Institutional Investors Shifting To Index Funds

In an article titled: "Active Managers Get Cold Shoulder," Craig Karmin writes in Monday's Wall Street Journal that big institutional managers are increasingly shifting to index funds.

It quotes a director of the $9 billion Illinois State Board of Investment as saying that "active managers have not given us the added performance in a down market that we hoped for."

You can read the story here.

SEC Investigating Dark Pools

In an interesting story from the Financial Times, the Securities and Exchange Commission is reportedly looking into so-called "dark pools." In an interview with Mary Schapiro, the SEC's chairwoman, the paper is reporting that the trading systems set up for large investors to block trade with little outside transparency is a source of real concern for U.S. regulators.

You can read the story here.

Hedge Funds Redux?

In a look at the growth in exchange-traded funds using hedging strategies, MarketWatch's

I've gotten a few questions from readers and colleagues about what sources I turn to for information about the markets, exchange-traded funds and related topics.

The list is long and varied, and ebbs and flows over time. But here are some of the sources (public, private and otherwise) that I turn to in my day-to-day reading. I'm sure I'm leaving out quite a few sites, but this at least is a partial list.

NATIONAL PUBLICATIONS

IndexUniverse.com and IndexUniverse.eu: It goes without saying that IndexUniverse.com and IndexUniverse.eu are the best sites on the Web for information about ETFs and how they are used in portfolios.

IndexUniverse.com

IndexUniverse.eu

Slate/The Big Money: Those two Web sites aside, I start my day at Slate.com, and its sister finance site The Big Money. I find the daily news summary (and weekly magazine summaries) the best meta-journalism on the Web. They offer

BGI Sale Would Provide Big Boost To BlackRock, BNY Mellon

As negotiations continue on the sale of Barclays Global Investors, the two most widely discussed potential bidders—BlackRock Inc. and the Bank of New York Mellon—stand to gain a large immediate boost in assets if either one wins.

This Bloomberg News analysis pinpoints just how big each would become in terms of assets and the potential impact on the exchange-traded funds marketplace.

You can read the story here.

Arnott Article On Bonds Stirring Debate

In today's Wall Street Journal, John Spence explores the debate stirred by Rob Arnott in his recent Journal of Indexes story about the long-term benefits of bonds as opposed to stocks.

The story, which originally appeared at MarketWatch.com, talks to others who take the opposing side.

If you're a subscriber to the WSJ, that story can be found here. If you're not, a free version at

There's been plenty of speculation on the sale of iShares. Finally, here's the truth.

We've got Matt Hougan and John Spence and Chuck Jaffe and the Wall Street Journal—and now even Murray Coleman all jumping in and speculating on what's going to happen with iShares. The truth is that none of them know—and even the people over at BGI probably don't know. But I do.

I just don't see it happening. Or rather, I do think that an eventual separation has become exponentially more likely ... I just don't think it happens immediately. 

First of all, let me point you to the best blog on the topic yet. It's Paul Amery's blog from over on the http://www.indexuniverse.eu/ site. Here are the Cliff's NotesTM of what Paul covered in his blog that few others have hit upon:

1. Barclays needs to tell

More On BGI's Fate

The Wall Street Journal this morning had more on the surprise move by the parent of Barclays Global Investors to hire an investment banker to shop the industry's biggest ETF provider. 

You can read the story here.

Closing Of MarketGraders Will Make It 17 This Year

In an interesting blog at MarketWatch.com about the closing of SPA's MarketGrader ETFs, John Spence notes an analyst report that puts the number of announced closings for ETFs at 17 so far in 2009. 

You can read the story here.

The Name Game Begins

In another blog, Spence does a roundup of stories speculating on potential suitors for BGI.

Even though MarketWatch is part of Dow Jones, he provides links to stories by Bloomberg and Morningstar on the same topic.

You can read the story here.

Top-Rated Commodity ETFs

In this analysis by TheStreet.com, Richard Widows takes a look at how some parts of

A lot of people called me yesterday to ask who might buy iShares. The short answer is, I don't know. But like everyone, I can't help but speculate.

I know my more serious colleagues—Jim Wiandt and Murray Coleman—will accuse me of falling short of the desired journalistic reserve. To that, I plead guilty. The list of potential suitors I lay out below is rank speculation, based on nothing more than my intuition about the industry and a few silly hunches.

But the fact that Barclays is shopping iShares around is big news in the ETF industry. There are important ramifications. And besides, this is a blog, and if I can't speculate here ...  

So let's get it out of the way. Here is my list of potential suitors. This is borrowed from my own speculation, and that reported by John Spence and others in the media yesterday:

Gold Going Mainstream?

In this Wall Street Journal feature,  Gregory Zuckerman notes that recent filings reveal some large investment firms catering to the wealthy -- which used to shun gold -- are now buying the yellow metal. 

According to the article, they've become some of the biggest holders in the SPDR Gold Shares (NYSE: GLD). 

You can read the story here.

Tyco Falls After Removal From S&P 500

Once high-flying Tyco is moving its headquarters as removal from the S&P 500 sent its shares down more at the end of last week.

You can read a brief Associated Press story here.

Arrival Of Pimco, Schwab Could Boost ETFs

In this piece for MarketWatch.com, John Spence looks at how the planned entrance of Pimco and Schwab into the exchange-traded funds marketplace could boost the investment vehicle's popularity.

You can read the story here.

Twittering Online For Stocks

Veteran technology reporter Brian Deagon has

Japanese Official: No Plan To Buy ETFs

The Japanese foreign minister said on Tuesday that government leaders have no plans to prop-up their ailing economy by using purchases of exchange-traded funds as a stimulus.

You can read the evolving story, as reported by Reuters, here. 

ETFs, Index Mutual Funds Advance

In this recap of 2008 by Sam Mamudi of MarketWatch.com,  the money flow into exchange-traded funds and index mutual funds last year is contrasted with heavy redemptions in actively managed mutual funds. 

You can read the story, which also appears in the sister Wall Street Journal, here.  

Catching A Falling Knife

The Wall Street Journal takes a look at value investing and talks to market strategists about the plusses and minuses of such a tack. 

You can read the story here.

A Broad Approach To ETFs

Here's a general primer for novice investors on the advantages of exchange-traded funds by MarketWatch's

Oil ETF Grows Too Big?

The enormous growth of the U.S. Oil Fund (NYSE: USO) since the second half of last year has made it difficult for the fund to hide its monthly automatic rollover in front-month contracts, according to this Dow Jones News Service story.

On Friday, it rolled over such a huge number that analysts are blaming it for influencing prices.

You can read the story here.

Dividend Focused ETFs

John Spence of MarketWatch takes a survey of ETFs that focus on dividends on the market.

You can read the story here.

More On Jim Cramer’s Record

Considering you might’ve read on these pages last September Jim Wiandt’s blog, “Why Jim Cramer’s A Moron,” how could we not bring the latest Barron’s cover story?

It’s titled “Cramer’s Star Outshines His Stock Picks.”  (Seeking Alpha has an interesting commentary about how this story differs from the magazine’s last review of

…

Corporate Bond Markets Still Tight

Gus Sauter of Vanguard is one of several fund managers to tell MarketWatch’s Sam Mamudi they’re still finding it tough to buy corporate bonds today as liquidity remains a problem. 

You can read the story here.

Tracking Error Remains Low In 2008

A new Morgan Stanley report on tracking error found that most exchange-traded funds scored relatively low numbers despite the market’s increased volatility, reports John Spence in his blog at MarketWatch. 

You can read the story here.

Launches Vs. Closings

At Investor’s Business Daily, markets reporter Trang Ho recaps closings and launches of ETFs last year and looks at what that might mean in 2009.

You can read the story here.