Leading academics and index experts examine how investors should handle the falling dollar.

 

The Death Of The Dollar?, the November/December 2009 issue of the Journal Of Indexes, focuses on currency and related strategies, with contributions from Invesco PowerShares' Bruce Bond, the International Securities Exchange's Steve Meizinger and Marc Chandler and Jeffrey McCarthy of Brown Brothers Harriman, not to mention a currency primer by Index Publications' own Dave Nadig, Matt Hougan and Lara Crigger.

Other articles in the publication include a look at how EMH weathered the financial crisis of 2008 by David Blitzer, the first installment of a three-part series on improving fund evaluation techniques by Gary Gastineau and a study from David Blanchett on how to figure out the "passive" portion of an actively managed portfolio. And let's not forget the ETF crossword puzzle on the back page!

You can view the entire issue

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Here are the global implications of Schwab entering the U.S. ETF market, and an explanation about why ETFs are a game-changer.

I remember some years ago I sat on a panel at the Schwab conference with Bruce Bond and Tony Rochte. In the run-up to the conference, there was a big hubbub about Schwab saying that they were blocking ETF people out of the conference altogether. There was some kind of a skirmish, and then they ended up letting the ETF riffraff in.

But it's been clear for a long time that the big brokers and institutional players are not all that excited about the idea of pushing assets (and an annually recurring revenue stream in the form of an expense ratio) to their (sometimes) competition for the price of a stock commission.

THAT is the reason that Goldman and Morgan announced the "Source" ETF venture (no recent

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Finally something Matt Hougan and I can agree on…

I can’t believe it, but Matt and I are actually on the same
page.  Just when you felt like there was no other ETF launch that could come out and feel like it hit the spot…I’m always a bit embarrassed when I’m a market
timer, but in this instance, I really am one. 
I’m an indexer at heart, but deep down inside I’m a contrarian. So I
love the current market environment as an investor, because it makes me feel
good about my rebalancing, and it allows me to do a bit of activist work on the
fringes.

And I LOVE this PowerShares launch.  I really do. 
I am almost ashamed to admit it as an index investor, but I absolutely
agree with Bruce Bond’s quote that the mortgage backed

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Maybe, if it’s one of the new mortgage-backed security ETFs coming from PowerShares.

These have to be the most exciting ETF filings to hit the Securities and Exchange Commission in years.

In case you missed the story, PowerShares filed to launch two new ETFs targeting the MBS market. Unlike other MBS ETFs, these products will not buy mortgages underwritten by federal agencies like Fannie Mae and Ginnie Mae. Those mortgages come with either an explicit or implicit federal guarantee, and are as boring as dirt.

Instead, the PowerShares ETFs will buy so-called “non-agency securities”: MBSs that don’t have the backing of the federal government. These are the securities that we read about in the papers; the ones that are illiquid and difficult to price, and that are causing banks so many problems.

The PowerShares ETFs will be available in two flavors: Prime, focused on mortgages backed by good credit; and

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PowerShares boosts its leadership in active bond ETFs with two more to go with last April's entry.

PowerShares says it has filed to launch a pair of new actively managed exchange-traded funds focusing on non-agency residential mortgage-backed securities.

The two proposed funds are the Prime Non-Agency RMBS Opportunity Fund and the Alt-A Non-Agency RMBS Opportunity Fund.

The types of fixed-income both funds will hold come from non-subprime areas of the RMBS market. Credit requirements for prime loans are the most difficult to qualify for and Alt-A somewhat less.  

As non-agency loans, the ETFs will be investing in securities that won't qualify as collateral for securities that are issued by Ginnie Mae, Fannie Mae or Freddie Mac. "We believe that various economic factors have converged to push the prices of many Prime and Alt-A residential mortgage-backed securities well below their fundamental values,” said Bruce Bond, chief executive at PowerShares, in a statement on Wednesday. The new ETFs will no doubt benefit ...

ETFs using fundamental rankings to weigth portfolios will cut expense ratios to 0.39% per year on Nov. 1. 

 

PowerShares announced late Friday that it plans to slash expense ratios on its 11 exchange-traded funds that use Research Affiliates' fundamental indexing approach.

The ETFs now have expense ratios capped at 0.60%, according to a PowerShares spokesman. Those fees will be reduced to a uniform 0.39% on Nov. 1.

The moves come after similar moves by a range of ETF providers this year, including the Vanguard Group and XShares Advisors with its consolidated line-up of HealthShares funds. The price cuts also come as total assets in ETFs continue to grow -- in September, those levels reached $587.8 billion, up from last September's $562.6 billion, according to data from the National Stock Exchange. (See story here.)

But consolidation is showing up in the industry. With that comes pressure on smaller providers. A general rule-of-thumb used by industry

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