The number of US-listed exchange traded products increased by 13 in June after dropping by 14 the prior month. The total value of shares traded was $1.5 trillion, just below May’s $1.505 trillion.

June brought the introduction of 16 new products, consisting of 14 ETFs and two MacroShares. One ETN and two MacroShares were delisted. The total number of listed products at the end of June stood at 843 (757 ETFs, 2 MacroShares, and 84 ETNs), two less than the 2008 year-end total.

JP Morgan Chase (JPM) is not making any friends in the ETF/ETN marketplace. Their moves have not been adequately announced or explained, leaving shareholders perplexed and angry. The latest example is the delisting of the BearLinx Alerian MLP ETN (former ticker BSR) after the end of trading on June 12, 2009.

We predicted something was up with BSR when JP Morgan Chase quietly announced a new ETN would soon be tracking the same index. The launch of JP Morgan Alerian MLP Index ETN (AMJ) came in April, and in May BSR changed its index from the Alerian MLP Select Index to the Alerian MLP Index. At that time, JP Morgan had two identical ETNs.

The Failure of Corporate Governance

A reckless pattern of behavior was common to the massive failures at Fannie Mae (FNM), Freddie Mac (FRE), AIG, Lehman (LEHMQ.PK), Merrill, Bear Stearns, Citigroup (C), Wachovia, Countrywide and Washington Mutual, et al.

They all had Boards of Directors who as fiduciaries were charged with oversight responsibility through a duty of care obligation, but who presided over operations that: i) bet the business on a massive leveraging of minimal enterprise equity; ii) used such leverage to produce extraordinary non-cash “profits” that ended up as toxic assets on the balance sheet; and iii) then authorized generous bonus payments – substantially in cash – to senior management for the production of those illusory non-cash balance sheet “profits”.

By Patrick Watson

Last month a new exchange-traded note slipped under the radar and received very little notice. The JPMorgan Alerian MLP Index ETN began trading under the ticker AMJ on April 2.

The Bear Stearns Alerian MLP Select ETN (BSR) modified its name. It's now called BearLinx Alerian MLP Select ETN, so that investors may not associate the exchange-traded note with the Bear Stearns buyout last year.

Nevertheless, the investment still tracks the performance of 50 Master Limited Partnerships in the Alerian Select Index. The objective is to provide investors with a means to access the expansive energy MLP universe. And it currently yields about 6.5%.

Many of our readers at AboutETFs.com enjoyed our earlier article The Complete List of Currency ETFs and have been requesting a similar list for commodities. So, once again, by popular demand, here is our newest list, The Complete List of Commodity ETFs and ETNs, as of October 20, 2008.

COMMODITY BASKETS (All Commodities)

Coal MLPs

Last week Barron’s mentioned master limited partnerships as juicy yield opportunities with strong appreciation potential.  Reuters followed up the next day with an article about the Barron’s article.  Investors seem to have rallied around those articles causing major gains among pipeline companies.

It certainly is refreshing to see a group that has not been viewed as fundamentally flawed (like banks), moving strongly up in unison.  A number of markets had a positive week last week, but not as strong as pipelines.

Master limited partnerships, or MLPs, usually invest in energy assets like oil fields and natural-gas processors. The majority of their profits are passed along to investors as tax-deferred distributions, and many are now boasting yields around 11%. The Alerian Capital index of MLPs is down 44% this year, but the upshot is that as MLP prices fall, payouts rise. Citigroup thinks its list of 36 MLPs could yield annual returns of 84%.

In the breakdown of our current financial system, which many deemed impossible or at least highly improbable, I believe we have witnessed the appearance of a black swan. The term black swan comes from the ancient Western conception that 'all swans are white.’ In that context, a black swan was a metaphor for something that could not exist. (Source: www.wikipedia.org.)

In Nassim Taleb's book The Black Swan: The Impact of the Highly Improbable, he discusses how randomness and uncertainty are much more common than investors would like to admit. In our financial markets, what people perceive to be rare and improbable events do occur. Some examples of these are the stock market crash of 1987, the terrorist attacks on September 11, 2001, and the recent meltdown of our financial system. Yet investors tend to fight the acceptance of this reality. As a result, investors tend to make decisions based on certain assumptions. When markets move outside the realm of these assumptions many are confused, scared and panicked. This is because the reality of investing is much more complicated and unpredictable than many are willing to accept. Opportunities and dangers appear when we least expect them.

Chance Carson is founder and chief investment officer at Alpine Strategies in Colorado Springs, Colo. The firm uses exchange-traded funds, exchange-traded notes and closed-end funds in managing portfolios for high-net-worth investors.

On Friday, IndexUniverse.com Managing Editor Murray Coleman caught up with the veteran portfolio manager and analyst, who also runs an educational site at www.aboutetfs.com. Carson, who has been a money manager and analyst for more than 35 years, is currently designing portfolios with around 35% of Alpine's total client assets allocated to alternative investments.

Exchange-Traded Notes (ETNs) aren’t known for paying high dividends.  In fact, ETNs don’t usually pay dividends at all.  Among the 90 (+) ETNs actively trading today, and flying well below most investor radar screens, there are actually four of these “stealth-like” dividend paying ETNs.  Known by few investment advisors and even fewer investors, dividend paying ETNs have been quietly trading among sophisticated income investors for more than a year.`

Until now a little-known, though large, closely held partnership in Tulsa, Okla., SemGroup (SGLP) transports, stores and distributes crude oil and refined products. It filed for bankruptcy protection last week after losing more than $2.4 billion on energy contracts...Exactly what drove the company to that fate remains unclear, but clues have started to emerge amid court hearings and other ripples from the implosion.

By Matthew Hougan

Jim Wiandt's mostly right about ETNs. What matters is how they perform for investors.

By Matthew Hougan

News that Bear Stearns (BSC) is facing a liquidity crisis has had no major impact on the BearLinx Alerian MLP Select Index ETN so far.

2007 was a banner year for ETFs, with assets rising $215 billion (or 51%) over year-ago levels. Let’s look at where each company stands at year-end.

Based on data from the Amex, the U.S. ETF industry ended the year with total net assets of $632 billion (as of 12/28). If you add in ETN assets, that number jumps to $637 billion. That’s up nearly $215 billion from the ICI’s 2006 estimate of $422.5 billion. Not bad ...

The argument for exchange-traded notes [ETNs] gets stronger every day.

Barclays Bank has changed the policy on its iPath ETNs to allow daily redemptions at net asset value [NAV], rather than weekly, as was originally the case. Barclays Managing Director and Head of Investor Solutions, Americas, Philippe El-Asmar, says the firm had originally thought a weekly redemption schedule was reasonable to allow the ETN market to develop and that the conversion to daily redemptions demonstrates Barclays' commitment to the success of its ETNs.

The Bearlinx Alerian MLP Select Index Exchange Traded Note (ticker BSR) was launched in July. We wrote about the Alerian MLP Index in our December 2006 issue, and concluded that since natural/geologic processes (e.g., oil and gas field depletion) were a key component of many MLPs, it could provide attractive diversification benefits to a portfolio.

We also noted the caveat that the overall amount of MLPs outstanding was quite small in comparison to the major asset classes, and the cost of access might therefore be prohibitive.

New Wisdom Tree 401(k) Platform

WisdomTree Retirement Services, a subsidiary of the ETF provider WisdomTree Investments, announced yesterday the launch of a 401(k) platform. This is one of several ways companies are trying to set up platforms for easy ETF access in 401k plans. The platform uses index-based investing and WisdomTree’s fundamental ETFs in addition to no-load, actively-managed mutual funds for extra diversification. The open platform features third-party ERISA fiduciary and investment advisory services and is designed to be used by plan sponsors, advisers, brokers and third-party administrators (TPAs).

As investors constantly search out the latest, greatest dividend-yielding securities, it was only a matter of time until they got to Master Limited Partnerships, or MLPs. MLPs are most oil and gas infrastructure companies that are structured as ... as the name suggests ... partnerships. That structure means that they pass essentially all of their income down to shareholders, in the form of high dividends; the corporations are exempt from taxation. These MLPs have been a hot topic recently: A report from Standard and Poor's says that the number of energy-related MLPs is up 150% over the past six years.

Looking to capitalize on investor interest, S&P recently unveiled an index tracking the space. Potential components must also have market capitalization of at least $300 million and a three-month average daily trading value of at least $2 million. Currently, 40 companies make the grade, and components are capped at 15% of the index. Through July 13, the index was up 17.37% year-to-date, and had an impressive 21.73% five-year annualized return.