PDF Best ETFs For The Buck

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May, 2011



Best ETFs For The Buck

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Each month, ETF Channel sorts through more than 800 ETFs to find the leader in 12 categories with regard to the average expense ratio and average trailing twelve month return; the list of ETFs below highlight the funds from these categories with the largest TTM gain paired with the lowest expense ratio.

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According to the National Stock Exchange, in 2010, ETF industry assets have increased approximately 28% since December 2009 and for the full year of 2010, net cash inflows to ETFs totaled $119 billion. It is fair to say that ETFs are now on many investors' radar screens and learning more about these instruments is becoming increasingly important.

Two factors to consider while researching ETFs are the fund's expense ratio, and their track record. Because an ETF's expense ratio determines how much is subtracted from an ETF's assets each year, it is important to keep an eye on this number. If presented with two ETFs with identical holdings, and one ETF has an expense ratio of 0.25% while the other is 0.5%, investors would naturally gravitate toward the 0.25% to juice their returns.

Additionally, within each category, there are many ETFs, and some are very similar to each other. An example would be iShares Gold Trust (IAU) versus SPDR Gold Shares (GLD). While they are not perfectly identical, they are very similar.

GLD returned 29.27% in 2010 and IAU returned 29.42% over the same period. GLD has an expense ratio of 0.4%, while IAU is 0.25%. The difference in the return between IAU and GLD is 0.15%, the exact difference between the expense ratios (0.4% vs 0.25%). So, the investor who picked the ETF with the lowest expense ratio would have come out ahead.

TABLE OF CONTENTS

ASIA: iShares MSCI Hong Kong Index Fund

CURRENCIES: CurrencyShares Swiss Franc Trust

EMERGING MARKETS: iShares MSCI Indonesia Investable Market Index Fund

ENERGY: SPDR S&P Oil & Gas Exploration & Production ETF

EUROPE: iShares FTSE EPRA/NAREIT Developed Europe Index Fund

FINANCIAL: SPDR KBW Insurance ETF

HEALTH: SPDR S&P Biotech ETF

INCOME: WisdomTree Dividend ex-Financials Fund

INDUSTRIAL/MATERIALS: Vanguard Materials ETF

METALS: ETFS Physical Silver Shares

REAL ESTATE: iShares Cohen & Steers Realty Majors Index Fund

TECHNOLOGY: PowerShares NASDAQ Internet Portfolio

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Category

Asia

# of ETFs in Category

34

ETF

iShares MSCI Hong Kong Index Fund

Symbol

EWH

Average Expense Ratio In Category 0.57%

Expense Ratio

0.53%

Average TTM Return In Category +15.15%

Return (TTM)

+24.49%

The iShares MSCI Hong Kong Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Hong Kong market, as measured by the MSCI Hong Kong Index. 62.13% of this ETF's holdings are in Financials, followed by 12.30% in Consumer Discretionary, 11.60% in Utilities, 11.97% in Industrials, with the remainder in other sectors. Total net assets for the ETF are approximately $2 billion. The 12month yield as of 3/31/11 was 2.37%.

Category

# of ETFs in Category ETF Symbol Average Expense Ratio In Category Expense Ratio Average TTM Return In Category Return (TTM)

Currencies

19 CurrencyShares Swiss Franc Trust FXF 0.45%

0.40%

+10.20%

+23.58%

CurrencyShares Swiss Franc Trust is designed to track the price of the Swiss Franc net of Trust expenses, which are expected to be paid from interest earned on the deposited Swiss Francs. Total net assets for the ETF are $649,940,442.

Special Offer: Find out what Dave Moenning is holding in the ETF Channel Flexible Growth Investment Portfolio with a special 10% off coupon and 30 Days Free.

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Category

Emerging Markets

# of ETFs in Category

24

ETF

iShares MSCI Indonesia Investable Market Index Fund

Symbol

EIDO

Average Expense Ratio In Category 0.63%

Expense Ratio

0.61%

Average TTM Return In Category +16.56%

Return (TTM)

+44.83%

The iShares MSCI Indonesia Investable Market Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Indonesia Investable Market Index. The underlying index is designed to measure the performance of the top 99%, by market capitalization, of equities listed on stock exchanges in Indonesia. The ETF has total net assets of $197,007,377 and a 12 month yield of 0.50%. Top industries held: 32.03% Financials, 15.07% Energy, 12.95% Consumer Discretionary, 11.59% Consumer Staples, 9.02% Telecom.

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# of ETFs in Category ETF Symbol Average Expense Ratio In Category Expense Ratio Average TTM Return In Category Return (TTM)

Energy

27 SPDR S&P Oil & Gas Exploration & Production XOP 0.51%

0.35%

+31.46%

+41.19%

The SPDR S&P Oil & Gas Exploration & Production ETF seeks to replicate as closely as possible, before expenses, the total return performance of the S&P Oil & Gas Exploration & Production Select Industry Index. This ETF has total net assets of $1.19 billion. Currently the top holding is W & T Offshore Inc, followed by Gulfport Energy Corp, and Stone Energy Corp.

Special Offer: Find out what Dave Moenning is holding in the ETF Channel Flexible Growth Investment Portfolio with a special 10% off coupon and 30 Days Free.

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Category

# of ETFs in Category

ETF

Symbol Average Expense Ratio In Category Expense Ratio Average TTM Return In Category Return (TTM)

Europe

24 iShares FTSE EPRA/NAREIT Europe Index Fund IFEU

0.49%

0.48%

+24.58%

+29.08%

Developed

The iShares FTSE EPRA/NAREIT Developed Europe Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE EPRA/NAREIT Developed Europe Index. The index looks at the stock performance of companies that own or develop European real estate. The ETF has total net assets of $21,042,368. Largest holdings include UNIBAIL-RODAMCO SE, LAND SECURITIES GROUP PLC, and BRITISH LAND CO PLC.

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