ETF Radar Magazine (Issue May 2011) North American Version

etfRadar etf

Issue No. 9 ISSN 2150-9166 North American Edition

SM

May 2011

Magazine Index Investor

S&P 500 Sector Map Tactical Portfolio Update ETF of the Month THE HOTSPOTS AT A GLANCE

Rankings The Global ETF Landscape At A Glance Spotlight No swap, no cry?

New regulator concerns People Tom Anderson State Street Global Advisors

Feature

Chasing Yield in ETFs www.etf-radar.com

Fast Lane

Contents Issue May 2011 Global Summary

3

Industry Highlights Global Round-Up Top20 Global Index Provider Hot Product Debuts Upcoming Events Number Cruncher

Index Investor

5

S&P 500 Sector Map Tactical Portfolio Update ETF of the Month

Feature

7

10

Spotlight No swap, no cry?

New regulator concerns

People

11

Tom Anderson, State Street Global Advisors

Rankings

13

Assets under Management Change in ADV Change in AuM Best-Performer Worst-Performer

Chasing Yield in ETFs

Index Companies and People Absa (pg. 3) Barclays (pg. 4) Birla Sun Life (pg. 3) Blau, Johnatan (pg. 8) Burke, Kevin (pg. 4) Credit Suisse (pg. 8) Deutsche Bank (pg. 4) ETF Securities (pg. 3) First Trust Advisors (pg. 3) Friends Provident (pg. 3) FSB (pg. 9) Guggenheim (pg. 8) IMF (pg. 9)

iShares (pg. 8,10) Laidlaw, Robyn (pg. 3) Lyxor (pg. 10) Montanari, Marco (pg. 4) Peritus AM (pg. 8) PowerShares (pg. 8) SDPR (pg. 8) Société Générale (pg. 10) Source (pg. 4) TD Ameritrade (pg. 3) Van Eck (pg 3) Vanguard (pg. 3) Waqas Samad (pg. 4)

Get In Touch

Dear Reader, According to the latest research figures, the ETF industry is definitely growing much faster than the mutual fund industry especially in the US. The success of ETFs is based on their clear, simple and low-cost DNA. But there are some signs that this heritage is in danger. Today there is much confusion among investors, as there are many different innovations, especially all the leveraged and inverse products as well as the synthetic replicated ETFs. Maybe too many.

The latest comments from the Financial Stability Board and other regulatory bodies show it clear: The industry has to accelerate the initiatives towards more transparency and try to limit the complexity of the products. At some stage investors would step away from some ETFs and ETPs because they do not really understand what they are buying and eventually face more risks than buying traditional (known) products such as stocks or bonds.

The Industry's mission towards clarity and transparency has to be started now!

Enjoy reading and let us know your thoughts.

NORTH AMERICA americas@etf-radar.com Naples (FL) +1 239 384 6090 EUROPE, MIDDLE EAST and ASIA-PACIFIC europe.asiapacific@etf-radar.com London +44 203 519 1179 ETF RADAR IS A PRIVATE AND INDEPENDENT INFORMATION PROVIDER. NO STATEMENT IN THIS ISSUE IS TO BE CONSTRUED AS A RECOMMENDATION TO BUY OR SELL SECURITIES OR TO PROVIDE INVESTMENT ADVICE. PLEASE SEE OUR DISCLAIMER PAGE FOR FURTHER INFORMATION.

Silvan Schelling Head of Relationship Management PS: This month we celebrate our 2nd birthday! Since exactly two years the ETF Radar Magazine informs and educates meanwhile 12'100 readers worldwide.

© 2009-2011 ETF Radar Global Investor Services. All rights reserved.

> connect@etf-radar.com

For all subscription enquiries, thoughts or general questions please contact us directly by email:

ETF Radar Magazine | Issue May 2011

2

Global Summary

ted leec Fo

S

Industry Highlights

u rf

ts en Ev

nt ve e ll

i ls ta de

p

the isit v se lea

w on w tion c e nt s eve

radar. w.etf-

com

TORONTO Canada Cup of Invest. Mgnt.

07–08 June 2011 InterContinental

LAS VEGAS The Money Show 9-12 May 2011 Caesars Palace

NEW YORK CITY ETF & Indexing USA 16-18 May 2011 Princeton Club

Global Round-Up ► US/UK: ETF SECURITIES PLANS 1 BN. IPO

The commodities specialist is planning a potential one billion share listing. The U.K. ETF provider has retained Citigroup and Bank of America Merrill Lynch to discuss its strategic options, including an initial public offering. ► US: LARGEST COMMODITY INDEX CELEBRATES FIVEYEAR ANNIVERSARY

DB Commodity Services LLC, a subsidiary of Deutsche Bank, and Invesco PowerShares, are commemorating the five-year anniversary of the PowerShares DB Commodity Index Tracking Fund, the first and largest broad-based commodity ETF listed in the United States. ► US: TD AMERITRADE OFFERS ETFS FOR 401(K)

TD Ameritrade recently launched a program enabling plan sponsors and

3 ETF Radar Magazine | Issue May 2011

independent RIAs to offer exchangetraded funds to 401(k) participants.

cash and gold indicates an ongoing desire for lower risk investments.

► SOUTH AFRICA: NEW ABSA

► INDIA: NEW GOLD ETF

ETFS

Birla Sun Life Mutual Fund, based in Mumbai, has started an open-ended gold ETF. The Birla Sun Life Gold ETF will be benchmarked to the domestic price of physical gold. The ETF has been listed

Absa Capital is launching a multi-asset ETF. The fund, Growth and Protect NewFunds Multi-Asset Passive Portfolio Solutions, will be listed on the Johannesburg Stock Exchange within the next weeks.

on the Bombay SE and India’s National SE. ► AUSTRALIA: VANGUARD

► ASIA: INVESTORS POSITIVE,

EMIRATIS STAY CAUTIOUS Friends Provident recently published its “Investor Attitudes Index”, covering Hong Kong, Singapore and the UAE. Investors in both Asian markets are more positive than in the UAE. Gold and equities/shares remain the favoured asset classes in HK. Singapore follows a similar pattern. UAE remains least positive of the three markets, but once again shares similar views on bonds. A preference for

TO LAUNCH NEW ETFS Vanguard will boost its presence in the Aussie ETF market with the introduction of three new products. The new funds will include Australian small and large companies ETFs and a high yield Australian shares ETF and are expected to commence trading around the end of May 2011, according to Robyn Laidlaw, Head of Product Development.

Global Summary Top10 Global Index Provider

SINGAPORE Indexing&ETFAsia 1 June 2011 Amara Hotel

MSCI 25.3% ↑

World Islamic Conference 8-9 June 2011 Pan Pacific Hotel

Russell 6.2% ↑ Dow Jones 3.8% → STOXX 3.6% ↓

FRANKFURT ETF & Indexing Deutschland 20-22 June 2011 Radisson Blu Hotel MADRID ETF & Indexing Espana 15-16 Jun 2011 Melia Ave. America Hotel

Deutsche Boerse 2.8% ↑ Other 16.7%

Number Cruncher

Increase of the price for one unce gold (in percent and US-Dollar) since the year 2001.

Hot Product Debuts

Number of Exchange Traded Funds worldwide currently available for private and institutional investors.

Sources: Event organizers, Reuters, BusinessWire, BlackRock, ETF Radar Global Research

► NEW ASIA FOCUSED ETFS

► NEW FLOATING RATE BOND ETF

► THREE NEW PHYSICAL ETCS

► NEW PURE BETA COMMODITY ETNS

Deutsche Bank has launched two new ETFs which are linked to the MSCI AC Asia exJapan High Dividend Yield and MSCI Philippines Investable Market indices, respectively.

It’s the first ever ETF linked to Asian high dividend stocks and the first ETF listed in Asia to give investors exposure to the Philippines. “We still observe a strong interest for high yielding investments in Asia” said Singapore-based Marco Montanari, Regional Head of db X-trackers.

ETF-Provider Van Eck introduced the new Market Vectors Investment Grade Floating Rate ETF. FLTR seeks to track, before fees and expenses, the Market Vectors Investment Grade Floating Rate Index, which consists of a portfolio of U.S. dollardenominated investment grade floating rate notes. The newly launched product could exhibit attractive returns for income-oriented investors also seeking participation on rising interest rates.

London-based Source has launched three new physical precious metal ETCs: The Source Physical Silver P-ETC, the Source Physical Platinum P-ETC and the Source Physical Palladium P-ETC will offer exposure to the respective precious metals.

Each ETC is secured by physical metal held in JPMorgan's London vaults.

These will complement Source's existing Physical Gold P-ETC, which has raised over US$ 1 billion.

Barclays recently launched a new series of iPath ETNs. Unlike many commodity indices, which roll their exposure to the corresponding futures contract on a monthly basis, iPath´s Beta Indices may roll into one of a number of futures contracts with varying expiration dates. The ETNs are linked to commodities like Crude, Copper, Coffee. “The new indices are unique” said Waqas Samad, Head of Index, portfolio and risk solutions.

Ticker/ISIN: Lu0592215825, LU0592215403 TER: 0.65% p.a.

CCY: USD

Ticker/ISIN: FLTR TER: 0.49% p.a.

CCY: USD

Ticker/ISIN: IE00B43VDT70 IE00B40QP990, IE00B4LJS984 TER: 0.39% p.a.

CCY: USD

Ticker/ISIN: CUPM, OLEM, et.al.

TER: 0.75% p.a.

CCY: USD

4 ETF Radar Magazine | Issue May 2011

Index Investor S&P 500 Sector Map

Financials: “Everybody gets a second chance...”

by Sebastian Stahn In April the S&P 500 Index rose 2.96% reaching the highest level since June 2008. Earnings grew more than forecasted and Bernanke gave green light for an ongoing risk trade. Having a look at the sector performances, the S&P 500 Financials was the worst performing sector with a nearly unchanged performance of 0.01% in April 2011. The main reason was the disappointing quarterly results of the banking sector. Net revenue at the six largest U.S. banks fell

The Action Plan

13.3% in the first quarter from the year-ago period. If investors believe in a recovery of the sector, the contrarian pick with the Vanguard Financials ETF (VFH) would be the best choice.

Best performing sector with a performance of +6.52% in April was the S&P 500 Health Care Index driven by the fact that S&P upgraded the sector to market weight from underweight. If you believe in an ongoing trend, the Health Care Select Sector SPDR Fund (XLV) would be your best pick. 

CONTRARIAN PICK

BEST-TREND PICK

Vanguard Financials ETF ISIN/Ticker: VFH US TER / AUM: 0.27% / 676mn.

1 Year Return: +4.23% Last Price/High/Low 52-Weeks: $ 34.13 / 27.67 / 35.23 Replication: Full replication to sampling

Health Care Select Sector SPDR Fund ETF ISIN/TIcker: XLV US TER / AUM: 0.24% / 3,361 mn.

1 Year Return: +16.42% Last Price/High/Low 52-Weeks: $ 35.25 / 27.49 / 35.35 Replication: Full replication

RISK-REWARD-ANALYSIS

RISK-REWARD-ANALYSIS

based on an investment horizon of one month

VFH

based on an investment horizon of one month

LOW

HIGH

XLV

LOW

WORST PERFORMING SECTORS Financials 0.0%

Energy 1.48%

Telecommunication Services +1.75%

Industrials +2.75%

Information

Technology +2.95%

Consumer Staples +5.24% Mon thly

Perfo rman ce.

As of

April

Health Care +6.52%

29, 2 011.

BEST PERFORMING SECTORS

5 ETF Radar Magazine | Issue May 2011

Materials +2.15%

Consumer Discretionary +3.96%

Utilities +4.03%

Index Investor Tactical Portfolio Update

Bullish outlook for Gold and Health Care

by David Cohne QUICK FACTS ► Health Care Stocks with high upside potential. ► The rally on Gold is likely to be

continued.

TThe ETF Radar Tactical portfolio is a model portfolio that invests in five ETFs based on an individual tactical ETF rankings system maintained by Cohne Investment Group. The portfolio trades at the end of each month. The holdings for May include SPDR Gold Shares (GLD), iShares S&P Europe 350 (IEV), iShares Russell 2000 Growth (IWO), SPDR-Health Care (XLV) and iShares GSCI Commodity Index (GSG). As interest rates remain cheap, we can expect

increases in precious metals such as Gold and Silver. In addition, reports of a continued high employment add to the commodity speculation.

European stocks have been trending upwards due to positive earnings reports from such companies as Volkswagen and Ericsson.

Gold Shares meanwhile trade also on the Singapore Stock Exchange as well as the Tokyo Stock Exchange and the Stock Exchange of Hong Kong.

ETF of the Month Based on the rankings SPDR Gold Shares (GLD) is the ETF of the month. Originally listed on the New York Stock Exchange in November of 2004, and traded on NYSE Arca since December 13, 2007, SPDR Gold Shares has been one of the fastest growing ETFs in the US. It tracks the price of gold bullion. It has an expense ratio of 0.40% and an average daily trading volume of 13 million shares. SPDR

SPDR Gold Shares ETF (GLD) 52-Week Range Market Cap Dividends TER Last Volume ETF Issuer Replication

$113.08 - $153.61 $56.02 billion 0.40% p.a. $17,679,534 SSgA Physical

ETF Radar Tactical Portfolio Ticker

ETF NAME

TER

AUM

WEIGHT

GLD

SPDR Gold Shares

0.40%

$56.02 bn.

20%

IEV

iShares S&P Europe 350

0.60%

$ 1.45 bn.

20%

IWO

Russell 2000 Growth Index Fund

0.30%

$ 4.58 bn.

20%

XLV

Health Care Select Sector SPDR Fund

0.20%

$ 3.62 bn.

20%

GSC

S&P GSCI(R) Commodity-Indexed Trust

0.75%

$ 2.01 bn.

20%

Source: Cohne Investment Group, exclusively for ETF Radar / May 2, 2011 Ranking

6 ETF Radar Magazine | Issue May 2011

Feature

Chasing Yield in ETFs In times with ultra-low interest rates, many equity investors are turning toward dividend paying stocks or other higher-yielding instruments. High yield corporate ETFs continue to grow in assets, but do they still belong in your portfolio?

by David Cohne QUICK FACTS â–ş In current times when an investor is lucky to get a 1.50% return annually, higher yielding instruments are very popular. â–ş Biggest issues to be aware of are credit tightening and the spread.

There are a few new Exchange Traded Funds on the scene hoping to take advantage of the growing asset bases of the original high yield corporate funds. For instance, Guggenheim Funds released three target date based ETFs in June of last year. The funds follow an index that is designed to track the performance of a portfolio of high yield corporate bonds held to a maturity year. In addition, Advisor Shares released an actively managed ETF by Peritus Asset Management which came out in November last year. The asset class seems to be hot right now, but how long will it last?

It's hard to find bargains One of the reasons people are still looking for high yield 7 ETF Radar Magazine | Issue May 2011

is that stock bargains are becoming harder and harder to find. As the stock market has recovered, there are less equities selling at value or affordable prices. Another reason is a bearish outlook on treasuries. Yields are still very unattractive. There are also very low yields in the investment grade corporate bond space. Investors, who are willing to take on more risk, are looking for high yield bonds. The spreads are still attractive. Another point to consider is that when stocks do well, so do high yield bonds.

There is fairly strong to correlation between the two. As the stock market continues to rise, investors are likely to stick with these types of investments. Why not? They provide fairly low volatility and good long term returns. They can also benefit from rising inflation, especially until short term rates rise and the spread gets smaller. They can protect your portfolio when interest rates rise and bond prices start to fall. Other bonds don't offer you that same protection.

High-Yield-Investments still in an uptrend In terms of analyzing this space from a technical viewpoint, just take a look at how a high yield ETF has recently >

Feature performed compared to its 200 Day and 50 Moving Averages. For the purposes of this analysis let's use the iShares iBoxx High Yield Corp ETF (HYG) as an example. As of April 26th, HYG is above both its 50 Day and more importantly its 200 Day moving average. This tells us that it is still in an uptrend.

If you consider these facts, you might want to jump right in, but beware; this isn't going to last forever.

People seem to forget what happened to high yield bonds in 2008. As the market tanked, so did high yield corporate bonds. We take a tactical approach to just about all our investments, so we wouldn't recommend a buy and hold strategy with these funds. It's best to keep abreast of economic and credit conditions and prices of bonds.

“

We don't expect a big degradation in the loan market.

”

Jonathan Blau Head of Global Leveraged Finance Strategy Credit Suisse

OUR SHORTLIST Selected ETFs At A Glance SPDR Barclays Capital High Yield Bond ETF (NYSE: JNK) Yield: 8.50% | AuM: 7.44 billion iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: HYG) Yield: 7.80% | AuM: 8.48 billion PowerShares Fundamental High Yield Corporate Bond ETF (NYSE: PHB) Yield: 7.00% | AuM: 592.93 million PowerShares Senior Loan ETF (NYSE: BKLN) Yield: 4.90% | AuM: 118.10 million

THE HIGH YIELD TRIO Performance Comparison Of Selected High Yield ETFs vs. S&P500 Performance (USD)

2009

Don't forget about the risks The biggest issues to be aware of are credit tightening and the spread. As the central bank tightens, very risky high yield bonds aren't the best place to be. According to Jonathan Blau, Head of Global Leveraged Finance Strategy at Credit Suisse, “When the Central Bank tightens, and liquidity is withdrawn from the financial system, that's when riskier assets underperform. The riskier the bond, the worse it will likely perform.”

2011

2010

+60%

S&P500

+50%

+40%

This brings up another question. If not high yields, where should we allocate our fixed income investments? One possibility is senior loan securities. PowerShares has recently released an ETF that covers this market, the PowerShares Senior Loan ETF (BKLN). This fund tracks the S&P/LST US Leveraged Loan 100 Index, a portfolio that tracks the performance of leveraged loans. We put this question to Mr. Blau once again, “Initially, the effect will be muted. Many companies have fixed their balance sheets by pushing out maturity dates so we don't expect a big degradation in the loan market.”

ETFs to Watch We've run high yield corporate ETFs through the ETF ranking model and there are three main high yield corporate ETFs to keep an eye on. This includes the PowerShares High Corp ETF (PHB), SPDR Barclays High Yield Bond ETF (JNK) and iShares iBoxx High Yield Corp (HYG). JNK and HYG have similar returns, while PHB is less volatile, especially when high yield bonds took a short dive in the first half of March. The reason for this is likely the fundamental management style of the ETF. It tracks the RAFI High Yield Bond Index. As for the PowerShares Senior Loan ETF (BKLN), we would keep it on your watch list for now. 

+30%

JNK

+20%

PHB HYG

+10%

0% Source: NYSE as of May 2, 2011

8 ETF Radar Magazine | Issue May 2011

Spotlight

ETF No swap, no cry?

Recently super-regulators like the G20's Financial Stability Board warned over ETF risks. The main critic came on securities lending and swap-based Exchange Traded Funds. What the industry should do now – and what should investors know.

by Sebastian Stahn and Martin Raab, CAIA As the ETF market has developed rapidly, ETFs have begun to play an increasingly important role in today's capital markets. For example, several ETFs are amongst the most traded instruments on the London Stock Exchange on any given day. Same picture on the other side of the Atlantic Ocean. The SDPR ETF linked to the S&P500 is one of the world's most liquid investment products. Little wonder that recently ETFs have appeared on the radar screen of three well-known regulatory authorities: The G20's Financial Stability Board (FSB), the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) attacked the ETF industry. The critics were mainly focused on inverse and leveraged products. The regulators are seeing 9 ETF Radar Magazine | Issue May 2011

new systematic risks caused by the global ETF business. The FSB criticized securities lending by providers of physical-replicated ETFs, which buy the constituents of the benchmark they wish to track.

“

Little wonder that recently ETFs have appeared on the radar screen of three well-known regulatory authorities.

”

The IMF said the disproportionately large size of some ETFs compared with the market capitalization of their underlying indices posed a risk of

disruptions in some markets from heavy ETF trading. Investors and ETF providers should improve their riskmanagement strategies and the providers should also enhance transparency, making public details on a product's riskiness. A bit worse: The Bank for International Settlements commented on the systemic risks posed by ETFs in their new working paper that drew uncomfortable parallels between ETFs and the structured products like CDOs and CLOs that blew up in the financial crisis.

There are good reasons why using securities lending in ETFs Competition between ETF issuers is encouraging them to use derivatives like swaps and forwards to maximize the ETF´s profits. No investor wants

Spotlight

to pay large fees, especially not when you are an institutional player in the asset management business and compete with some aggressive peers.

As expenses dip precipitously sometimes close to zero as seen on some index products in Europe , some firms are turning to practices such as securities lending for a larger part of revenue. Issuers like iShares or State Street Global Advisors split lending profits between the firm and shareholders. Those shareholder profits go towards counteracting an expense ratio. Rate wars also play a role in product development calculations, evaluating new markets on what fees clients will pay for access and whether there are enough clients for the fund to reach a sustainable scale.

The main aspects There are two main aspects to the way in which ETF investors could benefit from securities lending. First, the ETF's asset manager can lend the constituent parts of an ETF and a portion (i.e. 60/40) of the generated revenue is returned to the fund. This activity, common in many unit trusts or mutual funds available to the public, accrues benefits to all fund shareholders as reflected in the fund's Net Asset Value (NAV). Hence some ETF issuers are able to compete with near-zero TERs on blue-chip indices like the EuroStoxx50. Secondly, large shareholders can lend their ETF units, which is something that investors in other pooled fund vehicles cannot do. Each individual holder decides whether or not to lend its units, and any lending revenue accrues directly to that investor.

Swap-based ETFs under fire The FSB pays particular attention to the conflicts of interest within the European ETF industry, where unlike its peers in the US the same institution can be the ETF issuer, swap counterparty, market maker and sometimes index provider. “Since the swap counterparty is typically the

bank also acting as ETF provider, investors may be exposed if the bank defaults. Therefore, problems at those banks that are most active in swapbased ETFs may constitute a powerful source of contagion and systemic risk,” said the FSB. Basically these concerns are legitimated. For example ETFissuer Lyxor quotes prominently the potential counterparty risk vs. its mother company Société Générale on its own website: “Through Lyxor ETFs, investors are exposed to counterparty risks resulting from the use of an OTC Swap with Société Générale. In-line with UCITS guidelines, the exposure to the Swap Counterparty, Société Générale, cannot exceed 10% of the total fund assets.” Finally, having a swap exposure in Lyxor ETFs (just as an example) versus Société Générale should not be a surprise for investors and also not for a regulator.

Nevertheless it's important that each ETF issuer proactively deals with these risks.

“

Lyxor quotes prominently the potential counterparty risk vs. its mother company Société Générale on its own website.

futures and forwards (OTC traded future contract). This instruments use additional collaterals to be protected in case of the bankruptcy of their counterparty. If an investor desires an ETF with exotic investment exposure there is no alternative to derivatives.

Experts’ advice available for complex questions and mandates Finally, three years after the financial crisis and the Lehman disaster, most ETF issuers and investors are aware of potential risks and strictly monitor it.

Nevertheless, investors should bear in mind that swap-based ETF structures reveal some significant differences, notably regarding collateral policy, swap reset frequency, swap fees and the taxation of dividend income from the underlying securities. Investor Intelligence firms and advisors like ETF Radar could help when it comes to specific questions on Exchange Traded Funds. No matter if it’s from an asset managers point of view or within a complex mandate. 

”

No alternative when it comes to exotic strategies Especially in Europe, ETFs using swaps to track their underlying index today outnumber those using (traditional) physical replication by around 2:1. In the US, ETF provider use primarily futures in order to track the inverse or leveraged performance of a specific underlying. In most cases especially when it comes to exotic strategies there is no alternative to use such financial derivatives. Investors exposed i.e. to volatility risk can use various ETPs linked to the VIX Index in order to hedge their portfolio accordingly. Also most of the Exchange Traded Commodities or Exchange Traded Notes are purely based on commodity 10

ETF Radar Magazine | Issue May 2011

People Expert Talk with

Tom Anderson Global Head of ETF Strategy and Research, State Street Global Advisors SSgA’s Global Head of ETF Strategy and Research talks about the prospects of the Exchange Traded Funds Industry, the long-term outlook for emerging market ETFs and latest product innovations.

by Silvan Schelling

VITA ► Lives in: Boston (MA) ► Career: Tom is Global Head of ETF Strategy and Research for SSgA’s Intermediary Business Group. He is responsible for developing research content for the ETF marketplace, as well as developing and maintaining key relationships within the research, investment and intermediary communities. Prior to joining this unit, Thomas was Portfolio Manager and Investment Team Leader in the firm's Charitable Asset Management Group and portfolio manager in SSgA’s Private Asset Management division. Before joining State Street in 1998, he worked at Funds Distributor Inc., State Street Research, Keystone Funds, and Liberty Mutual Insurance. Together, Thomas holds 22 years of financial services, investment, and marketing experience.

He earned a Bachelor's degree from Colgate University and a MBA from Boston College. He earned the CFA designation and is a member of CFA Institute and the Boston Securities Analysts Society.

11 ETF Radar Magazine | Issue May 2011

The last year was great for the ETF industry, U.S. assets were up nearly 30%. What are your expectations for the current year?

Despite the tremendous growth of ETF assets in recent years, I feel strongly that the industry's best days lie ahead. When you look at ETF asset growth across the globe, markets are at different stages of development, but the industry remains in an emergence phase with plenty of room for growth. In 2010, we saw tremendous growth in fixed income, dividend and emerging market equity ETFs. And for the current year?

In 2011, with events in the Middle East and Asia, we've seen o u t f l ow s f ro m e m e rg i n g markets and inf lows into developed international equities.

How about your thoughts on Emerging Markets ETFs especially after the turmoil in the Middle East and the Japan inferno?

Emerging market ETFs encompass a wide range of funds, ranging from broadbased products to single country funds. In the aggregate, emerging markets ETFs have

seen outflows in 2011. This may have started as a rebalancing move that was exacerbated by events in the Middle East and the Asia. However, the longterm outlook for emerging m a rke t s re m a i n s s t ro n g.

Emerging market economies make up close to half of all global G D P, a n d t h e i r g r o w t h continues to have the potential to exceed that of the developed markets.

“

I feel strongly that the industry's best days lie ahead.

”

Balancing this potential for greater returns are several unique risks that should be carefully considered before adding emerging markets exposure to your portfolio.

Emerging markets risks include currency depreciation, significant policy changes, regulatory challenges, and political uncertainty or upheaval. These risks can make emerging markets more volatile than their developed market counterparts, particularly in the short-term.

People

Which innovations in Exchange Traded Funds will SSgA release in the next time? What are State Street’s key topics within the ETF business for the current year?

Our product development philosophy continues to place a premium on innovation, but not at the expense of quality. During the past 18 years, State Street Global Advisors has worked closely with investors to develop a precise family of SPDR ETFs that includes the world's first ETF - the SPDR S&P 500 ETF, the first commodity ETF SPDR Gold Shares, and the industry's first sector ETFs. We're also proud to have launched the first ETF in Asia in 1999 and the first local Chinese ETF in 2005.

complex strategies. Does this result in a product jungle and increasingly confuse investors?

There's no question that the proliferation of ETFs is responsible for some confusion, even among sophisticated investment professionals. In an effort to help investors navigate the changing landscape and better evaluate ETFs, State Street Global Advisors is committed to improving investor education.

SPDR University (w w w.spdru.com), which is consistently recognized as one of the ETF industry's most informative websites is evidence of this commitment.

“

What do you expect SSgA's ETF AUM will total by end of 2011?

I don't have a crystal ball, but clearly, demand for SPDR ETFs was very strong across the globe last year. In 2010, State Street's ETF assets increased 25 percent to $255 billion worldwide. More broadly speaking, ETF assets have grown 20-30% annually in recent years if this continues, US ETF industry assets could exceed $2 trillion by the end of 2013.

Finally, investors continue to worry about inflation and the need for noncorrelated exposures, resulting in interest in gold, REIT, natural resources, and inflation protected bond SPDRs. Most newly issued ETFs in the U.S. as well as in Europe are linked more and more to exotic and

The US ETF industry assets could exceed US$2 trillion by the end of 2013.

Thank you! 

“

”

In 2011, we've seen significant client interest in several key areas. First, the need for income in a low interest rate environment has led to investor flows into dividend, high yield bond, and convertible bond SPDRs. Many US investors also remain overweighted in US securities and continue to want to build out the non-US component of their p o r t fo l i o s, wh e t h e r i t i s i n international equities or non-US fixed income.

”

Many US investors continue to want to build out the non-US component of their portfolios.

Across the Atlantic:

People

Interview with Farley Thomas, HSBC in the Magazine’s European Edition. www.etf-radar.com 12

ETF Radar Magazine | Issue May 2011

Rankings

In association with

Top 25 ETF providers around the world ranked by Assets under Management As at end March 2011

WORLDWIDE Q1-11 Provider

# ETFs

YTD change

AUM (US$ Bn)

% total

ADV (US$ Bn)

# planned # ETFs

% ETFs

AUM (US$ Bn)

% AUM

% market share

iShares

461

$609.3

43.5%

$19.4

21

-12

-2.5%

$30.7

5.3%

-0.6%

State Street Global Advisors

118

$200.4

14.3%

$32.8

33

5

4.4%

$9.7

5.1%

-0.2%

Vanguard

66

$164.7

11.8%

$1.8

1

1

1.5%

$16.2

10.9%

0.4%

Lyxor Asset Management

158

$54.5

3.9%

$1.2

1

2

1.3%

$1.2

2.3%

-0.2%

db x-trackers

183

$51.8

3.7%

$1.0

13

4

2.2%

$2.8

5.6%

0.0%

PowerShares

131

$47.0

3.4%

$4.1

48

1

0.8%

$4.2

9.8%

0.1%

ProShares

103

$23.4

1.7%

$3.8

98

3

3.0%

$1.8

8.4%

0.0%

Van Eck Associates Corp

30

$21.9

1.6%

$0.9

36

1

3.4%

$2.0

10.0%

0.0%

Credit Suisse Asset Management

58

$16.6

1.2%

$0.1

0

4

7.4%

$0.9

5.9%

0.0%

Nomura Asset Management

32

$15.2

1.1%

$0.2

0

0

0.0%

-$1.2

-7.3%

-0.2%

Zurich Cantonal Bank

7

$12.7

0.9%

$0.1

0

0

0.0%

$0.9

7.4%

0.0%

Bank of New York

1

$11.5

0.8%

$0.5

0

0

0.0%

-$0.7

-5.8%

-0.1%

46

$11.3

0.8%

$0.2

72

2

4.5%

$1.4

13.9%

0.1%

UBS Global Asset Management

38

$9.9

0.7%

$0.1

6

9

31.0%

$3.3

51.0%

0.2%

Commerzbank

90

$9.2

0.7%

$0.1

0

0

0.0%

$0.6

7.3%

0.0%

Amundi ETF

95

$9.1

0.7%

$0.1

0

3

3.3%

$2.0

27.4%

0.1%

HSBC/Hang Seng

26

$8.2

0.6%

$0.1

4

9

52.9%

$0.8

10.3%

0.0%

First Trust Advisors

44

$7.3

0.5%

$0.1

17

1

2.3%

$1.9

34.3%

0.1%

Direxion Shares

42

$7.0

0.5%

$2.9

174

3

7.7%

$0.4

6.1%

0.0%

Nikko Asset Management

20

$6.7

0.5%

$0.1

0

3

17.6%

$0.1

1.5%

0.0%

Source Markets

57

$6.6

0.5%

$0.4

15

1

1.8%

$1.6

32.7%

0.1%

ETFlab Investment

40

$6.6

0.5%

$0.1

0

5

14.3%

-$0.2

-3.2%

0.0%

EasyETF

49

$6.3

0.4%

$0.0

1

0

0.0%

$0.7

12.6%

0.0%

Claymore Investments

30

$6.1

0.4%

$0.0

5

1

3.4%

$0.6

11.8%

0.0%

Daiwa Asset Management

23

$5.5

0.4%

$0.0

1

0

0.0%

-$1.4

-20.0%

-0.1%

WisdomTree Investments

Source: BlackRock Global ETF Research and Implementation Strategy Team

13

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ETF Radar Magazine | Issue May 2011

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Rankings Top 10/Top 5 ETFs by Assets under Management As at end March 2011

UNITED STATES ETF SPDR S&P 500 Vanguard MSCI Emerging Markets ETF iShares MSCI EAFE Index Fund iShares MSCI Emerging Markets Index Fund iShares S&P 500 Index Fund PowerShares QQQ Trust iShares Barclays TIPS Bond Fund Vanguard Total Stock Market ETF iShares Russell 2000 Index Fund iShares Russell 1000 Growth Index Fund

Bloomberg ticker SPY US VWO US EFA US EEM US IVV US QQQ US TIP US VTI US IWM US IWF US

AUM (US$ Mn) $89,906.9 $47,224.5 $39,148.1 $38,831.4 $27,027.6 $24,459.4 $19,889.0 $19,527.1 $17,621.0 $13,572.5

ADV ('000 shares) 194,261 20,582 18,642 60,205 2,447 69,195 777 1,782 62,666 2,701

ADV (US$ Mn) $25,340.2 $967.2 $1,098.3 $2,792.7 $320.6 $3,898.3 $84.8 $119.8 $5,075.8 $160.4

Bloomberg ticker IUSA LN DAXEX GY ZGLD SW MSE FP IEEM LN ISF LN SX5EEX GY XDAX GY XMEM GY IBCS GY

AUM (US$ Mn) $9,267.7 $8,331.3 $7,887.5 $7,179.7 $6,707.0 $5,917.3 $5,262.7 $5,201.2 $5,068.8 $4,701.9

ADV ('000 shares) 10,141 2,948 10 3,213 1,408 14,968 1,913 1,358 1,877 152

ADV (US$ Mn) $131.6 $268.7 $19.9 $131.8 $61.7 $140.8 $78.6 $133.6 $78.3 $25.5

Bloomberg ticker STX40 SJ STXDIV SJ STXFIN SJ STXIND SJ NRD SJ

AUM (US$ Mn) $1,002.4 $154.4 $120.4 $95.4 $94.7

ADV ('000 shares) 1,107 1,214 236 32 1

ADV (US$ Mn) $4.8 $0.3 $0.3 $0.1 $0.0

Bloomberg ticker 2823 HK 2800 HK 2833 HK 510050 CH 2828 HK 159901 CH STW AU 2821 HK 069500 KS 0050 TT

AUM (US$ Mn) $7,770.8 $7,030.4 $3,949.2 $3,068.0 $2,899.7 $2,836.6 $2,424.0 $2,408.3 $2,181.0 $2,041.7

ADV ('000 shares) 88,426 19,973 65 359,532 2,000 650,481 257 12 2,290 15,627

ADV (US$ Mn) $151.7 $61.0 $2.0 $113.9 $34.3 $81.4 $12.2 $1.5 $59.3 $31.6

Bloomberg ticker 1306 JP 1321 JP 1308 JP 1330 JP 1320 JP

AUM (US$ Mn) $7,306.7 $6,499.6 $3,104.9 $3,084.2 $2,605.5

ADV ('000 shares) 5,469 890 698 517 267

ADV (US$ Mn) $58.8 $106.5 $7.4 $62.1 $31.8

EUROPE ETF iShares S&P 500 iShares DAX (DE) ZKB Gold ETF (CHF) Lyxor ETF Euro STOXX 50 iShares MSCI Emerging Markets iShares FTSE 100 iShares EURO STOXX 50 (DE) db x-trackers DAX ETF db x-trackers MSCI Emerging Market TRN Index ETF iShares Markit iBoxx Euro Corporate Bond

MIDDLE-EAST/AFRICA ETF SATRIX40 Satrix Dividend Plus SATRIX Financials SATRIX Industrials NewRand ETF

ASIA-PACIFIC ETF iShares FTSE A50 China Index ETF* Tracker Fund of Hong Kong (TraHK) Hang Seng Index ETF China AMC SSE 50 Hang Seng H-Share Index ETF E Fund SZSE 100 SPDR S&P/ASX 200 Fund ABF Pan Asia Bond Index Fund Samsung Kodex200 ETF Polaris Taiwan Top 50 Tracker

JAPAN ETF TOPIX ETF NIKKEI 225 ETF Listed Index Fund TOPIX Listed Index Fund 225 Daiwa ETF NIKKEI 225 Source: BlackRock Global ETF Research and Implementation Strategy Team

ETF Radar Magazine | Issue May 2011

14 10

Rankings Top 10 ETFs by Change in Average Daily Volume As at end March 2011

WORLDWIDE ETF SPDR S&P 500 iShares Russell 2000 Index Fund PowerShares QQQ Trust iShares MSCI Emerging Markets Index Fund Energy Select Sector SPDR Fund iShares MSCI EAFE Index Fund Financial Select Sector SPDR Fund Vanguard MSCI Emerging Markets ETF SPDR Dow Jones Industrial Average ETF iShares MSCI Brazil Index Fund

Bloomberg ticker SPY US IWM US QQQ US EEM US XLE US EFA US XLF US VWO US DIA US EWZ US

ADV (US$ Mn) $25,340.2 $5,075.8 $3,898.3 $2,792.7 $1,251.8 $1,098.3 $1,097.5 $967.2 $946.2 $905.4

ADV ('000 shares) 194,261 62,666 69,195 60,205 16,297 18,642 67,082 20,582 7,786 12,210

AUM (US$ Mn) $89,906.9 $17,621.0 $24,459.4 $38,831.4 $11,087.2 $39,148.1 $8,159.7 $47,224.5 $9,293.3 $13,312.3

AUM (US$ Mn) Q1-11 $38,831.4 $260.6 $11,087.2 $47,224.5 $7,340.2 $8,331.3 $24,459.4 $39,148.1 $6,486.7 $11,193.7

AUM (US$ Mn) Dec-10 $47,551.5 $3,650.6 $8,396.4 $44,569.8 $4,883.3 $5,917.7 $22,069.9 $36,923.1 $4,622.1 $9,332.0

Change (US$ Mn) -$8,720.1 -$3,390.0 $2,690.8 $2,654.8 $2,456.8 $2,413.6 $2,389.5 $2,225.0 $1,864.6 $1,861.7

Top 10 ETFs by Change in Assets under Management As at end March 2011

WORLDWIDE

ETF iShares MSCI Emerging Markets Index Fund Daiwa ETF NIKKEI 225 Energy Select Sector SPDR Fund Vanguard MSCI Emerging Markets ETF iShares MSCI Japan Index Fund iShares DAX (DE) PowerShares QQQ Trust iShares MSCI EAFE Index Fund iShares MSCI Canada Index Fund iShares S&P MidCap 400 Index Fund

Bloomberg ticker EEM US 1320 JP XLE US VWO US EWJ US DAXEX GY QQQ US EFA US EWC US IJH US

Source: BlackRock Global ETF Research and Implementation Strategy Team

► BIGGEST LOSER

► ENERGY STILL HOT

EEM is still having large outflows because of the turmoil in Northern Africa and Middle East, followed by Daiwa’s Nikkei ETF due to new investor fears on Japan. But EWJ (iShares Japan) enjoyed large inflows by end of March 2011.

Oil prices remain high, even if the current price levels for WTI and Brent are expected to lower a little bit within the next weeks. Hence XLE should exhibt attractive returns within the next months.

15 ETF Radar Magazine | Issue May 2011

Rankings Top 30 Best Performing ETPs As at end of April 2011

WORLDWIDE ETF/ETP

Listing Region

ProShares Ultra Silver

North America

1 Mth

25.05%

12 Mth

291.61%

158.20%

1,715,818,072.00

ETFS Leveraged Silver ETC

Europe

24.23%

305.41%

22.65%

41,856,559.00

Horizons BetaPro COMEX Silver Bull

North America

24.07%

296.87%

170.67%

66,600,525.00

ETFS Short Cocoa ETC

Europe

23.39%

-5.55%

-11.43%

1,626,134.00

Kodex Energy & Chemicals ETF

Asia-Pacific

23.17%

104.10%

66.87%

4,294,967,295.00

UBS E-TRACS CMCI Silver TR ETN

North America

21.06%

105.41%

25.64%

n/a

ETFS Leveraged Silver (DE) ETC

Europe

20.91%

286.55%

46.83%

31,479,481.00

ProShares UltraShort MSCI Japan

North America

20.11%

-13.32%

-13.18%

41,304,395.10

ETFS Short Cocoa (DE) ETC

Europe

20.09%

-9.94%

-7.82%

1,145,888.00

Kodex Autos ETF

Asia-Pacific

19.47%

103.28%

26.62%

4,294,967,295.00

PowerShares DB Commodity Dble Long ETN

North America

18.97%

54.60%

-21.43%

n/a

Direxion Daily India Bull 2X Shares

North America

18.31%

4.76%

11.47%

n/a

KB KStar Leverage ETF

Asia-Pacific

18.29% -

45.86%

4,294,967,295.00

Kodex Leverage ETF

Asia-Pacific

18.08%

58.30%

4,294,967,295.00

Mirae Asset Tiger 200 Leverage ETF

Asia-Pacific

17.93% -

45.27%

4,294,967,295.00

Horizons BetaPro NYMEX Crude Oil Bull

North America

17.23%

-5.36%

-52.08%

189,168,745.00

Daishin GIANT Hyundai Motor Group ETF

Asia-Pacific

17.18%

100.73%

103.51%

4,294,967,295.00

ProShares Ultra DJ-UBS Crude Oil

North America

16.17%

7.83%

-21.24%

n/a

ETFS Leveraged Crude Oil ETC

North America

16.03%

6.57%

-50.40%

95,247,924.00

Direxion Daily Emrg Mkts Bull 3X Shares

North America

15.67%

26.47%

73.48%

n/a

iPath DJ-UBS Cotton TR Sub-Idx ETN

North America

15.44%

148.37%

28.91%

n/a

ETFS Leveraged Petrolm DJ-UBSCI ETC

Europe

14.58%

20.91%

-42.43%

2,258,843.00

ETFS Leveraged Energy DJ-UBSCI ETC

Europe

14.34%

1.09%

-52.64%

2,511,438.00

ETFS Leveraged Cotton ETC

Europe

14.17%

496.03%

24.81%

5,837,137.00

ETFS Leveraged Live Cattle ETC iShares Silver Trust JB Physical Silver Fund AX (USD) ETFS Physical Silver ETC JB Physical Silver Fund A (USD) ETFS Leveraged Gasoline ETC

Europe North America Europe Europe Europe Europe

13.55% 13.03% 13.03% 13.03% 13.01% 13.00%

29.38% 115.38% 114.06% 115.34% 114.04% 53.86%

-11.05% 25.17% 81.83% 28.08% 81.99% -25.21%

1,271,677.00 n/a 398,236,886.00 991,022,364.00 398,236,886.00 918,041.00

52.28%

Inception

Net assets (USD)

Source: GlobalFundData/Morningstar as of May 2, 2011

► IS THE SILVER RALLY OVER – OR JUST BACKPEDALING? After a strong rally and the hit of a new all-time-high silver is consolidating. The main question is: Is the rally over or is silver just breathing deeply? The opinions are largely divided.

16 ETF Radar Magazine | Issue May 2011

Rankings Top 30 Worst Performing ETPs As at end of April 2011

WORLDWIDE ETF/ETP

Listing Region

ETFS Leveraged Cotton (DE) ETC

Europe

-37.36%

234.97%

35.37%

4,113,255.00

ETFS Leveraged Cotton ETC

North America

-34.57%

273.43%

8.38%

5,837,137.00

ETFS Leveraged Sugar (DE) ETC

Europe

-28.55%

102.24%

19.01%

4,799,704.00

ProShares UltraShort Silver

North America

-26.55%

-85.81%

-80.20%

n/a

ETFS Leveraged Sugar ETC

North America

-25.37%

125.46%

-9.79%

6,811,279.00

ETFS Short Silver (DE) ETC

Europe

-24.48%

-68.55%

-40.02%

3,834,463.00

Horizons BetaPro COMEX Silver Bear

North America

-22.26%

-83.63%

-76.30%

17,238,067.00

ETFS Cotton (DE) ETC

Europe

-21.84%

87.98%

8.28%

34,063,716.00

ETFS Short Silver ETC

North America

-21.12%

-64.94%

-37.40%

5,098,477.00

iPath S&P 500 VIX Shrt-Trm Fut (DE) ETN

Europe

-20.99%

-72.54%

-74.62%

n/a

iPath DJ-UBS Cocoa TR Sub-Idx ETN

North America

-20.49%

-4.58%

-6.22%

n/a

Source S&P 500 VIX Futures ETF

Europe

-20.02%

n/a

Direxion Daily Emrg Mkts Bear 3X Shares

North America

-19.04%

-58.91%

-79.09%

n/a

ETFS Leveraged Lead (DE) ETC

Europe

-19.02%

-7.56%

-16.22%

2,312,988.00

PowerShares DB Commodity Dble Short ETN

North America

-18.51%

-44.22%

4.56%

n/a

ETFS Cotton ETC

Europe

-18.36%

109.57%

11.76%

48,339,955.00

ETFS Leveraged Lean Hogs (DE) ETC

Europe

-17.73%

-31.81%

-37.14%

1,552,018.00

PowerShares DB Crude Oil Dble Short ETN

North America

-17.70%

-27.76%

21.16%

n/a

Direxion Daily India Bear 2X Shares

North America

-17.67%

-30.59%

-34.03%

n/a

Source S&P GSCI Cotton TR T-ETC

Europe

-17.62%

112.16%

73.42%

4,768,983.00

Horizons BetaPro NYMEX Crude Oil Bear

North America

-17.52%

-27.91%

-16.77% 170,058,816.00

ETFS Short Corn (DE) ETC

Europe

-17.26%

-57.15%

-8.82%

2,686,537.00

ETFS Leveraged Lvstck DJ-UBSCI (DE) ETC

Europe

-16.98%

-12.90%

-23.80%

1,100,641.00

ETFS Sugar (DE) ETC

Europe

-16.97%

50.76%

2.26% 29,983,559.00

ETFS Leveraged Softs DJ-UBSCI (DE) ETC ETFS Leveraged Live Cattle (DE) ETC Horizons BetaPro NYMEX Natural Gas Bear iPath VSTOXX Sh-Term Futures TR (DE) ETN ETFS Leveraged Lead ETC ETFS Short Coffee (DE) ETC

Europe Europe North America Europe North America Europe

-16.80% -16.50% -16.03% -15.76% -15.41% -15.27%

192.84% 0.07% -14.99% -63.27% 3.06% -62.20%

41.70% 1,573,766.00 -16.03% 896,113.00 53.63% 210,903,953.00 -61.89% n/a -36.57% 3,282,370.00 -24.56% 3,640,167.00

Source: GlobalFundData/Morningstar as of May 2, 2011

â–ş COTTON SUFFERS BUT THERE ARE SOME OPPORTUNITIES Cotton suffered in April but now there is a unique opportunity due to backwardation. Traders could try to profit from this downward sloping curve, but should consider that cotton prices have recently hit a historic high.

17 ETF Radar Magazine | Issue May 2011

1 Mth

12 Mth

Inception

Net assets (USD)

n/a 28,163,430.00

Disclaimer Important notice to our readers General Information The views and expectations presented in the analyses, data and product presentations in this publication should not be viewed as investment recommendations of and by the ETF Radar Magazine or any of its affiliates or associates. Investors should seek independent professional advice. Contributors of this publication and/or its affiliates may invest in or act as a market maker for the securities or indices or other products referred to in this publication for its own account or the account of a third party. Editorial contributors may also have a business relationship with issuers of such securities or providers of such indices or products and may represent members of such issuers' or providers' decision-making bodies.

While the information in this publication has been obtained from sources believed to be reliable, neither the ETF Radar Magazine nor any contributor makes any representation as to its accuracy or completeness. The ETF Radar Magazine does not act as an registered investment advisor or fiduciary for anyone unless otherwise agreed. Any evaluations in this publication reflect only the author's opinion at the time of the analysis. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) contained in this material are as of the date indicated and are subject to change at any time without prior notice. This publication is general and for information only and does not constitute any form of recommendation, an offer to sell or a solicitation to buy any security or other financial instrument.

Prospective investors should understand the risks associated with the products mentioned in this publication and should reach an investment decision on the basis of the information in the relevant offering circulars. Neither the staff of the ETF Radar Magazine nor any other person shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary loss or damages, including without limitation lost profits arising in any way from the information contained in the material. All designated trademarks and brands are the property of their respective owners.

Additional Information All figures are subject to market fluctuation and change. Investments that are concentrated in a specific sector or industry may be subject to a higher degree of market risk than investments that are more diversified. An index is not managed and is unavailable for direct investment. Total returns assume reinvestment of all distributions, including dividends and capital gains. Reinvestment does not assure a profit or protect against a loss in declining markets. Total returns do not include commissions, fees, other transaction variables or the effects of taxation. Past performance does not guarantee or predict future results. The investment discussed may not be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances. This communication is not an offer to sell or solicitation of offers to buy any securities mentioned herein. This report is not a complete analysis of every material fact in respect to any fund or fund type. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Statistical information has been obtained from sources believed to be reliable but its accuracy is not guaranteed. The ETF Radar Magazine does not render legal, accounting or tax advice. Please consult your tax or legal advisors before taking any action that may have tax consequences.

The performance provided is past performance, which does not guarantee future results and current performance may be lower or higher than the performance data quoted. The investment return and principal value will fluctuate when sold and may be worth more or less than the original cost.

EXCHANGE TRADED FUNDS ARE SOLD BY PROSPECTUS. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISK, CHARGES AND THE PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION, CAN BE OBTAINED FROM THE ETF SPONSOR OR YOUR FINANCIAL ADVISOR. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. EXPENSES CAREFULLY BEFORE INVESTING.

www.etf-radar.com ETF Radar Magazine | Issue May 2011

18

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