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Are you considering an international ETF for your portfolio? Indeed, 2019 turned out to be the second-best year on record for ETFs. In this period, exchange-traded funds inflows exceeded $326 billion. However, 2020 was a different year as the stock market started to experience challenges due to COVID-19.

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Hedge Fund Expert Explains Why Asia-Focused Firms Are Outperforming U.S. Market Benchmarks

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Vanguard Core Plus Bond ETF

Vanguard, the second-largest U.S. issuer of exchange traded funds, is again wielding its low-cost sword.
On April 26, <a href="https://www.benzinga.com/money/vanguard-review/">Vanguard</a> said it&#39;s lowering fees on 21 of its ETFs, including its two largest funds, the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/voo#NYSE">VOO</a>) and the Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vti#NYSE">VTI</a>).
<h3>What Happened</h3>
VTI and VOO are the third- and fourth-largest U.S.-listed ETFs, respectively, and are <a href="https://etfdb.com/compare/market-cap/">two of the four</a> ETFs with more than $100 billion in assets under management. The $114.79 billion VTI is now charging 0.03 percent year, or $3 on a $10,000 investment, down from 0.04 percent. The $112.94 billion VOO also saw its annual fee reduced to 0.03 percent from 0.04 percent.
Including VOO and VTI, Vanguard announced lower fees on <a href="https://investornews.vanguard/lower-expense-ratios-on-21-vanguard-etfs-means-more-savings-for-you/">eight domestic ETFs</a>. The following ETFs saw their fees reduced to 0.04 percent from 0.05 percent: The Vanguard Growth ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vug#NYSE">VUG</a>), the Vanguard Value ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vtv#NYSE">VTV</a>), the Vanguard Large-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vv#NYSE">VV</a>) and the Vanguard Mid-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vo#NYSE">VO</a>).
The Vanguard Extended Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vxf#NYSE">VXF</a>) saw its annual fee pared to 0.07 percent from 0.08 percent while the Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vym#NYSE">VYM</a>) is charging 0.06 percent, down from 0.08 percent.
<h3>Why It&#39;s Important</h3>
As issuers have reduced fees across product lineups, international funds have steadily gotten cheaper. Nine international equity ETFs are part of the latest round of Vanguard fee reductions.
The following funds are now charging 0.09 percent, down from 0.10 percent: the Vanguard Total World Stock Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vt#NYSE">VT</a>), the Vanguard FTSE Europe ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vgk#NYSE">VGK</a>) and the Vanguard FTSE Pacific ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vpl#NYSE">VPL</a>).
The Vanguard Total International Stock ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vxus#NASDAQ">VXUS</a>) and the Vanguard FTSE All-World ex-US ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/veu#NYSE">VEU</a>) are now charging 0.09 percent, down from 0.11 percent.
The $72.16 billion Vanguard FTSE Developed Markets ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vea#NYSE">VEA</a>), the sixth-largest U.S.-listed ETF, saw its fee reduced to 0.05 percent from 0.07 percent,&nbsp;while the Vanguard FTSE All-World ex-US Small-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vss#NYSE">VSS</a>) saw a modest fee reduction of one basis point to 0.12 percent.
The Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vwo#NYSE">VWO</a>) and the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vnqi#NASDAQ">VNQI</a>) both now charge 0.12 percent annually, down from 0.14 percent. Home to $65.35 billion in assets under management, VWO is the world&#39;s largest emerging markets ETF.
<h3>What&#39;s Next</h3>
Vanguard also lowered the fees on four fixed income ETFs. The Vanguard Emerging Markets Government Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vwob#NASDAQ">VWOB</a>) now charges 0.30 percent, down from 0.32 percent. The Vanguard Total International Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bndx#NASDAQ">BNDX</a>) also a fee cut of two basis points to 0.09 percent.
The Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bnd#NYSE">BND</a>) and the Vanguard Tax-Exempt Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vteb#NASDAQ">VTEB</a>), Vanguard&#39;s first municipal bond ETF, both lowered fees by one basis point.
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A few days ago, <a href="http://www.benzinga.com/topic/don-steinbrugge">Agecroft Partners</a> founder and CEO Don Steinbrugge wrote an <a href="https://www.benzinga.com/markets/emerging-markets/17/06/9636391/why-theres-a-big-opportunity-in-asia-focused-hedge-funds">article</a> titled &ldquo;Why There&#39;s A Big Opportunity In Asia-Focused Hedge Funds.&rdquo;
Asia-based, Asia-focused hedge funds offer <a href="https://www.benzinga.com/markets/emerging-markets/17/06/9636391/why-theres-a-big-opportunity-in-asia-focused-hedge-funds">great opportunities for investors nowadays</a>; Steinbrugge told Benzinga in a follow-up interview. However, he suggested that we &ldquo;dive a little bit deeper and examine some of the inefficiencies in the market&rdquo; because, at the end of the day, the skill of a money manager rests on beating an index, beating the market, not on beating other funds.
<h3>What Hedge Funds Do Best</h3>
Only a <a href="https://www.benzinga.com/personal-finance/financial-advisors/17/02/9000294/expert-why-smaller-hedge-funds-will-continue-to-ou">handful of long/short equity managers</a> in the U.S. have managed to consistently beat the S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) in recent years. On the other hand, many Asia-based long/short equity managers focusing on regional indexes like the iShares MSCI Pacific ex-Japan Idx (ETF) (NYSE: <a class="ticker" href="/stock/epp#NYSE">EPP</a>) have managed to beat their benchmarks by very large margins. Similar has been the case with China-focused funds, which have beat their market by roughly 10 percent per annum in recent years.
But, which factors are helping these Asia-based managers deliver such strong performances?
First and foremost is the volatility of the markets in Asia, Steinbrugge explained. One of the things that has hurt U.S. managers is the extremely low volatility, reflected by the iPath S&amp;P 500 VIX Short Term Futures TM ETN (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>) and the underlying VIX Index&rsquo;s current levels, close to all-time lows. &ldquo;If you don&rsquo;t have a lot of volatility, you don&rsquo;t have a lot of relative price movements between securities,&rdquo; he said. The basic premise investors rely upon is to go long on stocks they think will do well and subsequently sell short those they anticipate to perform poorly. Following that line of thinking, in the absence of volatility, investors will be forced to wait very long times before those securities reach their sell or buy targets, he said. &ldquo;In Asia, there is significant volatility. So, if you find a security you like a lot, it potentially will reach its target price much quicker and you can have higher turnover in your portfolio.&rdquo;
The second thing that is very different about Asia when compared to the U.S. marketplace is that the former is dominated by retail investors, who are not as sophisticated as hedge funds &mdash; which dominate a very small portion of the market. &ldquo;As a result of that, doing fundamental research on these companies, hedge funds can get an information edge over retail investors,&rdquo; the expert told Benzinga, pointing out that getting such an advantage in the U.S. is extremely difficult.
Another element impacting the performance of Asia-focused hedge funds is the &ldquo;greater rotation of industry leadership,&rdquo; Steinbrugge continued. Taking China as an example: Until quite recently, its economy was dominated by &ldquo;old economy industries&rdquo; like steel; however, massive investments have helped these companies pivot to more current industries like tech and services. &ldquo;When you large rotation of the industries like that, you are going to have winners and losers. For a long/short equity manager, it makes it easier to add value because you can find very good companies to buy, and you can also find very good companies to sell short that are going to get hurt during this rotation.&rdquo;
<h3>	Where In Asia</h3>
Before moving on, it&rsquo;s important to clarify what the hedge fund industry calls Asia. Perhaps counter-intuitively, "Asia" excludes the Middle East but includes Australia, as well as Southeast Asian countries, India, China, Japan, Korea and Hong Kong.
Another way to outperform U.S. benchmarks by investing in this region is to realize what works in certain countries, Steinbrugge said. Is it a new type of grocery store? Is it a new type of restaurant? Is it some type of local product that can be replicated in a different market with a different company?
&ldquo;Looking at what has worked really well in one country and trying to identify a company in another country that is replicating the same idea is a way to outperform the market. Also looking at companies in the same industry in different markets and comparing their relative strengths.&rdquo;
<h3>The Macro Factor And Valuations</h3>
Finally, there&rsquo;s a macroeconomic factor: Asia already produces 36 percent of the world&rsquo;s GDP, and the IMF is forecasting approximately two-thirds of global growth over the next five years will come from that region. Nonetheless, only 4&ndash;5.5 percent of the $3 trillion in global hedge fund assets are allocated to these countries, Steinbrugge said.
Juxtaposing this to the fact that securities in Asia are valued at a significant discount to U.S.-traded stocks, it becomes clear that these markets offer larger opportunities to add value to funds&rsquo; portfolios.
<h3>Embracing Emerging Managers</h3>
Most of the Asia-focused hedge funds outperforming U.S. markets are based off Asian countries. &ldquo;It is always better to be closer to where the investment opportunities are,&rdquo; Steinbrugge explained. &ldquo;It used to be that people were biased against Asia based managers because they weren&rsquo;t viewed as having the same institutional quality. But today, these hedge funds have very large research teams; a lot of them are either Western-educated or the people running the firm have spun out of either large hedge funds or large investment banks and have very accomplished biographies.&rdquo;
While restraining from naming any specific Asia-focused funds, Steinbrugge emphasized the vast number of options. In fact, just between Singapore and Hong Kong, there are more than 55 organizations that manage over $1 billion in assets.
<h3>The Risks</h3>
Last but not least, Steinbrugge highlighted the risks of investing in Asia-focused hedge funds.
&ldquo;I think it&rsquo;s important that investors have a diversified portfolio, and if they are going to allocate to Asia, they should limit what percentage they invest in Asia. If they are investing in a <a href="https://www.benzinga.com/personal-finance/financial-advisors/17/01/8906368/hedge-fund-expert-don-steinbrugge-on-money-flows-a">mutual fund or a hedge fund</a>, over time it should experience higher volatility than investing in U.S. equities,&rdquo; he explained. &ldquo;But it also has the potential to generate higher returns long term than U.S. equities, so you have to take a long-term horizon when you allocate to Asia. I mean, if two-thirds of the world's growth is coming from Asia, it probably makes sense to have some part of your portfolio allocated to Asia.&rdquo;
Other Asia-focused ETFs outperforming the S&amp;P 500 this year include:
<ul>
<li>
		Vanguard FTSE Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>)</li>
<li>
		iShares MSCI South Korea Index Fund(ETF) (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>)</li>
<li>
		iShares MSCI Cntry Asa Jpn Idx Fnd ETF (NASDAQ: <a class="ticker" href="/stock/aaxj#NASDAQ">AAXJ</a>)</li>
<li>
		iShares MSCI Taiwan Index (ETF) (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>)</li>
<li>
		iShares MSCI Philippines Investable (NYSE: <a class="ticker" href="/stock/ephe#NYSE">EPHE</a>)</li>
<li>
		iShares MSCI Indons Invstbl Mrkt Indx Fd (NYSE: <a class="ticker" href="/stock/eido#NYSE">EIDO</a>)</li>
<li>
		Market Vectors Vietnam ETF. (NYSE: <a class="ticker" href="/stock/vnm#NYSE">VNM</a>)</li>
</ul>
More From Benzinga:
<a href="https://www.benzinga.com/personal-finance/financial-advisors/17/03/9134918/don-steinbrugge-explains-reinsurance-a-strategy-th">Don Steinbrugge Explains Reinsurance: A Strategy That Helps Hedge Funds Remain Safe From Market Volatility</a>
<a href="https://www.benzinga.com/personal-finance/financial-advisors/17/04/9313278/how-people-choose-hedge-funds-the-importance-of-br">How People Choose Hedge Funds: The Importance Of Branding</a>
Image Credit: <a href="https://www.instagram.com/javierhasse/">Javier Hasse</a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Hedge Fund Expert Explains Why Asia-Focused Firms Are Outperforming Market Benchmarks

Japan has been the shining star of the Asia-Pacific region this year, a fact highlighted by the impressive returns generated by and staggering inflows to ETFs such as the WisdomTree Japan Hedged Equity ETF (NYSE: <a class="ticker" href="/stock/dxj#NYSE">DXJ</a>) and the iShares MSCI Japan ETF (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>).

	Related: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/08/3835625/s-p-spotlights-differences-in-two-big-japan-etfs">S&amp;P Spotlights Differences In Two Big Japan ETFs</a>.

	Other Asia-Pacific countries have tried investors' patience. Australia ETFs have pulled back due to <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/08/3835625/s-p-spotlights-differences-in-two-big-japan-etfs">slack commodities demand</a>. Investors have only recently shown signs of responding to attractive valuations on Chinese stocks and the list of frustration goes on from there.

	The good news, is select Asia-Pacific ETFs, including those that are not Japan-heavy, could offer investors some upside through year-end.

	"S&amp;P Capital IQ's Asia Investment Policy Committee's (IPC) continues to see China, Hong Kong and Korea's stock markets rising significantly by year end," said S&amp;P Capital IQ in a new research note. "The second half of the year should see Shanghai's A-shares' index closing the year more than 16% higher. The Hang Seng China Enterprise Index, or so-called H-shares' index of Chinese companies trading in Hong Kong, are expected by Asia IPC to rise more than 20% by the end of the year."

	The Vanguard FTSE Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) is one avenue for playing a rebound in Asia-Pacific equities. As is par for the course with Vanguard ETFs, VPL is cheap with an annual expense ratio of 0.12 percent, making it less expensive than 92 percent of comparable funds.

	More importantly, VPL has held up nicely this year with an almost 11 percent gain, a gain that has been made possible in large part by the ETF's almost 57 percent weight to Japan. Australia, Hong Kong and Singapore, <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3725320/some-aaa-rated-country-etfs-got-an-f-in-q2">all of which have AAA credit ratings</a>, combine for 32.3 percent of the ETF's weight. S&amp;P Capital IQ rates VPL Overweight.

	The PowerShares BLDRS Asia 50 ADR Index Fund (NASDAQ: <a class="ticker" href="/stock/adra#NASDAQ">ADRA</a>), an ETF comprised of Asian stocks that trade in the U.S., is another option for investors to mull. ADRA allocates 47.3 percent of its weight, but the fund does offer investors exposure to a possible rebound in Australian and Chinese equities as those countries combine for over 32 percent of the ETF's weight.

	Toyota (NYSE: <a class="ticker" href="/stock/tm#NYSE">TM</a>) is by far ADRA's largest holding at 14.6 percent, which is more than 640 basis points larger than the weight given to BHP Billiton (NYSE: <a class="ticker" href="/stock/bhp#NYSE">BHP</a>), the ETF's second-largest holding. S&amp;P Capital IQ rates ADRA Overweight.

	S&amp;P Capital IQ also sees some promise with South Korea ETFs.

	"Korea's Kospi, which has slipped 5.8% this year through August 9, could soar more than 27% by year's end," said the research firm.

	Due to the <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3743218/the-south-korea-etf-myth">weak Japanese yen</a> and fears over Federal Reserve tapering, factors South Korea itself has identified as the primary risks to Asia's fourth-largest economy, the iShares MSCI Capped South Korea ETF (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) has lost more than 13 percent year-to-date.

	However, major global banks including Citigroup, Goldman Sachs and J.P. Morgan have recently made bullish calls on South Korean stocks, citing compelling valuations, and EWY has surged 12 percent off its June lows. S&amp;P Capital IQ rates EWY Overweight.

	The First Trust South Korea AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fko#NYSE">FKO</a>), which is down 11 percent this year, garnered a Marketweight rating from S&amp;P.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

	<a href="http://www.benzinga.com/etfs">Disclosure: Author is long DXJ.</a>

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WisdomTree Trust Japan Total Dividend Fund

Opportunity Beckons With Asia-Pacific ETFs

Vanguard keeps bolstering its reputation as one of the low-cost leaders among ETF issuers. Just days after the Pennsylvania-based firm <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3363539/vanguard-pares-fees-on-high-dividend-etf">announced lower fees</a> for the popular Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="/stock/vym#NYSE">VYM</a>), the company unveiled lower expense ratios on eight other ETFs.

Included in the new batch of fee reductions is the Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), which has over $60 billion in assets under management making it the largest emerging markets ETF by that metric. VWO will now charge 0.18 percent from year, down from 0.2 percent. 

At 0.18 percent, VWO now has the same expense ratio as the iShares Core MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>), the ETF rolled about by BlackRock's iShares unit in October as lower cost alternative to VWO and the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>).

Other Vanguard ETFs that now have lower fees include the Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) and the Vanguard MSCI Europe ETF (NYSE: <a class="ticker" href="/stock/vgk#NYSE">VGK</a>) now have expense ratios of 0.12 percent down from 0.14 percent.

The Vanguard Total International Stock Index ETF (NYSE: <a class="ticker" href="/stock/vxus#NYSE">VXUS</a>) is home to a 0.16 percent annual expense ratio compared with 0.18 percent previously while the Vanguard Total World Stock Index ETF (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>) is now charging 0.19 percent compared with 0.22 percent prior to the announcement.

Investors will now pay 0.32 percent per year to own the Vanguard Global ex-US Real Estate ETF (NYSE: <a class="ticker" href="/stock/vnqi#NYSE">VNQI</a>), down from 0.35 percent. The Vanguard FTSE All-World ex-US ETF (NYSE: <a class="ticker" href="/stock/veu#NYSE">VEU</a>) also saw a three-basis point fee reduction to 0.15 percent from 0.18 percent.

The Vanguard FTSE All-World ex-US Small-Cap Index ETF (NYSE: <a class="ticker" href="/stock/vss#NYSE">VSS</a>) has a new expense ratio of 0.25 percent down from 0.28 percent. 

Over the past year, Vanguard has lowered fees on 45 of its ETFs, <a href="http://www.benzinga.com/markets/bonds/12/12/3201733/vanguard-trims-fees-on-sector-etfs">including its 10 sector funds</a>.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

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More Vanguard ETF Fee Cuts, Including VWO

On Tuesday, Vanguard rocked the exchange-traded products world by announcing it would drop MSCI (NYSE: <a class="ticker" href="/stock/msci#NYSE">MSCI</a>) indexes on 22 of its funds. Pennsylvania-based Vanguard, the firm that pioneered index funds and today is the third-largest U.S. ETF sponsor, said the moves "should save millions of dollars in licensing expenses for the funds—savings that will ultimately benefit shareholders," <a href="https://personal.vanguard.com/us/insights/article/fund-announcement-10022012">according to a statement issued by the firm</a>.

Of the 22 Vanguard funds that will start tracking new indexes, six are international funds, including the now soon-to-be former Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>). With $67 billion in assets under management, VWO is the third-largest U.S.-listed ETF and the largest emerging markets ETF. 

VWO will start tracking <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2960202/vanguard-dropping-vwos-msci-index">the FTSE Emerging Markets Index, which is sponsored by U.K.-based FTSE Group</a>. Other marquee Vanguard ETFs ditching MSCI in favor of FTSE indexes, include the Vanguard MSCI Europe ETF (NYSE: <a class="ticker" href="/stock/vgk#NYSE">VGK</a>) and the Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>).

There is perhaps no other way of describing this news than as bad for MSCI, which was spun off from Morgan Stanley (NYSE: <a class="ticker" href="/stock/ms#NYSE">MS</a>) in 2007. The investment bank would sell the remainder of its stake in 2009. On Tuesday, shares of MSCI plunged almost 27 percent on volume that was nearly 26 times the daily average. It was the largest single day decline for the stock on record, <a href="http://www.bloomberg.com/news/2012-10-02/msci-falls-most-on-record-as-vanguard-dumps-provider-correct-.html?cmpid=yhoo">according to Bloomberg</a>.

Not Always This Way
Without confirmation to this effect, there is no reason to believe there was a rift between Vanguard and MSCI leading up to the announcement. In fact, Vanguard was once an ardent supporter of MSCI. On a page that was still up <a href="https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/article?File=IWEVIPERsMSCI">on the Vanguard web site</a> as of early Wednesday, the fund issuer said the following: "In recent years, most of Vanguard's index funds and Vanguard ETFs have switched to new benchmarks from Morgan Stanley Capital International, because MSCI incorporated many of the criteria that Vanguard believes to be the cutting edge in constructing better indexes."

On that page, Vanguard goes on to outline six advantages of MSCI indexes, including float adjustment, market coverage, market cap levels and rebalancing schedule. Vanguard even said "there can be better ways to slice the pie" while going on to note "For index funds, the MSCI benchmarks potentially provide several incremental advantages on a net basis. As the table above illustrates, these benefits include lower portfolio transaction costs and potentially lower taxes, allowing your clients to capture more of the return of the target market. 

"More important, MSCI indexes are a better reflection of their target markets. By tracking these indexes, Vanguard's index funds and Vanguard ETFs are better tools for implementing your asset allocation strategies."

What Happened?
Vanguard's reason for shifting away from MSCI indexes, cost-cutting, is plausible. The Vanguard brand, in large part, is built around the fact that investors view the company as the purveyor of some of the lowest-cost ETFs and mutual funds on the market. 

All that is to say unless Vanguard publicly discloses another reason for parting ways with MSCI, the cost issue will have suffice as the explanation. What is clear is that the change is not just big news, it is big. Period. It is the largest ever international index switch, according to FTSE. 

"Today's agreement with Vanguard underlines FTSE's continuing growth as a global brand," said Mark Makepeace, Chief Executive of the FTSE Group, in a statement. "With the switch, FTSE will become the third-largest equity exchange traded product index benchmark provider globally, with more than $124 billion in ETF assets benchmarked to FTSE indices."

BlackRock (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>), parent company of iShares, the world's largest ETF sponsor, is not looking to fan the flames of <a href="http://www.benzinga.com/markets/bonds/12/09/2901028/5-etfs-ishares-could-cut-fees-on">its rivalry with Vanguard</a>, but the firm is standing behind MSCI.

"MSCI is the gold standard of global and international equity indexes – the near-universal choice of professional investors. We plan to deepen our partnership with MSCI to help deliver the highest quality products and portfolio construction to our clients," said Mark Wiedman, global head of iShares, in an email to members of the media sent on Tuesday.

South Korea
The role South Korea's status as an emerging market played in Vanguard's decision to move to the FTSE Emerging Markets Index is a point of speculation. South Korea's emerging markets status <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/06/2685297/msci-south-korea-still-emerging-greece-could-be-on-its-w">has been hotly contested</a>.

The country is an OECD member and FTSE, the International Monetary Fund and the World Bank all view the country as developed. The iShares Emerging Markets Dividend Index Fund (NYSE: <a class="ticker" href="/stock/dvye#NYSE">DVYE</a>), which tracks a Dow Jones index, devotes a scant percentage of its weight, 3.99 percent, to South Korea. That puts the country behind Malaysia, Czech Republic and Indonesia, to name a few, in that ETF.

Still, MSCI continues to classify South Korea as emerging. That is not a knock on MSCI. It is just statement of fact. FTSE classifies the following nations as advanced developing economies: Brazil, Czech Republic, Hungary, Malaysia, Mexico, Poland, South Africa, Taiwan and Turkey. The following are classified as secondary emerging nations: Chile, China, Colombia, Egypt, India, Indonesia, Morocco, Pakistan, Peru, the Philippines, Russia, Thailand and the United Arab Emirates

The bottom line is this: Twenty-two Vanguard funds will no longer use MSCI indexes and the announcement runs counter to the kind words the fund sponsor once had for the index provider.

For more on ETF indexes, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2960202/vanguard-dropping-vwos-msci-index">here</a>.

Specialty ETFs

Pre-Market Outlook

DVYE

MSCI

Once Upon A Time, Vanguard Loved MSCI

Despite trying times for international equities this year, Japanese stocks have held up relatively well compared to other global markets, perhaps indicating that investors should consider plays in the world's third-largest economy.

"As recovery and reconstruction proceed, investors may want to look at the dominant developed Asian equity issuer," according to S&amp;P Capital IQ. In a new research note, S&amp;P Capital said "ETFs offer investors a compelling way to gain exposure to Japan."

In the research note, S&amp;P highlights three ETFs, including two Japan-specific plays, that the firm has Overweight ratings on. The iShares MSCI Japan Index Fund (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>), with almost $4.9 billion in assets under management, is the largest Japan ETF and is one of the three to earn an Overweight rating from S&amp;P.

"While the ETF is the most expensive of the three (0.51 percent gross expense ratio), five of the six top-10 holdings with S&amp;P Fair Value rankings are considered undervalued according to that metric, and four top-10 holdings have an above-average (A- or higher) S&amp;P Quality Rank metric," S&amp;P said in the note.

Home to 312 stocks, EWJ's top-10 holdings include Toyota (NYSE: <a class="ticker" href="/stock/tm#NYSE">TM</a>), Mitsubishi UFJ Financial, Honda (NYSE: <a class="ticker" href="/stock/hmc#NYSE">HMC</a>) and Canon. Industrials represent almost 25 percent of EWJ's weight while consumer cyclical names receive an allocation of more than 18 percent. EWJ is higher by a tenth of a percent year-to-date.

S&amp;P also has an Overweight rating on the Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>). The Vanguard MSCI Pacific ETF is not a pure play Japan ETF, but the fund does devote 60 percent of its weight to Asia's second-largest economy. VPL also offers exposure to Australia, Hong Kong and Singapore.

"Of the fund's top-10 holdings, seven have above-average S&amp;P Quality Rankings, three of those being Japanese equities, and of the top holdings that have an S&amp;P Fair Value rank, the only two considered undervalued are Japanese stocks," S&amp;P said. 

VPL charges just 0.14 percent per year, making it less expensive than 90 percent of comparable funds, according to Vanguard's web site.

The WisdomTree Japan Hedged Equity Fund (NYSE: <a class="ticker" href="/stock/dxj#NYSE">DXJ</a>) also garnered an Overweight rating from S&amp;P. DXJ is designed to provide investors exposure to Japanese equities while hedging against dollar/yen fluctuations. The yen hedge has proven popular with investors as DXJ has almost $622 million in assets under management. In addition, <a href="http://www.wisdomtree.com/etfs/fund-details.aspx?etfid=18">the fund has a distribution yield of 3.95 percent</a> and has risen 2.1 percent year-to-date.

DXJ, which charges 0.48 percent per year, holds over 650 stocks and allocates a combined 38 percent of its weight to industrial and financial services names. 

The The iShares MSCI EAFE Index Fund (NYSE: <a class="ticker" href="/stock/efa#NYSE">EFA</a>) is another ETF with significant Japanese exposure. The fund allocates 21.4 percent of its weight to Japan and is rated Overweight by S&amp;P. 

In a market environment that has left investors wary of risk, Japanese equities may be another safe option beyond the U.S.

"Japan tends to act as a safe haven, outperforming when risk aversion rises so it's not a bad place to hide right now as Europe's debt crisis persists, BRIC economies slow and the U.S. fiscal cliff looms," S&amp;P said.

For more on Japan ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/04/2478940/japans-currency-conundrum-tok-ewj-fxy">here</a>.

Currency ETFs

Forex

After-Hours Center

S&P: Bullish on Japan ETFs (DXJ, EFA, EWJ)

Here is the ETF Professor's ETF Watch List for Monday May 14, 2012.

The Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>) looks like it will remain in play for the next few days.

Economic data will have the Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) on the move.

Celebrate risk off with the ProShares UltraShort Basic Materials (NYSE: <a class="ticker" href="/stock/smn#NYSE">SMN</a>).

Keep an eye on the ProShares UltraShort MSCI Europe (NYSE: <a class="ticker" href="/stock/epv#NYSE">EPV</a>).

Emerging markets plays of the day: ProShares UltraShort Brazil (NYSE: <a class="ticker" href="/stock/bzq#NYSE">BZQ</a>), Direxion Daily Russia Bear 3X Shares (NYSE: <a class="ticker" href="/stock/russ#NYSE">RUSS</a>) and the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>).

Forex play of the day: CurrencyShares Swiss Franc Trust (NYSE: <a class="ticker" href="/stock/fxf#NYSE">FXF</a>).

Bond play of the day: SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>).

New ETFs

RUSS

ETFs to Watch May 14, 2012 (EPV, FXF, JNK)

Avoiding China in an emerging markets ETF is easier said than done. There are nearly 230 exchange-traded products with some exposure to the world's largest country by population. Throw in roughly 100 Chinese companies listed on U.S. exchanges and it's not hard for American investors to get exposure to China.

In 2011, that was unwanted exposure. Maybe that will change in 2012 and there is a vocal chorus of pundits saying Chinese stocks are undervalued, but there are other ETF opportunities in Asia, several of which could leave China-specific ETFs in the dust this year.

Here are a few to consider.

iShares MSCI Philippines Invstable Market Index Fund (NYSE: <a class="ticker" href="/stock/ephe#NYSE">EPHE</a>)
Indeed, we have have been bullish on <a href="http://www.benzinga.com/trading-ideas/long-ideas/11/12/2198124/twelve-for-12-emerging-markets-etfs-to-watch-in-the-new-year">EPHE for a while</a>. With good reason. The facts are facts. The lone Philippines-specific ETF debuted in September 2010. Since then, the ETF is flat, which is far better than what can be said of the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) over the same time frame.

Remember, the Philippines has excellent GDP growth prospects without the pesky inflation problems of China or India.

iShares MSCI Thailand Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/thd#NYSE">THD</a>)
The perfect example of a 2010 star that fell on hard times last year, the iShares MSCI Thailand Investable Market Index Fund has the makings of a 2012 rebound candidate. Well, if and it's a big "if" Thailand's political situation remains stable. THD put in a bottom just below $49 in October and the ETF has rebounded to trade near $61, so the bounce is underway. There's still upside to be had though. If emerging markets ETFs come back into vogue, THD could run to the mid-70s.

Global X FTSE ASEAN 40 ETF (NYSE: <a class="ticker" href="/stock/asea#NYSE">ASEA</a>)
Assume for a minute that you want exposure to Singapore, Malaysia, Indonesia and Thailand. Well, there's an ETF for that and it's the Global X FTSE ASEAN 40 ETF. ASEA has almost $21 million in AUM, more than a lot of people probably realize the ETF has. ASEA's off to a good start this year having gained more than 3% and would be even more intriguing on a move above $15.50.

Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>)
Consider the Vanguard MSCI Pacific ETF a more conservative play on Asia ex-China. The ETF does feature Hong Kong exposure, but the rest of its country allocation is devoted to Australia, Japan, New Zealand and Singapore. Two reasons to like this ETF: It's home to almost 470 stocks. It has an expense ratio of just 0.14%. That is 91% lower than the average expense ratio of funds with similar holdings, according to the Vanguard Web site.

iShares MSCI Singapore Index Fund (NYSE: <a class="ticker" href="/stock/ews#NYSE">EWS</a>)
Although Singapore has a developed market way about it, this ETF could be every bit the rebound candidate that THD is, maybe more so. Singapore's is an export-driven economy and major trading partners include China, U.S., Indonesia, Japan, Hong Kong and Malaysia. That's fine, but the question marks surrounding EWS come in the form of Singapore's other trading partners.

Those would be Austria, Belgium, Bulgaria, Cyprus, Czech Rep, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Rep, Slovenia, Spain, Sweden and the United Kingdom. 

Now you see why there some caution is needed regarding this ETF. However, it yields 4.3% and rests almost 21% off its 52-week high, so there could be some value here.

Technicals

ASEA

iShares MSCI Thailand Investable Market Index Fund

The Best Non-China Asia ETFs For 2012

Here is the ETF Professor's ETF Watch List for Monday July 25, 2011.

Earnings Plays: Guggenheim China Technology ETF (NYSE: <a class="ticker" href="/stock/cqqq#NYSE">CQQQ</a>), SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/xop#NYSE">XOP</a>) and the Semiconductor HOLDRs (AMEX: <a class="ticker" href="/stock/smh#AMEX">SMH</a>).

Another tech play: Direxion Daily Semicondct Bull 3X Shares (NYSE: <a class="ticker" href="/stock/soxl#NYSE">SOXL</a>).

The WisdomTree International ETF (NYSE: <a class="ticker" href="/stock/dka#NYSE">DKA</a>) looks interesting here.

Emerging markets plays of the day: Market Vectors Vietnam ETF (NYSE: <a class="ticker" href="/stock/vnm#NYSE">VNM</a>), Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>) and the Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>).

Forex play of the day: WisdomTree Dreyfus Emerging Currency ETF (NYSE: <a class="ticker" href="/stock/cew#NYSE">CEW</a>).

Bond play of the day: Direxion Daily 20+ Yr Treasury Bear 3X Shares (NYSE: <a class="ticker" href="/stock/tmv#NYSE">TMV</a>).

Earnings

WisdomTree Dreyfus Emerging Currency Fund

CQQQ

WisdomTree Trust International Energy Sector Fund

SOXL

Direxion Daily 20+ Year Treasury Bear 3X Shares

ETFs To Watch July 25, 2011

One of the more interesting M&amp;A melodramas of recent weeks has been speculation about BHP Billiton (NYSE: <a class="ticker" href="/stock/bhp#NYSE">BHP</a>), the world's largest mining company, acquiring Woodside Petroleum (PK: WOPEY), Australia's second-largest oil and natural gas producer.

On Sunday, several credible international media outlets reported BHP may be mulling a $48.5 billion takeover of Woodside with the Australian reporting that the mining giant may attempt to acquire the 24.27% stake in Woodside that Royal Dutch Shell (NYSE: RDS-A), Europe's largest oil company, is looking to sell.

BHP has since said it is not aware of the basis for the reports, but the world knows this much: BHP CEO Marius Kloppers likes to at least try to get big deals done. Assuming he's successful this time around, these are the <a href="http://www.marketbulletin.com/etf.php">ETFs</a> you might want to keep an eye on.

1) iShares MSCI Australia Index Fund (NYSE: <a class="ticker" href="/stock/ewa#NYSE">EWA</a>):
The obvious choice as both companies are based in Australia. BHP is EWA's largest component with a weight of almost 16% and Woodside accounts for nearly 3% of EWA's weight. It's hard, if not impossible, to find an ETF where BHP and Woodside combine for a greater weight.

2) Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>):
BHP is VPL's top holding as well and Woodside figures prominently in the ETF's mix, too. In typical Vanguard fashion, VPL has a meager 0.14% expense ratio, making it an alluring play exclusive of these takeover rumors.

3) WisdomTree International Energy ETF (NYSE: <a class="ticker" href="/stock/dka#NYSE">DKA</a>):
Woodside is DKA's ninth-largest holding, but Royal Dutch Shell accounts for over 13% of DKA's weight and that company could figure prominently in any designs BHP has on Woodside.

4) BLDRS Asia 50 ADR Index Fund (Nasdaq: <a class="ticker" href="/stock/adra#Nasdaq">ADRA</a>):
This light volume ETF doesn't get a lot publicity, but for the situation, it's worth a look as BHP is the ETF's largest holding with a weight of almost 12.5%.

Rumors

Management

Movers

ETFs For A BHP Acquisition Of Woodside...If It Happens

Here is the ETF Professor's ETF Watch List for Monday April 11, 2011.

The PowerShares Financial Preferred ETF (NYSE: <a class="ticker" href="/stock/pgf#NYSE">PGF</a>) was one lonely in the green among ETFs focusing on financials last Friday.

The iShares MSCI Japan Index Fund (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) and the iShares MSCI Australia Index Fund (NYSE: <a class="ticker" href="/stock/ewa#NYSE">EWA</a>) will both be in play for different reasons.

Oil plays: ProShares Ultra DJ-UBS Crude Oil (NYSE: <a class="ticker" href="/stock/uco#NYSE">UCO</a>), Teucrium Crude Oil Fund (NYSE: CRUD) and the United States 12 Month Oil Fund (NYSE: <a class="ticker" href="/stock/usl#NYSE">USL</a>).

Emerging markets plays of the day: iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), Vanguard Pacific Stock ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) and the PowerShares India Portfolio (NYSE: <a class="ticker" href="/stock/pin#NYSE">PIN</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: Direxion Daily 20+ Yr Treasury Bull 3X Shares (NYSE: <a class="ticker" href="/stock/tmf#NYSE">TMF</a>).

PowerShares Exchange Traded Fund Financial Preferred Portfolio

Direxion Daily 20+ Year Treasury Bull 3X Shares

ETFs To Watch April 11, 2011 (EWA, FXA, USL, UCO)

Here is the ETF Professor's ETF Watch List for Tuesday March 22, 2011.

The iPath S&amp;P 500 VIX Short-Term Futures ETN (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>) was down almost 8% on Monday.

The Guggenheim Global Timber ETF (NYSE: <a class="ticker" href="/stock/cut#NYSE">CUT</a>) is shaping up to be a nice play on Japan's recovery.

Speaking of that subject, the Global X Uranium ETF (NYSE: <a class="ticker" href="/stock/ura#NYSE">URA</a>) appears to be in recovery mode.

The Global X Silver Miners ETF (NYSE: <a class="ticker" href="/stock/sil#NYSE">SIL</a>) had a nice 5.3% on Monday.

Emerging markets plays of the day: iShares MSCI Chile Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>), Vanguard Pacific Stock ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) and the iShares MSCI Malaysia Index Fund (NYSE: <a class="ticker" href="/stock/ewm#NYSE">EWM</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>).

ETFs To Watch March 22, 2011 (JNK, ECH, CUT, URA)

Here is the ETF Professor's <a href="http://marketbulletin.com/etf.php">ETF</a> Watch List for Tuesday March 15, 2011.

It goes without saying the Global X Uranium ETF (NYSE: <a class="ticker" href="/stock/ura#NYSE">URA</a>) and the Market Vectors Nuclear Energy ETF (NYSE: <a class="ticker" href="/stock/nlr#NYSE">NLR</a>) are both going to be in play.

Protect against more Dow declines with the ProShares Short Dow30 (NYSE: <a class="ticker" href="/stock/dog#NYSE">DOG</a>).

The Market Vectors Coal ETF (NYSE: <a class="ticker" href="/stock/kol#NYSE">KOL</a>) was resilient on Monday.

Japan plays: iShares MSCI Japan Index Fund (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) and the Vanguard Pacific Stock ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>).

Emerging markets plays of the day: iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>), iShares MSCI Hong Kong Index Fund (NYSE: <a class="ticker" href="/stock/ewh#NYSE">EWH</a>) and the iShares MSCI Malaysia Index Fund (NYSE: <a class="ticker" href="/stock/ewm#NYSE">EWM</a>).

Currency play of the day: Go back to the CurrencyShares Japanese Yen Trust (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>).

Bond play of the day: iShares Barclays 20+ Year Treasury Bond ETF (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>).

iShares Trust Barclays 20+ Year Treasury Bond Fund

ETFs To Watch March 15, 2011 (DOG, KOL, NLR, VPL)

There were exactly 1,000 ETFs listed for trading at the end of February.  Adding in the 135 listed ETNs yields a total quantity of 1,135 exchange-traded products (ETPs).  Fourteen new products were introduced in February, consisting of thirteen ETFs and one ETN.  There were no delistings for the month, and the quantity of actively-managed ETFs held constant at 33.
Trading activity fell slightly during February with total dollar volume coming in at $1.22 trillion.  Average daily trading actually increased over the January rate, as the 3.1% decline in monthly dollar volume was more than offset by the 5% fewer trading days.
The number of ETFs in the Billion Dollar Club, those averaging more than one billion dollars in daily trading activity, dropped from ten to eight.  Those eight funds, less than 1% of the total ETPs, accounted for 55.8% of all ETP dollars traded.
Products averaging more than $100 million per day numbered 69, an increase of five over January.  Those 69 funds, just a little over 6% of the total ETPs, accounted for 88.5% of all ETP dollars traded.
Back in August 2009, I wrote about the <a href="http://investwithanedge.com/the-etf-92-8-rule" target="_blank">ETF 92-8 Rule</a>, an ETF trading variation of the widely acknowledged 80-20 Rule.  The ETF 92-8 Rule states that 92% of ETF trading activity is generated by just 8% of the funds.  The Rule is alive and well, and perhaps it might be understating things a bit.  For February, a more precise ratio (two numbers that add up to 100) would be 93-7, but I'm not ready to change the name of the rule just yet.
Assets under management were $1.06 trillion at the end of February, a +3.5% increase for the month and +4.7% year-to-date.

<table class="wptable rowstyle-alt" id="wptable-92" cellspacing="1" cellpadding="2">
<thead>
<tr>
<th class="sortable" style="width:250px" align="left">February 2011 Month End</th>
<th class="sortable" style="width:70px" align="center">ETFs</th>
<th class="sortable" style="width:70px" align="center">ETNs</th>
<th class="sortable" style="width:70px" align="center">Total</th>
</tr>
</thead>
<tr>
<td style="width:250px" align="left">Currently Listed U.S.</td>
<td style="width:70px" align="center">1,000</td>
<td style="width:70px" align="center">135</td>
<td style="width:70px" align="center">1,135</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Listed as of 12/31/2010</td>
<td style="width:70px" align="center">967</td>
<td style="width:70px" align="center">132</td>
<td style="width:70px" align="center">1,099</td>
</tr>
<tr>
<td style="width:250px" align="left">New Introductions for Month</td>
<td style="width:70px" align="center">13</td>
<td style="width:70px" align="center">1</td>
<td style="width:70px" align="center">14</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Delistings/Closures for Month</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
</tr>
<tr>
<td style="width:250px" align="left">Net Change for Month</td>
<td style="width:70px" align="center">+13</td>
<td style="width:70px" align="center">+1</td>
<td style="width:70px" align="center">+13</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">New Introductions YTD</td>
<td style="width:70px" align="center">33</td>
<td style="width:70px" align="center">3</td>
<td style="width:70px" align="center">36</td>
</tr>
<tr>
<td style="width:250px" align="left">Delistings/Closures YTD</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Net Change YTD</td>
<td style="width:70px" align="center">+33</td>
<td style="width:70px" align="center">+3</td>
<td style="width:70px" align="center">+36</td>
</tr>
<tr>
<td style="width:250px" align="left">Actively-Managed (qty)</td>
<td style="width:70px" align="center">33</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">33</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Assets Under Mgmt ($ billion)</td>
<td style="width:70px" align="center">$1,039.8</td>
<td style="width:70px" align="center">$16.0</td>
<td style="width:70px" align="center">$1,055.8</td>
</tr>
<tr>
<td style="width:250px" align="left">% Change in Assets</td>
<td style="width:70px" align="center">+3.4%</td>
<td style="width:70px" align="center">+8.8%</td>
<td style="width:70px" align="center">+3.5%</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Monthly $ Volume ($ billion)</td>
<td style="width:70px" align="center">$1,197</td>
<td style="width:70px" align="center">$18.9</td>
<td style="width:70px" align="center">$1,216</td>
</tr>
<tr>
<td style="width:250px" align="left">% Change in Monthly $ Volume</td>
<td style="width:70px" align="center">-3.2%</td>
<td style="width:70px" align="center">+3.8%</td>
<td style="width:70px" align="center">-3.1%</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Avg Daily $ Volume > $1 Billion</td>
<td style="width:70px" align="center">8</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">8</td>
</tr>
<tr>
<td style="width:250px" align="left">Avg Daily $ Volume > $100 Million</td>
<td style="width:70px" align="center">68</td>
<td style="width:70px" align="center">1</td>
<td style="width:70px" align="center">69</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Avg Daily $ Volume > $10 Million</td>
<td style="width:70px" align="center">228</td>
<td style="width:70px" align="center">15</td>
<td style="width:70px" align="center">243</td>
</tr>
</table>

 Data sources:  AUM from National Stock Exchange, daily prices and volume of individual ETPs from Norgate Premium Data, fund counts and all other information compiled by Invest With An Edge.
New products launched in February (in chronological order):
<ol>
<li>Teucrium Natural Gas Fund (NAGS) (<a href="http://investwithanedge.com/teucrium-natural-gas-fund-nags-now-trading" target="_blank">Teucrium Natural Gas Fund Now Trading</a>)</li>
<li>Global X FTSE Andean 40 ETF (<a class="ticker" href="/stock/and#">AND</a>) (<a href="http://investwithanedge.com/get-a-head-start-on-chile-colombia-peru-exchange-merger-with-new-global-x-etf" target="_blank">Get A Head Start On Chile-Colombia-Peru Exchange Merger With New Global X ETF</a>)</li>
<li>ProShares UltraShort TIPS (TPS) (<a href="http://investwithanedge.com/shorting-inflation-protection-with-tps" target="_blank">Shorting Inflation Protection with TPS</a>)</li>
<li>Global X FTSE ASEAN 40 ETF (<a class="ticker" href="/stock/asea#">ASEA</a>) (<a href="http://investwithanedge.com/new-etf-targets-5-of-10-asean-countries" target="_blank">New ETF Targets 5 of 10 ASEAN Countries</a>)</li>
<li>First Trust NASDAQ CEA Smartphone Index Fund (<a class="ticker" href="/stock/fone#">FONE</a>) (<a href="http://investwithanedge.com/etf-fone-home" target="_blank">ETF FONE Home</a>)</li>
<li>RBS Gold Trendpilot ETN (TBAR) (<a href="http://investwithanedge.com/tbar-captures-long-term-gold-bar-trends" target="_blank">TBAR Captures Long-Term Gold Bar Trends</a>)</li>
<li>Teucrium WTI Crude Oil Fund (CRUD) (<a href="http://investwithanedge.com/crud-another-way-to-buy-12-months-of-oil-contango" target="_blank">Another Way To Buy 12 Months of Oil Contango</a>)</li>
<li>SPDR Barclays Capital Emerging Markets Local Bond ETF (EBND) (<a href="http://investwithanedge.com/ebnd-ediv-two-new-spdr-emerging-market-etfs" target="_blank">Two New SPDR Emerging Market ETFs</a>)</li>
<li>SPDR S&amp;P Emerging Markets Dividend ETF (EDIV)</li>
<li>FactorShares 2X: S&amp;P500 Bull/TBond Bear (<a class="ticker" href="/stock/fse#">FSE</a>) (<a href="http://investwithanedge.com/factorshares-introduces-spread-trading-in-etf-wrapper" target="_blank">FactorShares Introduces Spread Trading In ETF Wrapper</a>)</li>
<li>FactorShares 2X: TBond Bull/S&amp;P500 Bear (<a class="ticker" href="/stock/fsa#">FSA</a>)</li>
<li>FactorShares 2X: S&amp;P500 Bull/USD Bear (<a class="ticker" href="/stock/fsu#">FSU</a>)</li>
<li>FactorShares 2X: Oil Bull/S&amp;P500 Bear (<a class="ticker" href="/stock/fol#">FOL</a>)</li>
<li>FactorShares 2X: Gold Bull/S&amp;P500 Bear (<a class="ticker" href="/stock/fsg#">FSG</a>)</li>
</ol>
Product closures/delistings in February:
none
Product changes in February:
<ol>
<li>Market Vectors Indonesia (<a class="ticker" href="/stock/idx#">IDX</a>) split 3:1 effective 2/1/11.</li>
<li>Eight PowerShares DB commodity ETFs changed their underlying indexes from “Deutsche Bank Liquid Commodity Index – Optimum Yield” indexes to “DBIQ Optimum Yield” indexes effective 2/2/11.</li>
<li>Deutsche Bank suspended further creations of the PowerShares DB Agriculture Double Long ETN (<a class="ticker" href="/stock/dag#">DAG</a>) effectively making DAG a closed-end fund as of 2/15/11.</li>
<li><a href="http://www.onefund.com/press/default.asp" target="_blank">Russell Investments acquired U.S. One</a> and became the manager of the One Fund ETF (ONEF) after shareholder approval in mid-February.</li>
<li>Five Direxion ETFs (FAZ, BGZ, MWN, DPK, and SOXS) underwent 1-for-5 reverse splits effective 2/24/11.</li>
<li>Three ProShares ETFs (TQQQ, URTY, and EMDD) split 2:1 and one (<a class="ticker" href="/stock/upro#">UPRO</a>) split 3:1 effective 2/25/11.</li>
<li>13 ProShares ETFs (EPV, MZZ, REW, SDD, SDK, SIJ, SJH, SJL, SKF, SMK, TWM, UCO, and ZSL) underwent 1-for-4 reverse splits effective 2/25/11.</li>
<li>Seven ProShares ETFs (CMD, JPX, QID, SCO, SKK, SSG, and TLL) underwent 1-for-5 reverse splits effective 2/25/11.</li>
<li>Vanguard changed names and underlying indexes on four of its ETFs effective 2/25/11.  The new names are Vanguard MSCI EAFE ETF (<a class="ticker" href="/stock/vea#">VEA</a>), Vanguard MSCI Emerging Markets ETF (<a class="ticker" href="/stock/vwo#">VWO</a>), Vanguard MSCI Pacific ETF (<a class="ticker" href="/stock/vpl#">VPL</a>), and Vanguard MSCI Europe ETF (<a class="ticker" href="/stock/vgk#">VGK</a>).</li>
</ol>
Announced Product Changes for Coming Months:
<ol>
<li>Effective 3/3/11, Global X will rename two funds.  The new names are <a href="http://investwithanedge.com/new-colombia-etf-launched-today-gxg" target="_blank">Global X FTSE Colombia 20 ETF</a> (<a class="ticker" href="/stock/gxg#">GXG</a>) and <a href="http://investwithanedge.com/global-x-launches-nordic-region-etf-gxf" target="_blank">Global X FTSE Nordic Region ETF</a> (<a class="ticker" href="/stock/gxf#">GXF</a>).</li>
<li>The Egyptian Stock Exchange is now expected to reopen March 7.  However, the reopening has been postponed multiple times.  After it reopens, Van Eck plans to allow new share creation for Market Vectors Egypt (<a class="ticker" href="/stock/egpt#">EGPT</a>) to resume.  The <a href="http://investwithanedge.com/the-impending-collapse-of-the-30-premium-for-egpt" target="_blank">hefty premium for EGPT should collapse</a> a day or two later.</li>
<li>Effective 3/9/11, the United States Natural Gas Fund (<a class="ticker" href="/stock/ung#">UNG</a>) will reverse split 1-for-2.</li>
<li>PowerShares and the SPDR Trust settled their <a href="http://investwithanedge.com/spdr-files-frivolous-suit-on-invesco-over-etf-ticker-symbols" target="_blank">lawsuit over ticker symbols</a>.  PowerShares will change the symbols for their <a href="http://investwithanedge.com/powershares-small-cap-sector-etfs-hit-the-tape" target="_blank">small cap sector suite</a> by the end of March:  XLYS changes to PSCD, XLPS to PSCC, XLES to PSCE, XLFS to PSCF, XLVS to PSCH, XLIS to PSCI, XLKS to PSCT, XLBS to PSCM, and XLUS to PSCU.</li>
</ol>
Previous monthly ETF statistics reports are available <a href="http://investwithanedge.com/category/etf-statistics" target="_blank">here</a>.
Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
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EGPT

FONE

UPRO

ETF Stats for February 2011: Exactly 1,000 ETFs

In the latest move in the growing ETF price war, Vanguard, the third-largest U.S. ETF issuer, announced it is paring fees on six of its ETFs, including the popular Vanguard Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>).
VWO, the world's largest emerging markets ETF by assets, will see its expense ratio reduced to 0.22% from 0.27%, making it even cheaper than the Schwab Emerging Markets Equity ETF (NYSE: SCHE), which features an expense ratio of 0.25%. VWO has been able to steadily pilfer assets from the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) by offering lower fees.
The Vanguard MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>) will see its expense cut to 0.14% from 0.16% as will the Vanguard MSCI European ETF (NYSE: <a class="ticker" href="/stock/vgk#NYSE">VGK</a>). Vanguard's Total World Stock ETF (NYSE: <a class="ticker" href="/stock/vt#NYSE">VT</a>) will see its fees lowered to 0.25% from 0.3%. The FTSE All-World ex-U.S. Index (NYSE: <a class="ticker" href="/stock/veu#NYSE">VEU</a>) goes to 0.22% from 0.25% and the FTSE All-World ex-U.S. Small Cap (NYSE: <a class="ticker" href="/stock/vss#NYSE">VSS</a>) will have an expense ratio of 0.33% down from 0.4%.
The new expense ratio for VSS also undercuts the comparable Schwab fund, the Schwab International Small Cap Equity ETF (NYSE: SCHC), which has expenses of 0.35%.
Vanguard had total ETF assets of $154.56 billion as of Feb. 24, according to data compiled by IndexUniverse.com.

Vanguard Lowers Fees On Six ETFs

Japan has been exceeding growth expectations, but investors should be aware of where that growth came from.

Be Wary of ETFs Lifted by Japan's GDP Revision

<a href="http://www.etftutor.com">Courtesy of Kevin Grewal, Publisher, ETF Tutor</a>
Japan witnessed its fourth consecutive quarter of economic growth enabling it to retain its position as the world's second largest economy after beating GDP expectations impacting the iShares MSCI Japan Index (<a class="ticker" href="/stock/ewj#">EWJ</a>), the iShares MSCI Japan Small Cap Index Fund (SCP) and the Vanguard Pacific Stock ETF (<a class="ticker" href="/stock/vpl#">VPL</a>).
The Japanese economy expanded by 4.5 percent in the third quarter of the year, exceeding analyst expectations by 0.6 percent and eating away at the nation's massive deflationary gap.  Furthermore, this expansion has led to Japan's Minister of Economic and Fiscal Policy to peg an estimated annual growth for the year at around 2.6 percent.
Although Japan has been exceeding growth expectations, it is important to take this outperformance with a grain of salt.  The aforementioned economic growth was primarily driven by increases in private sector inventories which further suggests that now inventories have been replenished, production cuts are likely to prevail.  Another driver behind increased GDP was an increase in domestic consumption driven by deadlines for subsidies for environmentally friendly vehicles and other economy boosting measures, which are expected to expire and have a negative effect on future consumption.  In fact, these trends are already starting to prevail as unemployment rates have started to worsen, industrial output has started to decline, retail spending has started to taper off and exports are slowing down.
To put further strains on Japan's economic outlook, corporations are starting to be more cautious in regards to investing and policymakers are hinting at increasing the consumption tax rate to procure money for the nation's aging population.
At the end of the day, when it comes to economic growth, Japan faces an uphill battle and is likely to lose its place as the world's second largest economy sooner rather than later.
<ul>
<li>iShares MSCI Japan Index (<a class="ticker" href="/stock/ewj#">EWJ</a>), which allocates nearly 19 percent of its assets to the consumer discretionary sector.</li>
<li>iShares MSCI Japan Small Cap Index Fund (SCP), allocates nearly 20.75 percent of its assets to consumer discretionary and is more correlated to the consumer sentiment in Japan than ETFs which track and hold large-cap stocks.</li>
<li>Vanguard Pacific Stock ETF (<a class="ticker" href="/stock/vpl#">VPL</a>), which allocates more than 60 percent of its assets to Japan.</li>
</ul>
Disclosure: No Positions
<a href="http://www.etftutor.com/">Courtesy of Kevin Grewal, Publisher, ETF Tutor</a>
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Take Caution of GDP Boost In Japanese ETFs (EWJ, SCP, VPL)

Here is the ETF Professor's ETF Watch List for Monday October 25, 2010. 
Play earnings from Yanzhou Coal (NYSE: <a class="ticker" href="/stock/yzc#NYSE">YZC</a>) with the Market Vectors Coal ETF (NYSE: <a class="ticker" href="/stock/kol#NYSE">KOL</a>).
After losing almost 4.5% on Friday, iPath S&amp;P 500 VIX Short-Term Futures ETN (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>) should be one to watch.
Trade oil with the ProShares Ultra DJ-UBS Crude Oil (NYSE: <a class="ticker" href="/stock/uco#NYSE">UCO</a>).
Emerging markets plays of the day: ProShares UltraShort FTSE/Xinhua China (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>), iShares MSCI Turkey Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>) and the Vanguard Pacific Stock ETF (NYSE: <a class="ticker" href="/stock/vpl#NYSE">VPL</a>).
Forex play of the day: WisdomTree Dreyfus Chinese Yuan ETF (NYSE: <a class="ticker" href="/stock/cyb#NYSE">CYB</a>).
Bond play of the day: ProShares Short 20+ Year Treasury (NYSE: <a class="ticker" href="/stock/tbf#NYSE">TBF</a>).

iShares MSCI Turkey Investable Market Index Fund

ETFs To Watch October 25, 2010 (FXP, VXX, CYB, TUR)

ADRD

PowerShares Listed Private Equity Portfolio

QQQQ

Merrill Lynch Retail HOLDRS Trust due 12/31/41

Alchemy Real-Time Stream From Monday, 10/11/10

Global ETF Market Facts: 3 Things To Know From Q4 2023

Worldwide Manufacturing Confidence Improves As Factories Shrug Off Red Sea Concerns

Dealmaking Outlook: Unsettled, With Bright Spots

Asia-Pacific Is Not Just China

EM Central Banks: More Easing In The Cards?

Global Economic Outlook: Growth Prospects Brighten, InﬂAtion Outlook More Cloudy

Worldwide Manufacturing Returns To Growth

Emerging Market Insights - Semiconductor Sector Soars

Global Economic Outlook: March 2024

This week's financial landscape was marked by a blend of bullish sentiment in specific sectors and commodities, countered by volatility in the cryptocurrency market and cautiousness in the real estate and health sectors.