Northern Trust's Single-Country ETFs Based on 'Flagship' Indexes

Following the footsteps of Barclays, State Street and Vanguard Group, the Chicago-based Northern Trust became the latest financial services giant to enter the rapidly growing world of ETF (Exchange Traded Fund).

Northern Trust came up with offerings that follow locally recognized indexes for foreign markets such as the U.K, Japan and Germany. Several other funds are in registration, including broader international-stock ETFs and real-estate portfolios.

Northern Trust's strategy for its first ETFs is to go with whichever local indexes are best-known (the 'flagship' index) among investors in a particular country, much like the Dow Jones Industrial Average is for USA. Northern Trust, as of last Friday, managed a dozen Northern Exchange Traded Shares, or Nets, such as Nets DAX for Germany (DAX), Nets CAC 40 for France (FRC) and Nets FTSE 100 for the U.K. (LDN) and Nets Topix (TYI) for Japan. The company has filed for more individual country funds, like Portugal and Israel.

Although less diversified than other international ETFs, single-country ETFs are usually diversified by companies and sectors within that country. Investors seeking targeted exposure to specific countries or customized portfolios of groups of countries may find such ETFs as attractive investment vehicles.

It would be interesting to observe how the new ETFs of Northern Trust would fare in what is already a packed field dominated, in particular, by Barclays Global Investors with its own family of iShare series of ETFs tied to single-country benchmarks, most of which are already quite popular with investors.

Dow Reclaims 13000 but Exxon and Gold Disappoint

After about 4 months, Dow Jones Industrial Average reclaimed its territory above the 13000 level. In the mean time, it had fallen to as low as 11,508.74 on January 22nd.

Of the Dow's 30 components, 25 posted gains today, with financials and technology stocks leading the charge. The ability to borrow from the Fed is the catalyst which is allowing capital to flow back into financial stocks.

But investors in Energy sector were disappointed today with less-than-expected result from Exxon Mobil. While the results were 17% better than a year ago, Exxon failed to match its previous record, fell short of Wall Street's expectations, and was punished with a 4% drop in its stock.

Another sector, precious metals, lost its luster today with the return of strength in dollar. Gold futures fell more than 1% Thursday, as a rise in the U.S. dollar dampened investment demand for the precious metal. Gold for June delivery dropped $14.20, or 1.6%, to settle at $850.90 an ounce on the New York Mercantile Exchange. Gold may continue to remain at risk to further corrections in coming weeks.