mutual funds. The nuances of the exchange-traded structure have the potential to bring additional tax efficiencies to investors thanks to the availability of an “in kind redemption” that ultimately gives investors more control over the timing of tax obligations. Mutual funds, on the other hand, have a nasty tendency to stick remaining shareholders with tax liabilities incurred as a result of redemptions by others–a development that can obviously be undesirable.

ETFs won’t allow investors to skip out on their taxes, but this product structure can deliver more control and greater efficiency in this regard. It

According to the Chinese zodiac, 2012 is the Year of the Dragon – an auspicious symbol of good fortune and power. After enduring a roller coaster ride this year, investors will need all the good luck they can get in 2012.

Many of the themes of 2011 will carry over to 2012. The sovereign-debt crisis in Europe, the U.S. budget deficit, and the continuing debate over the sustainability of China’s economic growth will continue to weigh on investors next year.

Investors are pessimistic and there’s not much in the way of excitement when it comes to the stock market. Although such anxiety is understandable and justified, it sets the stage for contrarian calls. In other words, if the majority of investors expect a negative outcome, the markets may surprise by posting strong gains.

The global economy will not enter a recession in 2012 and will post decent economic growth of

Mutual funds and exchange traded funds tracking the so-called BRIC countries of Brazil, Russia, India and China have been a popular investment fad over the past several years. However, BRIC funds have badly lagged U.S. stocks this year, and Goldman Sachs (GS), which coined the acronym, thinks 2012 could be another tough year for emerging markets as the Europe debt crisis rages, according to a report Wednesday.

Unleveraged BRIC ETFs are down as much as 24% year-to

Exchange traded fund manager Direxion plans to increase the leverage for several ETFs that currently seek 200% of the daily returns of their tracking benchmarks.

The Boston-based firm said 10 ETFs will shift to 300% daily leverage effective Dec. 1. The move affects five “bull” funds and five “bear” funds.

Direxion is keen to get the word out so there are no surprises for shareholders when the ETFs make the move to higher leverage later this week, said Andy O’Rourke, Direxion’s marketing director, in a telephone interview.

All of the firm’s leveraged ETFs will be based on 300% leverage following the move.

Direxion competes against other leveraged ETF providers such as ProShares and Rydex SGI, which is being bought by Guggenheim Partners.

O’Rourke said the move to higher leverage is based on client feedback and needs.

“They’re not intimidated by 300% daily leverage

Direxion, one of the largest issuers of leveraged exchange-traded funds, will make significant changes to ten of its products next week. The Direxion ETFs currently offering 2x and -2x exposure to their underlying index will begin seeking to deliver daily results that correspond to 3x or -3x of the related benchmark. That change will obviously increase the volatility of these products, and will also have an impact on margin requirements for investors with positions in these funds.

The changes affect five pairs of products, including leveraged ETFs focusing on BRIC stocks, Indian equities, gold miners, natural gas firms, and retail companies:

The notion that the EU was "keeping up pressure on Athens" was the judgment of the media when it turned out yesterday that the euro-group would delay disbursement of the next loan tranche to Greece "until the Greek government has voted on implementing new austerity measures."

The German news magazine Der Spiegel put it this way :

Observers had been expecting that the ministers would at least approve the next tranche of aid, worth €12 billion ($17 billion), from the current €110 billion package that was agreed on by the EU and International Monetary Fund in May 2010. Greece needs the money by mid-July at the latest to avoid a national default.

But the euro-zone partners want to wait until the last minute before giving the green light. In a statement, the euro group said that the Greek parliament would first have to approve the latest round of austerity measures and

The European situation is increasingly deteriorating. While the events in Greece have been part of the broader conversation for why the stock market has been selling off in recent weeks, the relatively mild degree of the decline so far suggests that we have not even begun to price in the risk associated with the potential fallout effects from a Greece meltdown. The situation in Europe has the potential to become another episode like the Lehman collapse in September 2008. It could even become much worse. With a stock market that is already more than 30% above its long-term historical fair value, continuing to watch the indicators from Europe closely each and every day is critical to protect against swift and sudden downside.

In my post on May 24 entitled "Euro Crisis: Latest Reason for Bears to Emerge in Anticipation of QE2’s End," I discussed how the market was likely using

The Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America's share of the world output down to 17.7%, the lowest in modern times. China's would reach 18%, and rising. Just 10 years ago, the U.S. economy was three times the size of China's. ( Recent IMF report)

With the continued economic crisis in the U.S., the tumbling U.S. dollar, and the prospects of the U.S. losing sole superpower status, more and more investors are looking for alternatives to the traditional U.S. investment portfolio. While classic asset allocation models call for 70-85% of a portfolio to be invested in the U.S., it's important to note that there is a whole world of investment possibilities, even local options, which are just as, or even more, intriguing than solely

With respect to the eurozone peripheral nations, I find the continuing contrast between interest rate spreads (25% on 2-year Greek debt!) and the self-congratulatory comments by ECB board members, like that of Mr. Orphanides this morning, to be absolutely frightening:·

"It will not be necessary for the ECB to intervene to the same extent" in the bond market "to ensure the transmission of the monetary policy."

As readers may recall, the ECB refused to explain what it meant by "restoring the channels of monetary policy" when it set up the Securities Market Programme (SMP) in May 2010. However, such an evasion should surprise no one since the ECB allowed itself the luxury of stating a few days later that it had not even discussed the matter of turbulence on PIGS debt markets at their earlier meeting.

At the time, we pointed out that the damage caused by such semantic acrobatics

This week the focus goes to the giants of the emerging markets, the "BRIC" economies (the economic/investment one, not the political club). In this edition we review inflation, GDP, monetary policy and the stock markets of Brazil, Russia, India, and China. Also thrown in is a quick review of the monetary policy decisions over the past week.

1. BRIC Inflation

First up is a look at inflation. The BRIC economies are basically the key representatives of emerging markets. And if there's been one key theme for emerging markets, it's inflation. Inflation has been surging in the emerging market world over the past year, driven by a strong run-up in agricultural commodities, thanks to supply shocks paired with the steady increase in demand due to rising wealth in places like the BRIC economies. As I've noted before, inflation will be the key issue in emerging markets this year - mostly because

When rattling off the advantages that ETFs hold compared to traditional actively-managed mutual funds, most investors usually start with the issue of expenses. The easiest comparison to make involves expense ratios, the fees charged by ETF and mutual fund companies for investing in a product. Though some mutual funds offer single-digit expense ratios, most actively managed products charge in excess of 1% (the average for the mutual fund industry is in the neighborhood of 1.4%). By comparison, the average expense ratio for ETFs is less than 0.60%, and there are more than a dozen funds that charge less than 10 basis points.

But the potential cost efficiencies of ETFs relative to actively-managed mutual funds go beyond simple expense ratios. ETFs also have the potential to be more tax efficient, thanks to the unique “in-kind” rules of the creation/redemption process. Whereas mutual fund investors may incur capital gains as a result