Spain Bond Auction Helps Bolster ETFs

ETF TIMES: Last week's successful bond auctions provided a fillip for a number of financials and Spanish ETFs

Morningstar ETF Analysts 19 January, 2011 | 10:40AM
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iShares has amended the names of two of its ETFs. The iShares FTSE/Xinhua China 25 ETF has been re-named the iShares FTSE China 25 ETF (IDFX) as index provider FTSE has acquired index provider Xinhua. The iShares Markit iBoxx Euro High Yield ETF has been re-named the iShares Markit iBoxx Euro High Yield Bond ETF (SHYG) so that its label more closely matches the rest of the iShares bond fund range. It is important to note that only the products' names are changed; their construction and benchmark indices remain the same.

Best and Worst Performers for the Week of January 10-14
The top performing exchange-traded products (ETPs) for the week were those that track the performance of Spanish equities and the European banking sector. In both cases, the underlying reason for the strong week was the successful auction of five-year bonds by the Spanish government, which managed to issue the bonds at a yield lower than expectations. The announcement by German Chancellor Angela Merkel that she would do "whatever is needed to support the euro" also helped.

ETPs tracking the performance of Indian equities had a poor week, as inflation in the country remains high despite the central bank's efforts to stem the problem with a 200 basis points increase in interest rates. The rate hike has heightened concerns that the Indian economy may be entering a 'high-inflation, slow-growth' phase. A pair of ETFs tracking the performance of a basket of gold-mining companies also had poor returns on the week. Weakness in the price of gold stemmed from indications that many central banks are beginning to take the risks of inflation more seriously and played a role in the decline in the price of mining shares.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Morningstar ETF Analysts  research hundreds of ETFs available to European investors. The Morningstar Rating for ETFs is based on a risk-adjusted performance measure.

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