Index Funds Update (2/16/2001):
Weekly Newsletter | Febuary 16, 2001 | Issue No. 000104
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Scroll down for an updated list of index returns...
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IndexFunds Company News and Announcements
We were on the scene last week in Palm Beach for The World Series of Exchange-Traded Funds talking to investors and the industry about the future of ETFs. Look for stepped-up ETF coverage in the coming days.
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Featured Articles
New This Week
SPDR Outlook
Yes, the Nasdaq market is down, but here's the multi-trillion dollar question: Is the market down enough? Since its high early in 2000, the Nasdaq 100 Index is down about 50%. Is this correction enough justification for the cuts in sales and estimated earnings by the major technology companies? How has the tech downturn affected S&P indexes and ETFs that track them? Commentary by Max Isaacman of East/West Securities
indexfunds.com
Global Sector Indexes
Dow Jones Indexes launched the Dow Jones Sector Titans Indexes, a new set of indexes comprised of global blue-chip companies. The securities in the sector indexes are culled from the Dow Jones World Index, which includes companies from 34 countries. UK-based index provider FTSE also went live with a series of global sector indexes yesterday. The FTSE family includes 11 sector indexes. News article by John Spence
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Overblown
Will folios and ETFs render mutual funds obsolete? Not likely. Too often financial innovations that affect the mutual fund industry are portrayed in a black and white fashion. They are either viewed as just a curious sideshow, or else they are quickly proclaimed to be a fundamental challenge to the health, viability or even the very existence of the fund industry as we know it. Exciting new ideas are not seen as complementary to an established but evolving industry. Instead they are quickly converted in the headlines into revolutionary Davids poised with slingshot in hand to attack an oversized, lumbering and soon to be extinct mutual fund Goliath. Issues article by Gavin Quill of Financial Research Corporation
indexfunds.com
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Previous Articles
Chasing Returns
The results of studies produced by behavioral economists help us understand the behavior of individuals and the mistakes they make. Financial economists debate the value of such studies in terms of any ability to provide insights into market prices and market rates of return. However, these studies can certainly provide insights into how we might improve investor (as opposed to market) returns - and there can be a tremendous difference between market returns and the returns achieved by investors. This article examines historical performance data and the principles employed by behavioral economists to break down the detrimental effects of chasing the hot fund or sector. Issues article by Larry Swedroe
indexfunds.com
Across the Ocean
The American Stock Exchange (AMEX) and Euronext have announced plans to cross-list and trade U.S. and international exchange-traded funds (ETFs). Effectively, ETFs that trade on Euronext will soon be available on the AMEX, and vice versa, pending regulatory approval. AMEX said the move was one of the first in a series of steps to establish a global and fungible ETF trading system that will allow retail and institutional investors to trade ETFs across international time zones. News article by John Spence
indexfunds.com
Take Our Exclusive Survey
Investors unite! Recent threads on the message boards of this website have made it abundantly clear that there is a certain discontent brewing among index investors. Sometimes it seems like there is just aren't products to meet our demand. Have you ever been frustrated by the lack of reasonably-priced, passive funds covering a certain part of equities markets? Looking for that special ultra-small emerging markets value fund to snuggle up with? Now is your chance to air it out. Issues article by Jim Wiandt
indexfunds.com
Real Estate ETF
The first exchange-traded fund that tracks a Real Estate Investment Trust (REIT) index began trading on the American Stock Exchange on Friday, 2/2/2001. The new ETF was launched by Barclays Global Investors (BGI) and is called the iShares Cohen & Steers Realty Major Fund (trading symbol: ICF). The fund will track a modified cap-weighted index of 30 REITs, and has an expense ratio of 0.35%. News article by Index Funds staff
indexfunds.com
2001 ETF Launches
2000 was a busy year for exchange-traded fund (ETF) launches and asset growth. According to the American Stock Exchange (AMEX), assets in ETFs listed on the exchange reached $70.3 billion, nearly doubling the 1999 year-end total of $35.9 billion. Also, the total number of ETF products jumped to 92, compared to 32 the previous year. And if the opening month of 2001 is any gauge for the upcoming year, expect plenty more ETFs to come to market worldwide. News article by John Spence
indexfunds.com
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Our discussion boards are a haven of brilliant and independent thought: Any question is welcome on the Beginner's Board, The Main Board is the central discussion forum for all matters having to do with index funds, and on the ETF Board you can banter to your heart's content about these crazy things they call exchange-traded funds that seem to be sweeping the globe and changing the face of indexing. URLs for discussion boards follow:
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Don't know what half the jargon on this newsletter means? Come and Learn. One good run through all the listed articles and tools in the Learn section, combined with some recommended reading from our Books page, should have you fully up to speed and ready for sensible index investing.
Short-Term Returns 1 wk to 2/16 1 mo to 1/31 1 yr to 1/31
Russell 2000 0.45% 5.21% 3.69%
Russell 3000 0.68% 3.42% -0.39%
Dow Jones Industrial 0.17% 1.02% 0.98%
Nasdaq -1.85% 12.23% -29.63%
S&P 500 -1.01% 3.55% -0.90%
3-month T-bill -0.61% 0.46% 6.31%
30 yr bond 1.55% 1.41% -14.71%
VG REIT 0.26% 0.43% 26.13%
Annualized Returns 5 yr to 1/31 10 yr to 1/31
Russell 2000
11.47% 15.12%
Russell 3000 17.51% 17.20%
Dow Jones Industrial 17.08% 17.48%
Nasdaq
21.21% 20.94%
S&P 500 18.36% 17.36%
3-month T-bill 5.36% 4.93%
30-yr bond -1.67% -
Complete Returns to 12/31/00: indexfunds.com |
