Editor’s Note: The following is a roundup of articles about ETFs, index funds and indexes by sources other than IndexUniverse.com. Comments and suggestions are welcome through email at: <!–
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Bad Bets: Illiquid ETFs

Ian Salisbury of Dow Jones Newswires is one of the best fund reporters in the business. In his latest piece appearing in the Wall Street Journal, he takes a survey of 300 recent trades in 10 lightly traded ETFs.

Salisbury writes that it wasn’t unusual to find prices off by 5%. In some cases, those spreads were more than 10%. Here’s the story’s lead: “Exchange-traded funds promise to let investors trade baskets of stocks at predictable prices throughout the day. But some thinly traded ETFs have been falling short of that goal.”

At least online, no accompanying chart or graphics detail which 10 ETFs he’s comparing. And later, Salisbury writes: “The 10 ETFs selected weren’t randomly chosen but represent a sampling of funds that embody this trend. Investors that stick to more established, heavily traded ETFs can expect better results.”

You can read the full report here.

Exchanges Slow As Hedge Funds Decline

Whether you’re an options fan or not, you might enjoy this original piece of reporting by Bloomberg’s Jeff Kearns.

He takes the initiative to crunch some numbers on his own, resulting in a unique perspective of how options exchanges are showing big slowdowns as lots of money sits in cash and other safe havens.

Kearns also ties slowdowns in activity to stats from Hedge Fund Research. That data shows trading at the exchanges dropped as hedge funds were suffering their worst back- to-back monthly declines in September and October. You can catch the story here.

Preferred Stock ETFs

While markets continue to fall, one area that advisors have been talking about lately is preferred stocks. Advisor and newsletter writer Don Dion takes a look at a pair of ETFs focusing on this part of the market—the iShares S&P U.S. Preferred Stock Index Fund (NYSE: PFF) and the PowerShares Financial Preferred (AMEX: PGF).

Not only are both beating the broader market by double-digits this year, each sport yields of better-than 10%, observes Dion. One question looms here, though. Why no mention of PowerShares Preferred (AMEX: PGX)?

You can read his comparison of the two ETFs here.

Plotting ETF Volume Vs. Index Volume

On Barry Ritholtz’s The Big Picture blog, there’s an interesting short piece with a chart comparing trading activity of ETFs compared to the underlying index.

The author, Michael Panzner, writes: “As the market has sold off since January, exchange-traded fund volumes have outpaced those of the underlying indexes, suggesting that ETFs are increasingly becoming the hedging and speculative mechanisms of choice in the U.S. equity market.”

You can read it here.

Emerging Markets Indexes Tumble

Russia’s Micex Index fell almost 9% and the MSCI Emerging Markets Index dropped 4.6% on Thursday on fears that slumping oil prices will cripple developing economies around the world, according to Bloomberg News.

As oil slid to $52 a barrel, Russia moved to cut corporate taxes. (Russian indexes have lost the most of any major markets this year). You can read more about yesterday’s turmoil in emerging markets here.

Drink Your Coffee First

If you haven’t had your morning cup of coffee, this next one probably isn’t a good idea to take a gander at just yet.

It’s a piece on Seeking Alpha full of doom and gloom preparing investors for Friday’s market action. But more than David Fry’s analysis, the bottom of the article includes some interesting market data of various indexes.

Drink up! Here you go.

REITs Take Fall

Shocks in commercial REIT markets are rippling through exchange-traded funds, notes David Gaffen in the Wall Street Journal’s Marketbeat blog.

Gaffen points to widening spreads in credit default swaps on commercial real estate investment trusts. Such swaps serve as private insurance contracts to protect against corporate bankruptcies or other severe financial problems.

Impacted have been funds such as the SPDR Dow Jones Wilshire REIT ETF (NYSE: RWR). You can read the story here.

Last 5 posts by IndexUniverse Staff

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• Jan. 7: The Best ETF Articles In The National Media - January 7th, 2009
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• Jan. 6: The Best ETF Articles In The National Media - January 6th, 2009