Powershares has put together a new ETF to track the Bank of America Merrill Lynch Build America Bond Index. The BAB ETF will consist of securities that are eligible to partcipate in the Build America Bond Program.

The Build America Bond Program was created under the 2009 American Recovery and Reinvestment Act in order to decrease borrowing costs of local and state governments.  BABs are taxable municipal bonds that are actually subsidized by the U.S. Treasury.

There are two types of BABs - direct payment and tax credit bonds. Direct Payment BABs will pay the issuer 35% of the interest payments made to investors. Tax credit BABs will pass the 35% along as a tax credit. BABs were launched in April of 2009 and have been steadily increasing in popularaity with each passing day.

Therefore, due to their newfound popularity, it was only a matter of time before someone created new bond ETFs to track their performance.  Or in the case of the new funds, tracking the BAB index.

Here are some highlights regarding the new ETF...

1. It will invest at least 80% of its total assets in taxable municpal securities elegible for the BAB program
2. It will disclose its full portfolio holdings on a daily basis
3. The securities in the fund must have an investment-grade rating
4. The securities must have at least one year to maturity
5. Securities must have a fixed coupon schedule
6. Securities must have a minimum amount outstanding of $1 million
7. Securities in the ETF must have a direct pay federal subsidy

It's not only nice to see more bond ETFs, but more ETF innovations as well. And if your looking for more bond ETF information, you've come to the right place...

What You Need to Ask About Bond ETFs

14 Types of Bond ETFs

4 Ways to Invest with International Bond ETFs

A List of Bond ETFs

As I told you in my last post about the Oklahoma State ETF (OOK), the Texas State ETF launch was not far behind. Only a few days in fact. Today, OOK Advisors launched TXF on the NYSE Arca and as of right now it's trading around $36.

The new Texas ETF invests in securities that represent a benchmark index of large publicly traded companies that have their headquarters in Texas. As for the actual holdings in the new fund, they can be found on the TXF website as well as some other pertinent information.

So now that we have Texas and Oklahoma, how long until I can get a Pennsylvania ETF for my portfolio?

No, it's not a college football ETF, it's actually a state ETF...

OOK - The Oklahoma ETF tracks the SPADE Oklahoma Index, which consists of the major companies in that state.

The new fund launched yesterday and as I told you in an earlier blog post, a Texas state ETF (TXF) ain't far behind. So if this piques your interest or your portfolio, you might want to watch OOK and see how it reacts to different market conditions.

We love commodity ETFs around these parts, so we're excited to hear that ALPS has two new ones coming out...

• CRBA - the Jefferies TR/J CRB Global Agriculture Equity Index Fund
• CRBI - the Jefferies TR/J CRB Global Industrial Metals Equity Index Fund

CRBA will trade on the ARCA and track the Thomson Reuters/Jefferies CRB In-The-Ground Global Agriculture Equity Index. Stocks in the ETF and indexwill be involved in production and distribution of agricultural commodities and services.

CRBI will also trade on the ARCA and track the the Thomson Reuters/Jefferies CRB In-The-Ground Global Industrial Metals Equity Index. Stocks in this ETF and its underlying index, will be involved in the metal mining industry. Metals like aluminum and steel.

When it comes to commodity ETFs, we only have three words...keep 'em comin'.

Worried about rising inflation rates? How about hedging your investments and your assets against inflation with some ETFs.

IndexIQ, has just launched two new exchange traded funds to give investors a tool to protect against an increase in inflation. While the amount of tools to hedge inflation is still limited, IndexIQ is looking to change that. The goal of the new funds is to create an ROI higher than than the inflation rate.

1. CPI, the IQ CPI Inflation Hedged ETF, looks to create a higher ROI of inflation determined by changes in the Consumer Price Index.
2. GRES, the IQ ARB Global Resources ETF, on the other hand looks to beat inflation rates by utilizing commodities as its holdings.

ETFs that are comparable to to GRES would be CRBQ - the Thomas Reuters/Jefferies CRB Global Commodity Index Fund (just recently launched) and HAP - the Market Vectors RVE Hard Assets Producers ETF (about  a year old).

The new ETF innovations are a good fit for those who have concerns about inflation and for the ETF industry as a whole. The more creative Houses get with ETFs, the better for your investing arsenal.

For more information about the new ETFs, check out the page on IQ's website dedicated to these new ETFs.

Since I devoted my last post to Mega-cap ETFs, it's only fair that Micro-Cap Style ETFs get their fair share of press.

Unlike mega-cap stocks, which have a market-cap threshold of over $200 billion, there is no consensus of what determines a micro-cap stock. Some feel that a low stock price makes a security micro. Other opinions dictate that it is a company with a market capitalization in the millions, not the billions. The SEC makes companies with over $10 million in assets file reports, so some consider the micro-cap range to fall between $10 million and $1 billion (the top range for small-cap stocks).

While mega-cap stocks seem stable (with apologies to current events), micro-cap stocks...not so much. So when investing in a micro-cap ETF one has to realize that there is a risk of a company going under or getting de-listed for financial reasons. So there's a little more risk when it comes to micro-cap ETFs. Then again, with more risk comes more reward, since these types of companies have some upside potential.

If you want to consider this type of ETF for your portfolio, I'm here to help. Here are a few micro-cap ETFs for you to research...and please do conduct thorough research. These aren't your grand-pappy's ETFs.

• FDM - First Trust Dow Jones Select MicroCap ETF
• IWC - iShares Russell Microcap Index ETF
• PZI - PowerShares Zacks Micro Cap ETF

I've been talking a lot about investment style ETFs lately, which are sometimes created to track certain market capitalization securities and indexes. For example, there are small-cap ETFs, mid-cap ETFs, and large-cap ETFs. However, a new ETF innovation in the ETF world has been Mega-Cap style ETFs.

Just recently Barclays launched 3 new Mega-Cap ETFs to compete with those already created by Vanguard and PowerShares. Mega-cap stocks have a market capitalization of over $200 billion and are usually the big names in the stock world. For example, General Electric (GE) would be a mega-cap stock.

If you are an investor who wants to trade the big names in certain industries, then a mega-cap ETF may be a fit for your portfolio. You not only get the benefits of ETFs (like tax advantages), but you also gain instant exposure to multiple mega-cap companies with one transaction. If this sounds good to you, here are some of the more popular Mega-cap ETFs to consider...

• IWL - iShares Russell Top 200 Index ETF
• IWX - iShares Russell Top 200 Value Index ETF
• IWY - iShares Russell Top 200 Growth Index ETF
• MGC - Vanguard Mega Cap 300 ETF
• MGK - Vanguard Mega Cap 300 Growth ETF
• MGV - Vanguard Mega Cap 300  Value ETF
• PMA - PowerShares Active Mega Cap ETF

Earlier this month, Grail Advisors launched four new actively managed ETFs...

1. RFF is a financial industry ETF, managed by River Park Advisors, that includes securities in the financial sector.
2. RPQ is a technology industry ETF, also managed by River park, that targets the technology sector.
3. RPX  is a growth style ETF, again managed by River Park, that targets long-term growth securities in its holdings.
4. RWG is a large-cap growth ETF, managed by Wedgwood Partners, that targets large companies with above average growth potential.

GVT was Grail's first actively managed ETF, which was lanched in May. All of the ETFs will trade on the Arca and the holdings are disclosed on a daily basis.

If you are looking for an investment vehicle that combines the advantages of ETFs while eliminating some of the disadvantages of mutual funds, actively managed ETFs may be a fit for your investing strategy.

For more on the Battle of Funds, feel free to check out my article on ETFs vs. Mutual Funds.

I recently wrote an article focusing on the different types of style ETFs and along comes a new ETF that includes all three...

The new China ETF, YAO - the Claymore/AlphaShares China All-Cap ETF, not only gives investors exposure to the Chinese market, but also includes companies with varying market capitalization. There are small, mid, and large cap securities in the new fund. It's a great way to diversify a portfolio, gain exposure to emerging markets, or hedge China risk since it is a very broad Chinese Stock Market ETF.

The new foreign ETF will track the AlphaShares China All-Cap Index and as of the end of September, the index consisted of nearly 100 holdings. Large-cap stocks dominate over 50% of the index, while small-caps only represent 10%.

To see more China ETFs, look no further than our list of China ETFs. And we also have a list of emerging market ETFs if that is more to your liking.

Only a month old, the Dent Tactical ETF (DENT) is trading around $21 as of today. This new ETF is the first actively managed ETF of ETFs.

The logic behind the innovative ETF is that consumer spending is a very powerful economic driver. HS Dent Publishing analyzes consumer spending trends and uses that data to research its impact on our economy. The data is also used to forecast future consumer spending trends. Then the forecasts help the fund manager determine which ETFs should be targeted in the main ETF.

It is important that this ETF is actively managed since a portfolio manager would need to be consistently and actively rebalancing the ETF in order to capitalize on the trend data and be successful. In fact, a reshuffling could happen at any time. Also, the ETF will not be limited to just the US, countries like China and other emerging markets could be targeted as well.

New ETFs are always under scrutiny (look no further than leveraged ETFs) and should always be thoroughly researched before including them in you investing strategy. However, if you think this new fund may be a fit for your portfolio, you can find more information on the AdvisorShares web site.