Change font size: Switch to default font size Switch to medium font size Switch to large font size

  The 2nd Annual Sunshine Backed Bonds™: Where Solar Meets Wall Street
New York, NY
May 2, 2014
  Global ABS 2014
Barcelona, Spain
10-12 June 2014
  The 20th Annual ABS East Conference
Miami Beach, Florida
September 21-23, 2014
  6th Annual Covered Bonds The Americas Conference
New York, NY
October 6, 2014
  12th Annual African Capital Markets Conference
Cape Town, South Africa
November 13-14, 2014
Main Website >>Structured Finance >>Blog >> ETFs Jump In It
<< Back to Blog
Email/Share:

Roger Nusbaum, Chief Investment Officer, YOUR SOURCE FINANCIAL (RIA)

ETFs Jump In It
Tuesday, March 22 2011 | 03:31 PM
Roger Nusbaum
Chief Investment Officer, YOUR SOURCE FINANCIAL (RIA)

If you didn't hear, Index IQ is coming out with a global small cap agribusiness ETF that will have ticker CROP. It is supposed to start trading today.

About all I could glean for now about the make up of the fund is that it will hold stocks from a lot of different countries, no stock will exceed 10% (subject to rebalancing) and 30% of the fund will be in crop production and farming. We'll see what that means perhaps as soon as later today but this could be about a close as we get to a farmland ETF.

There are all kinds of plantation stocks trading in Asian markets and a couple where the plantations are in Asia but the stocks list in London. These are not easy to trade and if the fund captures that then this stands to be meaningful and also have the potential to look much different than Market Vectors Agribusiness (MOO) that we own for clients.

Emerging Global filed last week to dramatically increase its India offerings with sector funds that correspond to the ten big SPX sectors. They already have India covered with infrastructure and small cap. India has become a tougher market to own, fundamentally. A few years ago it seemed like anything India went up, this was also the case with Chinese stocks. As is often the case the theme has evolved and success requires being more selective.

Long story short I want no part of financials or telecom in India. The other sectors are all at least maybes. Any broad large funds will have exposure to those two sectors, the EG Shares India Small Cap Fund (SCIN) doesn't seem to have any telecom but does have some financials in it. The consumer space is very promising from the top down but buying that fund would depend on what was in it. I think utilities is kind of a sector for the future as there are things like hydroelectricity but the electricity infrastructure seems fairly primitive for now. The industrial and materials sectors will obviously capture the infrastructure needed as well the actual infrastructure fund.

At some point I expect we'll add India across the board as we had it quite a few years ago and it would be nice to have choice at the sector level as individual stocks from India are a little tougher to access.

WisdomTree now has an Asian bond ETF and it avoids Japan which is a plus. I wrote about it for theStreet.com. WisdomTree has a Latin American bond ETF in the works which could also be very interesting unless it is 40% Mexico or something.

Yesterday I stumbled across a Brazilian hydroelectric company called AES Tiete (AESAY). I don't know much about it yet but where there is at least one in Brazil, India and a couple in China I'm thinking there are several others around the world--maybe enough for an ETF? Alternative energy is a volatile space but I think it makes more sense to consider when the alternative energy comes from the utility than when it is dependent on the end user retrofitting their home.

Maybe we can add this to the list of ETF ideas we've compiled over the years which includes toll road, air and sea ports, cement companies and publicly traded exchanges.

Visit My Website!
0 Comment | Add Comment(s) | ETFs, Indexing, Emerging_Markets, Energy, Agribusiness, Asia,


<< Back to Blog
Email/Share:

Leave a Comment

To make comments, please Sign-In