ETF Expert

In 2007, several hundred new exchange-traded vehicles hit the U.S. Some lived up to the expectations from the get-go. For instance, the Market Vectors Agribusiness ETF (MOO) tracked the DAXglobal Agribusiness Index successfully AND made a pretty penny.

(Read more about "MOO" in my recent review.)

Still, there have been a wide variety of new investments that failed to live up to the hype. The worst may have been the Claymore/SWM Canadian Energy Income Fund (ENY).

ENY was supposed to be a sure-fire winner in the energy arena. It had been designed to provide capital appreciation in Canadian oil royalty trusts. Meanwhile, diversification across dozens of "CANROYs" would lower the risk associated with both the commodity and exposure to a single entity. What’s more, one could look forward to some level of income from the royalty stream.

Talk about disappointment! For starters, ENY was plenty volatile, dropping more than 20% on more than one occasion. Secondly, whereas the United States Oil (USO) Fund rose nearly 40% with the price of crude over the last 6 months, the Claymore/SWM Canadian Energy Income Fund (ENY) provided virtually "nada."

Here’s another distressing reality: Income-oriented investors typically expect monthly, quarterly or semi-annual payouts. The Claymore/SWM Canadian Energy Income Fund (ENY) distributes on an annual basis.

Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.