ETFs and Vancouver

We got to Vancouver yesterday where I will be giving a presentation Wednesday on portfolio construction with specialized ETFs to a couple of crickets chirping and maybe a tumbleweed rolling through the hall.

Without frontrunning the presentation what I generally did was go sector by sector and select funds that capture various themes within each of the sectors. I assembled a spreadsheet that my assistant then put into a powerpoint presentation. I put off giving her the spreadsheet as long as possible because I knew there would be potentially new product out that could contribute to the presentation.

I've mentioned the PowerShares Small Cap Sector funds. They should be out on Wednesday. The symbols will be the same as the SPDR Sector ETFs with an S added at the end. So the PowerShares Small Cap Financial ETF will have the symbol XLFS. Some of them could be sort of similar to existing niche funds. For example I think of the PowerShares Water ETF (PHO), which clients and I own, as capturing small cap industrial stocks. The market cap of PHO may be larger than XLIS but it is certainly much smaller than XLI. Maybe PHO should be mid cap industrial exposure?

Although a long way from listing, GlobalX has filed for Brazilian sector funds as a complement, no doubt, to the China sector funds. Some will think these are useless but if you make the effort to really learn about a country's investment merits you are bound to draw some conclusions about what parts of the economy make more sense to own and which parts are better to avoid.

I seriously doubt too many people are going to conclude I gotta own me some Chinese financials after a detailed study of the country (talking investors as opposed to traders) and so the iShares FTSE China 25 (FXI), which is the most popular, becomes a lot less appealing. And if individual stocks are not right for someone but they know they want to avoid financials they've got to think about narrow ETFs. This applies to all sorts of spaces which is why I think (obvious statement perhaps) there is going to be a place for these funds.

Maybe we will see a Norwegian fishery stock ETF and a Ukrainian farm stock ETF after all. We'll see.

A couple of observations about Vancouver; it is expensive, wow. We are paying out the ying-yang for parking and internet access in the room. Really, wow.

We are a couple of blocks from a popular shopping area (Robson St. for people who know the area) and unlike in the US there is very little that is on sale and stuff is very pricey. All my wife could find was a pair of hiking gloves that were on sale for around $20 (that's it only five more days, LOL). Candidly Joellyn was shocked at how expensive stuff is. Canada has generally fared better than the US but it is far from trouble-free and there are still risks (do a search for what Simon Johnson has to say about the banks) but as expensive as things were, the stores were packed.

The two pictures are from the same area near our hotel. We haven't even done anything or gone anywhere and the scenery is awesome (notice the seaplane taking off in the first picture).