Trading volume in stocks and exchange traded funds is light Thursday on the last trading day of the year, and the major indexes are trading lower. World stocks, however, ended the year on a high note. World stocks closed out 2009 higher, closing out a 9-month-long bull run in the markets, reports Pan Pylas for the Associated Press. Many markets around the world advanced 50% or more this year. Asia was the real standout: this year, the Shanghai index moved 80% higher, while Hong Kong’s Hang Seng added more than 50%.

• SPDR S&P All World ex-U.S. (NYSEArca: GWL): up 28.7% year-to-date

Money in the markets and ETFs is continuously ebbing and flowing. As the market recovers, it’s always interested to take a look and see where the cash is going.

Last week, a solid majority of fund types reported their best weekly inflows of the year while money market funds experienced large outflows, writes Joe Morris for Ignites.

Various segments of the domestic equities markets, particularly mid-caps and certain segments like technology, are now past an important inflection point, where short-term trading momentum has overpowered long-term investment momentum, as indicated by the fact that the 50 day exponential moving average has crossed above the 200 day exponential moving average for a number of domestic equities indexes.

Abroad, this technical posture is already old news, and it's more or less universal across major markets (you can take a quick snapshot by following global equities exchange traded funds like GWL).

There is a meaningful possibility growing that equities around the world could stage a sharp rally within the next week or so. I say this for several reasons.

After decades of flying high and shrugging off crises around the world, U.S. equity markets have fallen on some tough times. The epicenter of the mortgage crisis that evolved into a global recession has scared away many investors away from the U.S. markets, afraid that the worst is yet to come and that the “glory days” of America have passed.

Investor reluctance to jump back into the U.S. markets is perhaps best evidenced by the increase in popularity of “ex-U.S” ETFs, funds that offer exposure to a well-diversified basket of global securities but avoid any investments in the United States.

Does the recipe for ETF investing success lie outside the borders of the United States? Increasingly, experts are stepping forward to add their voice to the chorus of those who believe the answer is yes.

It’s long been known that two-thirds of the world’s market cap lies outside the United States. This means that investors who choose to ignore the rest of the world in favor of U.S. companies might be cutting off a potentially valuable lifeline to their portfolios.

By Jim Wiandt

Another wise guy takes pot shots at all ETFs and finds an audience in a sea of misinformation.

The general consensus on the fate of the U.S. dollar is that it will weaken over time. And some even think the demise will be dramatic. In fact, you'd be hard-pressed to find folks who believe the U.S. currency has a shot at strengthening in the years ahead.

There may be less agreement about the U.S. economy. Some argue that we were the first to enter the darkness, but that we'll be the first to see the light. Others believe that we'll be lucky to find ourselves muddling through years of stagnation. Nevertheless, there's few that believe that our economy will demonstrate enormous prosperity, even as we recover.

As representatives of the G20 assemble in Washington to discuss the state of the global economy, this seems like a good time to take the wraps off of the VIX and More Global Volatility Index.

Without getting into all the details, the Global Volatility Index calculates a weighted average of the implied volatility in options for equities in the 15 largest global economies, which represent approximately 76% of the world’s economic activity.

By Matthew Hougan

Ever wonder why international markets perform differently from the U.S. (and each other)? Just look at the sectors.

By Martin Denholm

"Beware the Ides of March."

So said a wise soothsayer to Julius Caesar in the famous Shakespeare play, warning him of impending doom. Caesar scoffed at him - and of course lived to regret it when he paid the ultimate price.

There were quite a few markets around the world that did not have a great 2007. Ireland was down 25%. That is a significant haircut and I have to think the vast majority of the selling is done. If you believe that stock markets move ahead of the economy, there could be more economic issues in Ireland that surface to be sure, but I would be surprised if there is a lot more downside for stocks there. For perspective, though, I started with a 3% allocation to Ireland that is now smaller--point being I have moderate exposure that did not crucify me.

Sweden is an interesting one. The market there was down about 8%, but most of that can be attributed to a 40% (in dollar terms) decline in Ericsson (ERIC). I have one Swedish stock that, although way off its high, was up about 20% this year (that includes a small tailwind from SEK strength).

For all of the attention that BGI, Vanguard, PowerShares and even ProShares, Rydex and Claymore have been getting lately, SSgA— with still the largest ETF and second-largest total ETF assets BY FAR—has quietly built a stable of world-class products.

I come to that last conclusion by seeing treasuries continue to strengthen against the S&P as well as gold and silver. Worst hit by credit fears, as could be predicted, are small caps, who are obviously most likely to be hit by more stringent credit standards.

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All-World, and All-World Ex-US
iShares MSCI ACWI (All Country World Index) Index Fund ETF (ACWI)
SPDR MSCI ACWI ex-US ETF (CWI)
SPDR S&P International Small Cap ETF (GWX)
The SPDR S&P World ex-US ETF (GWL)
Vanguard All-World Ex-US ETF (VEU)
Schwab International Equity ETF (SCHF)
WisdomTree International Hedged Equity Fund (HEDJ)

Vanguard already allows investors cheap international exposure to Europe and the Far East (Vanguard European ETF (VGK) and Vanguard Pacific ETF (VPL) respectively) both at 18bps but this new ETF will allow international exposure in one position. With the ETF world having focused in recent years on the narrowest of regions and sectors, we’re now seeing quite a few product launches for broader international exposures.

For example, SSGA now has three ETFs allowing for very broad international exposure:

The SDPR S&P International Small Cap ETF (AMEX: GWX) will focus on companies in developed markets with market capitalizations below $2 billion. It will charge 60 basis points in expenses.

State Street said Wednesday morning two new international ETFs, based on S&P/Citigroup Global Equity Indices, will begin trading Thursday April 26. SPDR S&P International Small Cap ETF includes companies with market caps under $2 billion domiciled in developed countries outside the U.S. It will trade under the ticker (GWX) and carries a 0.60% expense ratio. SPDR S&P World ex-US ETF includes more than 5,000 companies domiciled in developed countries outside the U.S. including Canada. It will trade under the ticker (GWL) and carries a 0.35% expense ratio. "The new SPDRs offer investors precise, low-cost access to developed international markets, including the first capitalization-weighted vehicle covering international small cap equities... these two new SPDRs are powerful additions for investors looking to build well-diversified portfolios," the company said in a press release. This brings State Street's ETF count to 53 -- including 16 offering access to international and emerging markets.