Can investing small in Europe’s biggest economy be rewarding? Van Eck Global is going to find out with a new exchange traded fund — the Market Vectors Germany Small-Cap ETF (NYSE: GERJ) — that invests in Germany’s small cap stocks.
German stocks are on a tear, despite Europe’s sovereign debt woes. The iShares MSCI Germany Index Fund (NYSE: EWG) is already ahead by 10.36% in 2011 and 20.66% over the past one year.
As of early March, GERJ’s underlying index was comprised of 95 stocks with an average market size of $1.2 billion. The largest industry sectors are industrials, information technology and consumer discretionary.
A substantial portion of Germany’s economy consists of small companies with a history of dominating in specialized industry sectors like machine tools, auto parts, printing presses and electrical equipment. Many of these companies are significant exporters and have allowed Germany to maintain its share of world trade.
GERJ’s net annual expense ratio is 0.55%.
Inverse Treasury ETFs
In other news for ETF investors, ProShares unveiled two exchange traded funds that provide inverse exposure to the U.S. Treasury market.
The ProShares UltraShort 3-7 Year Treasury (NYSE: TBZ) provides inverse exposure to the 3-7 year segment of the U.S. Treasury market. TBZ seeks to provide -2x the daily performance of the Barclays Capital U.S. 3-7 Year Treasury Bond Index, before fees and expenses.
Along similar lines, the ProShares Short 7-10 Year Treasury (NYSE: TBX) seeks to provide opposite or inverse performance but to the Barclays Capital U.S. 7-10 Year Treasury Bond Index. TBX is a -1x product and does not use any leverage.
Both ProShares ETFs charge annual expense ratios of 0.95%.
Last week, Direxion Shares launched similar ETFs that attempt to profit when U.S. bonds and government Treasuries fall in value.
The Direxion Daily Total Bond Market Bear 1x Shares (NYSE: SAGG) aims for daily investment results, before fees and expenses, of 100% of the inverse or opposite of the price performance of the Barclay’s Capital U.S. Aggregate Bond Index.
The Direxion Daily 7-10 Year Treasury Bear 1x Shares (NYSE: TYNS) aims for daily investment results, before fees and expenses, of -100% of the inverse of the price performance of the NYSE 7-10 Year Treasury Bond Index.
Direxion Daily 20 Year Plus Treasury Bear 1x Shares (NYSE: TYBS) shoots for daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the price performance of the NYSE 20 Year Plus Treasury Bond Index.
The Direxion Shares ETFs charge annual expenses of 0.65%.
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