These new ETFs cater to investor hopes

Article Excerpt

The best ETFs generally provide cheap, well-diversified investment vehicles for long-term investors. However, to capitalize on short-term investor fads or perceptions, many ETF providers continue to launch “innovative” new funds. DIREXION MSCI EMERGING OVER DEVELOPED MARKET ETF $52.30 (New York symbol RWED) lets investors bet on the outperformance of emerging markets compared to developed markets. The ETF replicates the long positions (stocks that will go up) of the MSCI Emerging Markets Index and short postions (stocks that will go down) of the MSCI EAFE IMI Index. To add to the potential for gains, the long positions aim to expand by 150% more than the value of the underlying stocks. The strategy’s short positions try to heighten those gains. Essentially, what this all means is that if emerging markets rise, while developed markets fall, the ETF will greatly outperform an ETF holding only emerging market stocks. On the other hand, if emerging markets fall, and developed markets rise, the ETF will underperform the…