New Listings
There are more S&P 500 ETFs to choose from after this past week. Both Source and Credit Suisse have launched their own ETFs tracking the S&P 500 index of large US companies for annual fees of 0.20% and 0.28%, respectively. Source’s offering trades in London, while Credit Suisse’s ETF is available on the Deutsche Borse. Both ETFs are non-distributing (meaning they will hold on to dividends rather than disbursing them to shareholders) and trade in US dollars. The S&P 500 is a good choice to diversify equity portfolios that are heavily weighted towards the European market.
Lyxor has launched a dividend futures ETF in London. The ETF tracks the dividends paid by all companies comprising the EURO STOXX 50 through positions in futures contracts. While there are already dividend ETFs that own the underlying stocks, this ETF will be less tied to the overall market and can be used by investors as a hedge against inflation as dividend yields tend to be correlated with inflation. The fund charges a 0.70% annual fee and is available in British pounds and euros.
db x-trackers has cross-listed three equity index ETFs to the London Stock Exchange. The three ETFs were previously launched in Germany. They comprise two European real-estate ETFs (covering all of developed Europe for a 0.40% annual fee, or the eurozone economies for 0.35% annually), and the MSCI Mexico TRN for 0.65% annually.
Best and Worst Performers for the week of May 24 – 28
Among the top performers for the week were metal commodities, which retraced their steps after a poor performance in the prior week. Palladium had the largest gains as last week’s losses appeared to be a temporary blip on the strong trend the metal has formed year-to-date. Also benefitting from the rise in metal prices were the equity markets of commodity-oriented economies like Russia and South Africa.
Sugar prices gave up their strong gains from the previous week as Brazil--the number one exporter of the commodity--and India both appear to be set for large growth in supply, making up for any potential shortfalls from Thailand. The eurozone’s response to the debt problems of its members appears to have far-ranging effects, as the likely reduced demand for oil has hurt Middle East stock markets, particularly Kuwait and United Arab Emirates. However, the euro was able to post a bit of a bounce back this week against the British pound and the Norwegian krone.