Is John Bogle running ETF coverage at Dow Jones? After The Wall Street Journal last week discovered that something trading under 100 shares a day has a wider bid-ask spread than stuff running 150 million shares a day, Dow Jones Newswires seems surprised that investors are wheeling garbage sectors out to the curb:
While investors have been quick to embrace the “sector” type of exchange-traded funds, some appear to be having regrets...
...State Street Global Advisors’ S&P Homebuilders ETF (NYSEARCA:XHB), with $198 million in assets, is down about 30% in the past three months and about 49% since it hit the market in early 2006...The State Street fund has seen weekly outflows totaling $110.5 million since mid-July, after seeing weekly net inflows amounting to $141 million from the start of the year to mid-July, according to AMG (the fund has also seen large inflows and outflows at other times during the year, suggesting the recent outflows could reflect institutional rather than retail trading).
Having been short the aforementioned S&P Homebuilders ETF since shortly after its introduction, and despite its infliction of a tolerable amount of pain during the second half of that year when the value pimps were running after the sector’s initial setback, NakedShorts believes XHB to be a most excellent investment product. With still more excellence on the way.
Exchange-traded funds undergo first stress test
Dow Jones Newswires (via Chicago Tribune)
Sep. 13 2007
Earlier on NakedShorts
Disclosure: Author is Short XHB.