Since we discussed the performance of ETFs in 2008 in the last blog post, I thought it only fitting to see what's in store for exchange traded funds in 2009. Here are some the newly slated or "coming soon" ETFs for this year.
IGOV is a bond ETF that holds long-term bonds with maturities of up to 25 years, while ISHG is a bond ETF that holds short-term bonds with maturities of one to three years.
Both funds track the Chicago Board of Options (CBOE) Volatility Index (VIX). The VIX is a measurement of the volatility of securities. How much a stock moves over a certain time period. The higher the VIX, the more movement in securities. Usually the VIX is a contrarian to the overall market. When the market declines, the VIX tends to rise, so people consider it a "fear" index. The VIX is a heavy indicator of the volatility of ETF options (and options in general) and a large factor in determining their price.
State Street Global Advisors also launched two new bond ETFs. MBG purchases investment grade mortgage bonds with a credit rating of AAA to Aaa, while the BWX tracks the Capital 1-3 Year Global Treasury ex-US Capped Index.
RevenueShares' new ETF consists of stocks with sales and operating growth, strong earnings indicators, and positive financial indicators like return on equity (ROE) and free cash flow (FCF). Some of the notable securities in the fund are McDonald's (MCD), Union Pacific (UNP) and Hess (HES).
So while the market lost some ETFs in 2008, that is not stopping new ETFs from sprouting up in the new year. The number of ETFs has increased each year since their inception and the trend looks to continue in 2009.