ETFs: 2009 Year-in-Review

The U.S. exchange-traded fund industry continues to evolve and attract assets. U.S. ETFs closed out 2009 with $785 billion in assets, up from roughly $533 billion at the end of 2008. In 2009, investors poured $104.1 billion in net new assets into ETFs, following a banner year in 2008 that saw ETFs draw some $156.6 billion in net inflows. Of the industry’s 47% increase in year-over-year total net assets, roughly 40% was attributable to net inflows during the past year, while the remaining 60% was the result of strong market performance.

{loadposition in-article}

A total of 134 new ETFs were launched in 2009. There was a relatively broad range of funds introduced during the course of the year, with U.S. equity (37 ETF launches last year), leveraged and inverse (33), fixed-income (30), and international equity (24) being the most popular categories, in terms of product proliferation.

Meanwhile, 54 ETFs were shuttered, 12 of which were exchange-traded notes. [Read the full article]

I often refer to the trade of the decade. Several readers have asked exactly what I mean by that, and I realized I haven’t written about this in a while.

Let me explain: The trade of the decade is going to be in the small bank stocks, many of which have been punished in the real-estate crisis and are trading well below tangible book value.

They still face tremendous head winds — the real-estate overhang is far from resolved — but the time it getting very close to load up on these stocks. I recently bought two bank stocks for the first time in nearly five years because they appeared too cheap not to own at current levels.

A little background. The aftermath of the Savings and Loan crisis in the late 1980s and early 1990s was the most fun I have ever had in the financial business. I was a broker for a regional firm that made markets in most of the regional banks in the mid-Atlantic. [Read the full article]

The S&P 500 and Nasdaq are up for the year after a rough stretch from mid-January to early February. The Dow had joined them earlier Wednesday before pulling back.

Investors had been freaking out about Greece, and growing evidence that the U.S. economic rebound wouldn’t be very sharp, the much hoped for V-shaped recovery. But a sense of calm has returned over the past few weeks.

Fears of a massive wave of defaults in Europe no longer dominate the headlines and investors seem to be taking comfort in a weak U.S. economy — that just means interest rates will stay near zero for the foreseeable future.

Consumer spending was strong in January (perhaps too strong) and companies are showing increased confidence in the economy by stepping up the pace of mergers.

John Derrick, director of research with U.S. Global Investors in San Antonio, said he thinks that investors will continue to accentuate the positive. [Read the full article]

The dollar advanced against major rivals Thursday as investors looked to the buck for its safe haven appeal ahead of the February jobs data due Friday.

What prices are doing: The dollar rose 0.8% against the euro to $1.3585 and climbed 0.4% against the pound to $1.5036. The greenback spiked 0.8% against the yen to ¥89.12.

The dollar lost ground Wednesday against major currencies after Greece announced cost-cutting measures and revenue generators to reduce its deficit this year.

What’s moving the market: The number of Americans that filed for first-time unemployment insurance last week fell to 469,000 last week, after spiking the previous week due to severe winter weather. Economists expected jobless claims to drop to 470,000.

The figure came ahead of the highly anticipated February jobs report due Friday. Economists expect that employers shed 65,000 jobs during the month and that the unemployment rate will tick up to 9.8% from 9.7% in January. [Read the full article]

You may also like...