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Weird ice cream flavors have in recent years spread like mad and now include such inviting types as raw horseflesh or sardines and brandy. Is something similar happening in the world of ETFs, or Exchange Traded Funds? Mario Draghi, chairman of the Financial Stability Board, hinted as much last week. On Monday, the FSB delivered a more detailed report on the matter, noting that these once “plain vanilla” investment products have taken a “disquieting” turn and have tacked on “new elements of complexity and opacity.” The new flavors of ETFs pose new challenges regarding counterparty and collateral risks and could...

With total US assets recently crossing the $1 trillion mark, the ETF industry has continued to swell in 2010, becoming an undeniable force in the financial universe. The story of this rapid growth has had plenty of triumphs as well as controversy. Looking ahead to 2011, here are five predictions of what's next for ETFs. 1. Physically backed gold ETFs stir up controversy. While the rumor mill has buzzed about the trio of US-listed physically backed gold ETFs -- SPDR Gold Shares (GLD), iShares Comex Gold (IAU), and ETFS Physical Swiss Gold Shares (SGOL)-- for some time now, controversy may...

The uber-popular SPDR Gold Shares ETF "GLD" is the subject of a long and fascinating profile in the WSJ titled: How A Fund Helped Make Gold Prices Glitter. The gist is that in 2004, gold was a dreary, forgotten asset and so the gold industry got together and democratized gold by creating an ETF that tracked the commodity and that since then there's been this huge boom. Now it is true that the ETF is now one of the biggest holders of gold in the world, and it is true also that gold has boomed since the launch of the...

I am a palladium bug, not a silver bug or gold bug. Although I do like silver and gold, and I like all precious metal investments, my favorite remains palladium. But regardless of what precious metal you like best, I urge all precious metal investors to own only physical metals and stocks of their favorite precious metal mining companies. I strongly discourage owning any Exchange Traded Funds (ETFs) that invest only in futures contracts or other paper instruments. I cited The United States Natural Gas ETF (UNG) and The United States Oil ETF (USO) as perfect bad examples. At one...

-snip- SPDR Gold Trust (NYSE: GLD) represents 3.91% of the fund's reported portfolio. The fund held 2,450,320 shares as of September 30th, up 2,445,420 since the fund's last filing. -snip-

Bedlam Asset Management takes a look at exchange traded funds in its latest market commentary (H/T paver). Specifically, at how — largely because of greed — a sound concept has once again potentially been bastardised by the financial industry. As Bedlam notes, ETFs started off as a simple and good idea. They were convenient for investors, easy to understand, affordable, the natural successor of earlier market structures like futures. But then — unhappy with the ETFs’ solid but low returns — the industry turned to financial rocket scientists to try and beef up the ETF game. Or as Bedlam observes:...

CHICAGO (Reuters) - Exchange-traded funds or ETFs have become a top target in U.S. regulators' efforts to rein in excessive speculation in oil and other commodity markets, The Wall Street Journal reported on Saturday. Commodity ETFs, which came into existence in 2003, offer one of the few avenues for small investors to gain direct exposure to commodity markets. The funds pool money from investors to make one-way bets, usually on rising prices. Some say this causes excessive buying that artificially inflates prices for oil, natural gas and gold. Commodity ETFs have ballooned to hold $59.3 billion in assets as of...

There may be many things to hope for in the oncoming Obama administration. Investing in the bullion ETF, GLD, is not one of them. 1. I'll start with the opening sentence of the gold ETF itself and work outwards to you. The opening sentence of the November 2004 gold ETF prospectus said, "This ETF is intended to track the performance of the price of gold." Note that it doesn't say it will own gold, or anything so prosaic. This Exchange Traded Fund that promises easy gold ownership for America is only going to track it. You know, like your cat...

The global financial system these days is beginning to look like a giant Whac-a-Mole game--when we think we've knocked down one speculative bubble, another one just like it pops up. The latest is the commodities bubble--everything from oil and natural gas to gold, copper, wheat and rice....Like the credit bubble, this speculative bubble in commodities has badly distorted the workings of key markets and sectors of the global economy....this bubble is creating vast new wealth for some, including brokers, traders and investment houses who have gorged on fees and trading profits. The difference this time, however, is that even before...

China's oil reserve build-up adds to global demand It plans a stockpile equivalent to 30 days' worth of imports by 2010 By Moming Zhou, MarketWatch Last update: 6:40 p.m. EDT March 11, 2008 SAN FRANCISCO (MarketWatch) -- China's plans to build its strategic petroleum reserves to at least 100 million barrels by 2010 could add more pressure to crude prices which have already been at record highs. The world's second-largest oil consumer already has built two underground storage reserves in east China and will put into use two more storage bases soon, a senior Chinese official said over the weekend,...

BOSTON (MarketWatch) -- On the long-running television drama "Law & Order," fictional district attorney Jack McCoy's persuasive arguments often win over an undecided jury and seal the fate of that episode's villain du jour. Now, the actor who plays the hard-driving lawyer, Sam Waterston, is making a case for exchange-traded funds in TV ads for online broker TD Ameritrade Holding Corp. The commercials featuring the recognizable actor are another sign that ETFs -- essentially mutual funds that follow indexes and trade like individual stocks -- are moving into the mainstream. Still, like a signature Jack McCoy cross-examination, the ads raise...

I understand the concept of ETFs, and their theoretical advantages, i.e. real time pricing and transactions, and lack of minimum holding periods. What opinions and experiences have you had with China-based ETFs, such as FXI and GXC? Thanks.

I recently came across a photo which purports to show nearly a billion dollars in privately owned gold bullion, in one vault. The gold bullion is supposed to be held in trust for shareholders who purchase ETFs or gold shares in this company. Be that as it may, I don't want this thread to turn into a discussion of precious metal ETFs, or the price of gold, or gold versus fiat money etc.I just have some questions which only an engineer can answer. Does this picture physically "add up?" I rough-count approx. 150 pallets in sight, with approx. 80 bars...

(NOTE: I have reposted this to correct an error I made initially in including text from the Guardian, which is not allowed on FR. Thanks to Admin Mod for pulling my mistake. This corrected update includes no Guardian text or links.) Drudge has linked an article from the Guardian titled "The Real Price of Gold", a banned source for FR, that goes into loving detail about the toxic nature of gold mining. Written in a sensationalist style with the tag line: "It weighs 1oz. It costs £1,000. And it creates 30 tons of toxic waste" astute Freepers could probably write...

What is Happening with the Silver ETF? Roland Watson Oct 14, 2005 So what exactly is happening with the anticipated Silver ETF that Barclays Bank filed with the SEC in June? Their proposal to set up an exchanged-traded fund with an initial offering of 13 million shares each representing 10 ounces of silver set the world of silver abuzz but now all seems quiet. You can find the filing for the ETF at this official SEC link. The alleged problems began when a rumour was reported on the 15th September that the SEC had rejected the filing. The text of...