ishares

ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $32.17 (New York symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange.

The fund’s top holdings are China Mobile, 10.3%; China Construction Bank, 8.4%; Industrial & Commercial Bank, 7.6%; CNOOC, 7.0%; Bank of China, 5.9%; China Telecom, 4.8%; China Unicom (Hong Kong), 4.6%; China Life Insurance, 4.6%; China Shenhua, 4.3%; and China Petroleum and Chemical, 4.0%.

The fund’s holdings give it the following industry breakdown: Financials, 53.1%; Telecommunications, 19.7%; Oil and Gas, 14.6%; Basic Materials, 9.8%; and Industrials, 1.9%. Its expense ratio is 0.72%.

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ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $32.17 (New York symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange. The fund’s top holdings are China Mobile, 10.3%; China Construction Bank, 8.4%; Industrial & Commercial Bank, 7.6%; CNOOC, 7.0%; Bank of China, 5.9%; China Telecom, 4.8%; China Unicom (Hong Kong), 4.6%; China Life Insurance, 4.6%; China Shenhua, 4.3%; and China Petroleum and Chemical, 4.0%. The fund’s holdings give it the following industry breakdown: Financials, 53.1%; Telecommunications, 19.7%; Oil and Gas, 14.6%; Basic Materials, 9.8%; and Industrials, 1.9%. Its expense ratio is 0.72%....

In September 2011, gold hit an all-time high of $1,900.30 U.S. an ounce. It now trades at around $1,700.80. Silver rose to an all-time high in April 2011, when it reached $49.76 U.S. an ounce. It has since pulled back to today’s price of $32.63. Gold and silver could well regain their highs and move up even further over the longer term, although they will likely remain volatile. Higher prices would arise from investor fears that inflation or global political and economic instability will hurt key currencies, such as the euro or the U.S. dollar. If you want to hold a number of gold or silver stocks, these two exchange traded funds offer top-quality global miners and low fees....

ISHARES DEX UNIVERSE BOND INDEX FUND $31.62 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 664 bonds in the portfolio have an average term to maturity of 9.81 years. The fund’s MER is 0.33%.

The bonds in the index are 69.6% government and 30.4% corporate.

The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.8%. Its yield-to-maturity is 2.27%, 0.67% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.

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ISHARES DEX SHORT-TERM BOND INDEX FUND $28.99 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index.

This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 326 bonds with an average term to maturity of 2.90 years. The bonds in the index are 66.0% government and 34.0% corporate. The fund’s MER is 0.28%.

iShares DEX Short-Term Bond Index Fund yields 2.8%. However, this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. But as a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.

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ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $23.74 (New York symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 72.3%; Poland, 17.1%; Czech Republic, 3.7%; and Hungary, 3.5%.

The fund’s top holdings are Gazprom (Russia: gas utility), 18.1%; Lukoil (Russia: oil), 10.2%; Sberbank (Russia: bank), 8.6%; Novatek (Russia: natural gas), 3.8%; Mobile TeleSystems (Russia: wireless), 3.5%; Tafneft (Russia: oil and gas), 3.1%; Magnit OJSC (Russia: retailing), 3.0%; Rosneft Oil Company (Russia: oil and gas), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; and PKO Bank Polski SA (Poland: banking), 2.2%.

iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.

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ISHARES S&P INDIA NIFTY 50 INDEX FUND $21.48 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) is an ETF that aims to track the S&P CNX Nifty Index, which represents the 50 largest, most liquid Indian securities.

The fund’s top holdings are ITC Ltd. (conglomerate), 8.6%; Reliance Industries Ltd. (conglomerate), 7.5%; ICICI Bank, 6.9%; HDFC Bank, 6.6%; Infosys Technologies (software), 6.6%; Housing Development Finance, 6.3%; Larsen & Toubro Ltd. (conglomerate), 4.5%; Tata Consultancy Services (information technology), 3.9%; and State Bank of India, 3.3%.

The fund’s industry breakdown includes Banks, 19.8%; Computers, 13.3%; Cigarettes, 8.5%; Refineries, 8.1%; Housing, 5.9%; Automobiles, 5.5%; Engineering, 4.6%; Pharmaceuticals, 4.3%; Electricity, 3.8%; and Oil Exploration/Production, 3.8%. The ETF has an expense ratio of 0.89%.

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ISHARES CDN REIT SECTOR INDEX FUND $17.25 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are 0.55% of its assets. The fund yields 4.3%.

RioCan REIT is the fund’s largest holding at 22.0%, followed by H&R REIT (12.2%), Dundee REIT (8.9%), Canadian REIT (7.7%), Calloway REIT (7.5%), Boardwalk REIT (6.8%), Cominar REIT (6.4%), Canadian Apartment Properties REIT (6.2%), Primaris Retail REIT (5.7%), Artis REIT (5.0%), Allied Properties REIT (4.5%), Chartwell Seniors Housing REIT (2.9%), and Northern Property REIT (2.8%).

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Our view is that virtually all Canadian investors could add some foreign exchange traded funds (ETFs), such as those we recommend in Canadian Wealth Advisor, in reasonable quantities: perhaps 10% of your holdings if you are a conservative investor (including 5% or so in higher-risk funds, such as emerging market ETFs). That includes the iShares FTSE/Xinhua China 25 ETF, $34.46, symbol FXI on New York (Shares outstanding: 135.6 million; Market cap: $4.7 billion), and the Vanguard Emerging Markets ETF, $41.35, symbol VWO on New York (Shares outstanding: 1.3 billion; Market cap: $53.8 billion). Canadian Wealth Advisor views both of these funds as buys. The Vanguard MSCI EAFE ETF, $33.00, symbol VEA on New York (Shares outstanding: 266.0 million; Market cap: $8.8 billion), invests in the developed markets of the 16 European (64% of assets) and five Pacific Rim countries (36%) included in the MSCI EAFE Index....

ISHARES CDN REIT SECTOR INDEX FUND $17.25 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of the ETF’s value. iShares CDN REIT’s expenses are 0.55% of its assets. The fund yields 4.3%. RioCan REIT is the fund’s largest holding at 22.0%, followed by H&R REIT (12.2%), Dundee REIT (8.9%), Canadian REIT (7.7%), Calloway REIT (7.5%), Boardwalk REIT (6.8%), Cominar REIT (6.4%), Canadian Apartment Properties REIT (6.2%), Primaris Retail REIT (5.7%), Artis REIT (5.0%), Allied Properties REIT (4.5%), Chartwell Seniors Housing REIT (2.9%), and Northern Property REIT (2.8%)....