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Currency-Hedged ETF Magic: A Less-Known Benefit

Posted on 23 June 2015 by VRS  |  Email |Print

The jury’s out on currency-hedged international ETFs. They won admirers by hauling in outsize profits this past year as stimulus measures drove down the euro and yen vs. the dollar, which hurt nonhedged portfolios. Now it’s the skeptics’ turn.
The greenback’s movements are cyclical, they say, and its rally may already be starting to lose steam. Morningstar analyst Patricia Oey recently analyzed the U.S. dollar’s performance over the past 40 years and its impact on portfolios. She found hedging currency risk provided little real long-term benefit………………………………………..Full Article: Source

SEC wants input on ETPs

Posted on 22 June 2015 by VRS  |  Email |Print

The SEC wants to hear from you — this time on an investment vehicle most financial advisers hold near and dear: exchange-traded products. The agency solicited input earlier this month on the way it approves new, novel or complex ETPs.
As reporter Mark Schoeff Jr. reports in this issue, the request for comment included 53 sets of questions touching on market pricing, legal exemptions and listing standards. Perhaps more importantly, the request delved into how brokers sell ETPs to clients — and to what extent investors really understand what they’re buying………………………………………..Full Article: Source

‘Easy-to-understand’ fact guide could be on the way for ETF investors

Posted on 19 June 2015 by VRS  |  Email |Print

In an effort to provide greater consistency between mutual funds and exchange-traded funds, Canadian regulators are proposing documents delivered to ETF investors provide more “easy-to-understand” information. In a proposed amendment that has been published for industry comment, the Canadian Securities Administrators (CSA) is suggesting that ETFs produce and file a summary disclosure document called “ETF Facts,” similar to what the mutual-fund industry introduced in 2011.
Comparable to the mutual fund “Fund Fact” document, ETF Facts would be delivered to investors in plain language and be no more than two pages double-sided. The document would highlight key information that has been identified by the CSA as important to investors such as risks, past performance and the costs of investing in an ETF………………………………………..Full Article: Source

Assets under gold ETF decline 14% in one year, 35% in last 3 years

Posted on 19 June 2015 by VRS  |  Email |Print

The assets under management of gold ETF have declined by 14% in the last one year, and 35% in the last three years. As per the latest data, the AUM of the gold ETF category stood at Rs 6,688 crore (as of May 2015). The gold ETF category has seen net outflows consecutively for the last 24 months with a total net outflow of Rs 3,893 crore.
Gold as an asset class has witnessed decline in its performance over the last three years, given the significant correction seen in prices of the precious metal. In the last one year period ended June 05, 2015, gold price in rupee terms has remained almost unchanged, while in USD term, it has lost 7.02 per cent………………………………………..Full Article: Source

Top 5 ETFs on Morningstar

Posted on 18 June 2015 by VRS  |  Email |Print

Which exchange-traded funds are Morningstar readers interested in this month? Topping the charts are developed market equity funds - with a bias towards income strategies. 1. Vanguard FTSE All-World UCITS ETF (VWRL) This Fund seeks to provide long-term growth of capital by tracking the performance of the FTSE All-World Index, a market-capitalisation weighted index of common stocks of large and mid cap companies in developed and emerging countries.
Vanguard FTSE 100 UCITS ETF (VUKE) The fund provides broad exposure to large cap UK equities and can be used as a core holding, says Morningstar passive fund analyst Hortense Bioy. Investing in this well-diversified fund could appeal to those looking to build a UK-centric portfolio. However, investors should carefully examine the index’s composition………………………………………..Full Article: Source

Pressure Keeps Building on Miners ETFs

Posted on 18 June 2015 by VRS  |  Email |Print

Global miner stocks and sector-related exchange traded funds have suffered a huge blow and could continue to struggle on a weak commodities outlook. The SPDR Metals & Mining ETF has declined 14.9% year-to-date and plunged 34.2% over the past year. Meanwhile, the iShares MSCI Global Metals & Mining Producers ETF dipped 2.8% so far this year and fell 20.6% over the past year.
The world’s largest miners have lost $156 billion in market value last year and may experience a hard uphill battle ahead as a downturn in resource prices and lower demand out of China keep pressure on commodities, reports Nyshka Chandran for CNBC………………………………………..Full Article: Source

Gold Prices Poised for Better Q3 After Tepid Q2

Posted on 17 June 2015 by VRS  |  Email |Print

As far as gold prices are concerned, the second quarter of 2015 so far has been the least volatile quarter the commodity has seen since mid-2007… before gold dished out an eye-popping three-year, 150% gain and a subsequent 38% tumble in the meantime.
Gold Prices Poised for Better Q3 After Tepid Q2In fact, as of today the price of the SPDR Gold Trust ETF (GLD) is within 30 cents of where it ended the first quarter of the year. And yet, traders can still sense there’s something brewing on the gold price front. The question is, which direction is that undertow pointed? That depends on a handful of factors, the least of which — ironically — is the current momentum (or lack thereof) in gold prices………………………………………..Full Article: Source

Silver ETFs May Be a Better Precious Metals Play

Posted on 17 June 2015 by VRS  |  Email |Print

Investors who are thinking about a precious metal position may want to take a look at silver bullion and related exchange traded funds as an alternative to gold. However, the metals may face short-term risk in a rising rate environment.
Year-to-date, the iShares Silver Trust rose 1.3%, ETFS Physical Silver Shares gained 1.7% and PowerShares DB Silver Fund increased returned 0.9%. In contrast, the SPDR Gold Shares dipped 0.3% so far this year. COMEX silver futures are now trading at about $16.1 per ounce………………………………………..Full Article: Source

Currency shocks have mom and pop giving hedged ETFs record cash

Posted on 17 June 2015 by VRS  |  Email |Print

On a recent flight, Susanne Alexandor saw an advertisement for currency-hedged exchange-traded funds. The promotion on the seat in front of her highlighted just how aggressively these strategies are being marketed to the masses.
“They are incredibly appealing for the retail space because the retail investor can separate out the market decision from the currency decision,” said Ms. Alexandor, a Toronto-based senior member of the investment team at Cougar Global Investments Ltd., which has about $1.5-billion (U.S.) in assets under management and advisory for clients including high net-worth individuals………………………………………..Full Article: Source

The Unique Case For Small Cap ETFs

Posted on 17 June 2015 by VRS  |  Email |Print

As we near the midpoint of 2015, gains in the vast majority of diversified stock indices have been tepid at best. The SPDR S&P 500 ETF (SPY) is clinging to a total return of just 2% and has been jostling sideways in a narrow trading range over the last four months. This slowing price action in large cap stocks may trigger a search for other diversified ETF opportunities demonstrating more attractive technical momentum.
One corner of the market that has been showing better relative strength this year has been small cap stocks. The iShares Russell 2000 ETF (IWM) has $29.6 billion dedicated to 2000 companies with market capitalizations less than $2 billion. IWM is dominated by top sector weightings in financial, technology, and health care companies………………………………………..Full Article: Source

Investors warned not to engage in ETF performance chasing

Posted on 17 June 2015 by VRS  |  Email |Print

While the exchange traded funds (ETF) market may be booming investors are being warned to not chase market performance as international ETFs have received significant inflows off the back of recent performance.
In a market report, compiled by automated investment adviser and fund manager Stockspot, international share ETFs have overtaken Australian share ETFs as the largest sector in the exchange traded space adding 13 of the 17 new ETFs released in the past year. At the same time the international share ETFs sector has grown by 95 per cent for the year to $6.9 billion of funds under management, compared with $5.09 billion for Australian share ETFs, with the average international ETF return up 28 per cent over the past 12 months………………………………………..Full Article: Source

Precious Metal ETFs to Hedge Market Volatility

Posted on 16 June 2015 by VRS  |  Email |Print

With the fixed-income and equities markets swinging, investors may turn to precious metals exchange traded fund to hedge increased volatility. “It would be wrong to conclude that the outlook for the gold market over the remainder of 2015 and beyond depends solely on the evolution of U.S. monetary policy, and that Fed tightening can only mean lower prices,” head of commodities research at Capital economics, Julian Jessop, said on CNBC.
“What’s more, even over briefer periods, safe-haven demand and buying from key emerging markets can more than offset headwinds from developments in the U.S.” Moreover, Jessop argued that gold demand could rise as investors hedge inflationary pressures and the Russian central bank bolsters its bullion stores to diversify away from U.S. dollars………………………………………..Full Article: Source

4 Actively Managed ETFs With Reasonable Fees

Posted on 15 June 2015 by VRS  |  Email |Print

There are two big lines of contention with actively managed ETFs that can generally be boiled down to fees and performance. All things being equal, active ETFs are typically more expensive than their passive index counterparts. This is primarily due to the ongoing research, security selection, and overall maintenance of the fund.
The manager expects to be paid for their expertise, which takes considerably more effort to implement than a computer tracking a steady basket of stocks with little turnover. High fees are particularly egregious when actively managed funds underperform their benchmark or experience spotty track records………………………………………..Full Article: Source

Money-making opportunities in gold

Posted on 15 June 2015 by VRS  |  Email |Print

Gold prices have been weak for many weeks now. But if you are an Indian investor, there are still a couple of money-making opportunities in bullion. One, gold ETFs in India are now trading at a discount to their NAVs, on the stock exchanges. Market prices have dropped as there is not much demand for paper gold from investors.
Therefore, if you buy gold ETF units on a stock exchange platform, you may get to pocket some extra returns if the above discounts close over time. Though gold prices may be weak in the short to medium term, gold ETFs can help you diversify portfolio risk………………………………………..Full Article: Source

Gold price back in negative territory, ETF outflows continue

Posted on 12 June 2015 by VRS  |  Email |Print

Gold nudged lower on Thursday morning, with a stronger dollar ruling out a fourth day of consecutive gains – so far. The spot gold price of $1,180.50/1,181.30 per ounce was down $4.80 on Wednesday’s close – it has been confined to an intraday range of $8.
“The brief rally on precious metals over the last few days seems to have fizzled out now,” Marex Spectron’s David Govett said. “The move was down to two factors, an overly short market and a weaker dollar.” After hitting its lowest since May 18 on Wednesday, the dollar has recovered to 1.1251 against the euro this morning, with the dollar index up nearly 0.6 percent at 95.18. ……………………………………….Full Article: Source

Checking in With Gold Miners ETFs

Posted on 12 June 2015 by VRS  |  Email |Print

Rising interest rates are believed to be a death knell for gold, but the SPDR Gold Shares is up 2.7% over the past 90 days, a period in which 10-year Treasury yields have surged 17.5%.
Although GLD and its gold ETF brethren have defied interest rate logic, investors are not waiting around to see how long that trend will last. GLD has lost more than $26 million in assets under management this year, but second-quarter departures from the fund total $1.2 billion, enough to knock GLD from the ranks of the 10 largest ETFs………………………………………..Full Article: Source

ETFs Having Another Strong Year as World Economy Improves

Posted on 12 June 2015 by VRS  |  Email |Print

Exchange-traded funds are on track for another strong year, with year-to-date inflows totaling $72.5 billion. This year’s inflows, which have pushed industry assets to more than $2.12 trillion, are more than simply about investors fearful of single stock risk, said David Mazza, head of research at SPDR ETFs and SSgA Funds at State Street Global Advisors.
“It’s also just the growth of the ETF industry,” said Mazza. “It continues because of the diversification benefits,” including liquidity and transparency, offered by buying these bundles of stocks that track particular indexes or sectors………………………………………..Full Article: Source

ETF Securities Precious Metals Monthly

Posted on 11 June 2015 by VRS  |  Email |Print

Led by silver, divergent strength remains the 2015 story in the precious metals (PMs) market. Divergent, because gold and silver have remained resilient in an environment that many analysts would consider bearish.
In terms of the Euro currency, year-to-date (YTD) gold ended May with a gain of 10.6%, emphasizing the currency influence effect of many central banks increasing liquidity. Gold and silver are likely building a foundation for recovery. The question most investors appear to be asking is what catalyst(s) might be necessary for the PMs to rally, or falter? The consensus is the Federal Reserve (Fed) will be tightening soon. ……………………………………….Full Article: Source

4 Sector ETFs Outperforming in 2015

Posted on 11 June 2015 by VRS  |  Email |Print

The broader U.S. market indices might have hit multi-year highs on several occasions this year, but are finding it hard to hold on to those gains. A mountain of woes including rate hike speculations, strength in the greenback, volatility in energy prices, seasonal slowdown in Q1 and global growth worries held back the broader market indices from shooting.
To be clear, this year, the developed market caught investor attention due to a flurry of easy money. The S&P 500 has added over 1% so far this year (as of June 8, 2015) while Dow Jones Industrial Average slipped into the negative territory. Though rate hike talks have been doing rounds for long, better-than-expected job data for May intensified the hearsay………………………………………..Full Article: Source

State Street Starts Currency-Hedged ETF to Attract Money

Posted on 11 June 2015 by VRS  |  Email |Print

State Street Corp., which opened the first U.S. exchange-traded fund in 1993, is starting its first currency-hedged ETF, following similar offerings from firms including WisdomTree Investments Inc.
The firm’s SPDR EURO STOXX 50 Currency Hedged ETF, which started trading Wednesday, tracks the performance of large-cap stocks in the euro region while seeking to minimize currency fluctuations, the Boston-based firm said in a statement………………………………………..Full Article: Source

Europe ETFs are Plunging: Almost Time to Buy?

Posted on 10 June 2015 by VRS  |  Email |Print

European stocks, this year’s consensus bet to best the U.S. market, fell for the sixth session in a row on Tuesday, hitting a raft of Europe-themed exchange-traded funds. Declines have been swift. Germany’s benchmark DAX index on Monday fell into a so-called correction, meaning a decline of more than 10% from its recent high.
Losses piled up on Tuesday, with the recently launched Recon Capital DAX Germany exchange-traded fund (DAX) sinking another 0.7% in recent trading. The Dax-tracking ETF now lost 8% since April. Currency-hedged Europe ETFs, recipients of staggering inflows and strong performance of late, have been buffeted in recent weeks. Currency-hedged ETFs negate swings in the euro, while unhedged ETFs benefit from a stronger euro and suffer when the euro weakens………………………………………..Full Article: Source

Can Emerging Market ETFs Defy U.S. Rates Hike?

Posted on 10 June 2015 by VRS  |  Email |Print

With solid May job numbers, the prospect of the U.S. rates hike is now getting closer to as early as September instead of a later period as many had expected. This has raised worries over the emerging markets, which was the worst hit by the taper tantrum of 2013 that resulted in a huge capital flight.
The end of a cheap and an abundant dollar era would pull out capital from these markets, creating trouble for most emerging nations. The impact of this is already being felt as the emerging market stocks fell for the twelfth day in a row on Tuesday, representing the longest slump since 1990. Indonesia, the Philippines, Thailand, Taiwan and Turkey are being hammered badly……………………………………….Full Article: Source

Gold ETP holdings hit new 6-year low; silver resilient

Posted on 09 June 2015 by VRS  |  Email |Print

Investors have cut total holdings in exchange-traded products backed by physical gold to a new six-year low following five consecutive weeks of selling. Silver is showing sign of resilience despite the recent price weakness while platinum and palladium have seen reductions albeit on a rather small scale compared to the price weakness seen.
During the first week of June investors continued for a fifth consecutive week to reduce exposure to gold through exchange-traded products. During this time some 35 tonnes have been cut resulting in the total holdings dropping back below 1600 tonnes for only the second time since April 2009………………………………………..Full Article: Source

Global Miner ETFs: Falling Commodities Prices Weigh on Dividend Policies

Posted on 09 June 2015 by VRS  |  Email |Print

The drop in commodities prices is putting pressure on global miners exchange traded funds, and the sector could be in for more trouble ahead as tightening balance sheets force some companies to rethink their dividend policies. PricewaterhouseCoopers warned that miners are “walking a fine line” in their dividend policies as revenue streams dry up in light of falling commodities prices, reports James Wilson for the Financial Times.
The largest miners, especially BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO), aim for stable or rising dividends to attract investors. However, the top 40 miners’ dividend coverage, or earnings per share divided by dividends per share, was just 1.1 times, which was worst than in 2013 when miners had to borrow to pay investors, according to PwC………………………………………..Full Article: Source

Second Wave of ‘Smart Beta’ ETFs Is Coming

Posted on 09 June 2015 by VRS  |  Email |Print

Just when you thought you finally had “smart beta” exchange-traded funds figured out, along comes Smart Beta 2.0. The fund industry’s launch of these supposedly “smarter” ETFs may have come at a good time. That’s because a recent study of smart-beta funds—which generally weight their holdings by something other than market capitalization—raises questions about whether their past performance was due to “smarts” or mere coincidence.
In April, Denys Glushkov, a research director at the University of Pennsylvania’s Wharton Research Data Services, released the first draft of a paper titled “How Smart are ‘Smart Beta’ ETFs?” After evaluating 164 U.S.-stock ETFs over the 10 years ended in 2014, he concluded that these funds haven’t offered enough outperformance to justify their often-higher fees………………………………………..Full Article: Source

ETFs: $3 Trillion is Nice, but $6 Trillion is Better

Posted on 09 June 2015 by VRS  |  Email |Print

The global exchange traded products industry recently celebrated another milestone, that being reaching $3 trillion in combined assets under management at the end of May. Goldman Sachs sees that figure doubling and doing so by 2020. Josh Brown of Reformed Broker fame posted Goldman’s ETF outlook Monday and the report includes sound reasoning for why the ETF industry’s rapid growth will continue at an accelerated clip.
“We think ETFs will continue to see robust asset gathering (15% ann. over last 3 yrs), above and beyond the passive vs. active debate,” said Goldman. “Specifically, we expect ETFs to continue growing at an 12%-13% organic rate, likely doubling in AuM to +$6tn by 2020 amidst rapid growth in RIA, roll-over of 401(k) into IRAs, increasing use of auto-allocation products, regulatory push into lower-cost products, geographic expansion, and innovation.”……………………………………….Full Article: Source

Can El Nino Boost Agricultural ETFs?

Posted on 09 June 2015 by VRS  |  Email |Print

El Niño, a warm-water phenomenon that blows up off the Pacific coast of South America, often has a great impact on agricultural prices. El Nino causes weather disruptions in many regions around the world, including drought in some and flooding in others due to abnormal warming of the Pacific Ocean.
The world has stepped into an El Niño cycle this year after a long pause of about five years and might end up seeing an upturn in the commodity investing markets, especially agriculture. Experts pointed out that this year, El Nino is not only strong; it is likely to be relatively long-standing too. In countries like India, this adverse climate will likely persist through the rainy season, which is all important for agricultural production………………………………………..Full Article: Source

Commodity ETFs Provide Diversification and Protect Against Inflation

Posted on 08 June 2015 by VRS  |  Email |Print

Commodities and related exchange traded funds have underperformed equities and fixed-income markets over the past few years, but investors should not ignore the benefits of including some exposure to diversify their portfolios.
The broad commodities market has been falling behind. Year-to-date, the GreenHaven Continuous Commodity Index Fund dipped 4.8%, PowerShares DB Commodity Index Tracking Fund fell 4.3%, iPath Dow Jones-UBS Commodity Index Total Return ETN declined 4.4% and iShares GSCI Commodity-Indexed Trust was down 2.6%………………………………………..Full Article: Source

A week in gold: Gold’s largest ETF falls out of top 10 by size

Posted on 08 June 2015 by VRS  |  Email |Print

Assets peaked at US$77.5bn in August 2011 but the gold price has since fallen 40%, trading at US$1,167. SPDR Gold, the world’s largest gold exchange traded fund (ETF), has fallen out of the top 10 by size after outflows in May reached US$902mln.
The fund, which was once the biggest ETF in the world, has US$28bn worth of assets under management (AUM), meaning the drop represents more than 3% of its assets. An ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund………………………………………..Full Article: Source

Gold ETFs record outflow for 24th straight month in May

Posted on 08 June 2015 by VRS  |  Email |Print

Gold exchange traded funds (ETFs) have been weighed down by net outflows since a considerable period of time now. Negative sentiments continued to prevail in May 2015 as well due to the yellow metal’s tepid performance.
The category’s AUM fell 1.9 per cent to Rs 6,688 crore — its lowest level since July 2011 (Rs 6119 crore), according to data provided by mutual fund body Amfi. Gold ETFs as a category segment have now recorded their 24th straight month of outflows. Nearly Rs 3,900 crore has flown out these exchange traded funds, which were once a rage among investors………………………………………..Full Article: Source

Global ETF Assets Reach A Record $3 Trillion

Posted on 08 June 2015 by VRS  |  Email |Print

Assets invested in ETFs/ETPs listed globally broke through the US$3 trillion milestone at the end of May to reach a new record of US$3.015 trillion in assets under management (AUM), according to ETFGI’s preliminary monthly ETF and ETP global insight report for May 2015.
At the end of May 2015, the global ETF/ETP industry had 5,757 ETFs/ETPs, with 11,117 listings, from 256 providers listed on 62 exchanges in 51 countries. “Our forecast was that assets would break through US$3 trillion by the middle of 2015. It took the global ETF/ETP industry 19 years to reach US$1 trillion in assets under management, 23 years to reach US$2 trillion in AUM and just 25 years to reach US$3 trillion in AUM……………………………………….Full Article: Source

New ETFs Marry Currency Hedging and Dividends

Posted on 05 June 2015 by VRS  |  Email |Print

It has been established that investors like dividend exchange traded funds and it has been affirmed this year that there is plenty of affinity for currency hedged funds. After all, four of the top 10 asset-gathering ETFs on a year-to-date basis are currency hedged products.
The two concepts have been previously married in single ETFs and WisdomTree (NasdaqGS: WETF) adds to the group of currency hedged dividend funds today with the debuts of the WisdomTree International Hedged SmallCap Dividend Fund (NYSEArca: HDLS) and the WisdomTree Global ex-U.S. Hedged Dividend Fund (NYSEArca: DXUS)………………………………………..Full Article: Source

World’s biggest gold ETF loses place in U.S. top 10

Posted on 05 June 2015 by VRS  |  Email |Print

The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, is no longer one of the top 10 U.S.-listed ETFs by value, according to data from FactSet. The value of the GLD fund, which issues securities backed by physical bullion, dwindled to $27.148 billion this week, data on its website showed, as its gold holdings fell to their lowest since mid-January at 709.9 tonnes.
That makes it the 12th largest fund by value listed by ETF.com, which uses FactSet data. At its peak in August 2011, a month before gold prices hit a record high of $1,920.30 an ounce, its value reached $77.5 billion………………………………………..Full Article: Source

Goldman Says Options Traders Too Relaxed Before OPEC Meeting

Posted on 05 June 2015 by VRS  |  Email |Print

Tranquility reigns in exchange-traded funds tracking oil and its producers. Too much, says Goldman Sachs Group Inc. Decreasing levels of implied volatility on the United States Oil Fund LP and the Energy Select Sector SPDR Fund show options speculators see little prospect of turmoil in the commodity even as the Organization of Petroleum Exporting Countries meets in Vienna, according to Goldman Sachs derivatives strategists Katherine Fogertey and John Marshall. The lack of concern could backfire with a rush to purchase hedges after OPEC’s decision, they said.
While the consensus is that OPEC won’t announce any changes to production, there could still be swings as traders focus on other details released in the decision, according to BMO Capital Markets Corp.’s Max Breier………………………………………..Full Article: Source

Gold ETF holdings fall to six year low

Posted on 04 June 2015 by VRS  |  Email |Print

Holdings of gold-backed exchange-traded products have fallen to their lowest levels since 2009 despite rising market uncertainty over Greece’s debt payments. Holdings in ETFs tracked by Bloomberg were at 1,594.1 tonnes Tuesday, down from 1,598.3 tonnes at the beginning of the year, reports Henry Sanderson in London.
Gold rose above $1,200 a troy ounce last month but has failed to hold onto those gains, trading at $1,189.7 Wednesday………………………………………..Full Article: Source

Here’s Why Growth ETFs Continue To Beat Value

Posted on 04 June 2015 by VRS  |  Email |Print

When building out an exchange-traded fund portfolio, many investors prefer to slant their large-cap U.S. stock exposure towards growth or value characteristics. The benefit to this methodology is that you have greater flexibility to hone in on a specific theme that you (or your advisor) believe will outperform over the long run. The downside is that you may choose wrong and end up leaving money on the table versus a traditional broad-based index such as the iShares Core S&P 500 ETF (IVV).
Now, fear of making a wrong choice should never hold you back from implementing a structured ETF portfolio. In fact, there is a commonly held belief that if you aren’t worried about something in your account, then you aren’t diversified enough — meaning that a truly broad array of assets should always have something underperforming based on the prevailing market environment………………………………………..Full Article: Source

Time for another look at ETFs

Posted on 04 June 2015 by VRS  |  Email |Print

Amid growing speculation that liquidity in some sectors of the US market such as corporate bonds may be a lot lower than most investors assume, raising risks in the event of another market downturn, one large market player believes liquidity will come from an unlikely source: ETFs.
Exchange traded funds tend to remain liquid in stressed market scenarios and can actually help boost market liquidity, according to the head of iShares Australia, Jon Howie. “Time and again, across multiple asset markets, what we see is liquidity improves in stressed markets and not the opposite. Investors, particularly institutions, look to the ETFs as their source of liquidity,” he says………………………………………..Full Article: Source

International ETFs Stoke $18.3B in May Inflows

Posted on 03 June 2015 by VRS  |  Email |Print

Exchange traded funds continued their breakneck pace of asset gathering in May, adding $18.3 billion in new capital as investors shuffled into international funds. “Global ETP flows of $18.3bn were concentrated in developed market EAFE equities and Japan funds. Europe and U.S. flows were modest as mixed economic data for both regions has led to uncertainty over growth prospects.”
“Still, 2015 asset gathering remains ahead of the record year-to-date pace set in 2013 and nearly matched last year on the way to a new full-year high,” according to BlackRock, parent company of iShares, the world’s largest ETF issuer………………………………………..Full Article: Source

Commodity Currency ETFs in Trouble as Dollar Resumes Rally

Posted on 03 June 2015 by VRS  |  Email |Print

After a strong start to the second quarter, commodities were hit by the resumption of the U.S. dollar rally over the last couple of weeks. In particular, oil and copper have returned to their declining trend, triggering off worries over inflation and chaos in the currency market.
Notably, two ETFs offering exposure to U.S. dollar (USD) against a basket of world currencies - PowerShares DB US Dollar Bullish Fund ( UUP ) and WisdomTree Bloomberg U.S. Dollar Bullish Fund ( USDU ) - gained over 4% over the past 10 days. This is especially true as a string of upbeat economic data boosted the near-term Fed rate hike bets………………………………………..Full Article: Source

Investment trusts vs ETFs: There’s no contest

Posted on 03 June 2015 by VRS  |  Email |Print

Friends of mine with a lump sum to invest went to an adviser recently and their suggested portfolio was composed almost entirely of exchange-traded funds (ETFs). To me, that seemed such a lazy way of constructing a portfolio it made me determined to prove that a portfolio of investment companies could do a much better job.
Coincidentally, I saw a comment in an online forum asking whether anyone had any statistics on the performance of investment companies versus ETFs and I offered to look into this. We know investment companies regularly outperform open-ended funds – each quarter, the Association of Investment Companies (AIC) publishes data that backs this up – but do they regularly outperform ETFs?……………………………………….Full Article: Source

Can Anyone Match WisdomTree in Currency-Hedged ETFs?

Posted on 02 June 2015 by VRS  |  Email |Print

The second quarter saw a weak start no doubt in the U.S. weighing on the dollar. But the resilient U.S. dollar resumed its strength over the past couple of weeks thanks to the Fed rate hike bets. In fact, the U.S. Dollar Index rose nearly 4% in the same period, erasing most of the spring losses. The surge in the greenback brought back the appeal for currency hedged ETFs and this trend is likely to continue in the summer months.
This is especially true as a raft of upbeat economic data of late and an accelerating job market indicate that the world’s largest economy is improving after the first-quarter slump. If this continues, the Fed might finally increase the interest rates for the first time since 2006, albeit at a slower pace………………………………..Full Article: Source

4 Ways to Short the Energy Sector with ETFs

Posted on 02 June 2015 by VRS  |  Email |Print

After a strong start to the second quarter, the energy sector again lost momentum last month. This is especially true, as the ultra-popular Energy Select Sector SPDR (XLE) shed $648 million in its asset base, as per ETF.com and lost 5.5% in May compared to a gain of 0.3% for the broad market fund.
The steep decline came in the wake of deteriorating fundamentals and a 3.2% decline in Brent oil price, though crude is up 0.5% in the same period. Investors should note that oil prices jumped nearly 5% on Friday on a higher-than expected fall in rig count……………………………….Full Article: Source

The ETF red flags to look out for

Posted on 01 June 2015 by VRS  |  Email |Print

With the exchange traded fund (ETF) market growing rapidly and new providers entering the fray, including active houses launching passive suites, investors face increasing choice. But what red flags should buyers look out for when selecting an ETF? Cheap as you think? Seven Investment Management senior investment manager Peter Sleep highlights several areas as critical, particularly costs.
‘Large creation and redemption costs are a red flag,’ said Sleep, who recently chose to buy Indian futures (with high roll costs) rather than an Indian ETF. ‘The killer for the ETF was the creation and redemption costs………………………………….Full Article: Source

Energy ETF investors are betting oil’s rally is already over

Posted on 29 May 2015 by VRS  |  Email |Print

Investors are cautiously pulling money out of energy producers for the first time in eight months, taking short-term gains after oil rebounded from a six-year low. More than $1.55 billion has been withdrawn this month from exchange-traded funds concentrated on energy stocks such as Exxon Mobil Corp. and Chevron Corp. It’s on pace for the first monthly setback for the group since investors began pouring into the sector in October with an eye toward profiting from an eventual recovery in prices.
“The thesis that oil is too cheap and it has to go higher maybe is not as compelling a case with oil at $60 as it was when it was at $42,”said Ryan Issakainen, a strategist at First Trust Advisors LP in Wheaton, Illinois…………………………………Full Article: Source

Energy ETF Investors Grow Wary of Oil Outlook

Posted on 29 May 2015 by VRS  |  Email |Print

Exchange traded fund investors are exiting energy sector bets for the first time in eight months after oil prices rebounded off a six-year low. Investors have yanked over $1.55 billion from energy stocks exchange traded funds, setting up the first monthly outflows from the sector since October, reports Jim Polson for Bloomberg.
Month-to-date, the Energy Select Sector SPDR experienced $628.6 million in net outflows, Vanguard Energy ETF lost $9.5 million and iShares U.S. Energy ETF saw $533.2 million in outflows, according to ETF.com…………………………………Full Article: Source

Energy ETFs a Riskier Bet Last Week Than Commodity ETFs

Posted on 28 May 2015 by VRS  |  Email |Print

As we saw in the previous part, WTI (West Texas Intermediate) oil futures gained 0.05% last week. While retail investors don’t have easy access to the futures market, they can benefit from access to safer, low-cost avenues to bet on WTI crude prices. The first avenue is energy ETFs such as the United States Oil Fund (USO), an ETF that tracks prompt WTI crude oil futures. Shares of USO trade on the NYSE (New York Stock Exchange) like company stock. The fund lost 1.3% last week.
The second avenue is commodity ETFs such as the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). It holds many American energy companies that have exposure to oil prices due to their upstream oil production operations…………………………………….Full Article: Source

5 Factors to Consider Before Investing in an ETF

Posted on 28 May 2015 by VRS  |  Email |Print

There are now over 1,600 exchange-traded products available to investors, and total assets are quickly approaching $2 trillion. Traditionally, the primary way an investor could get access to a diversified portfolio of stocks was through a mutual fund. But today, many of these investment products mirror the overall market, providing very little differentiation. Good managers are hard to come by.
This, coupled with sometimes high expenses, has resulted in subpar performance for much of the mutual fund industry. If an investor’s goal is to replicate the holdings of an index, another investment option is the often low-priced exchange-traded fund. However, there are complexities in this emerging investment class. With the continued interest in utilizing exchange-traded products for investors’ portfolios, it’s crucial to consider a number of things before you invest in an ETF…………………………………….Full Article: Source

ANZ to launch 6 ETFs in Australia’s USD15bn market

Posted on 27 May 2015 by VRS  |  Email |Print

ANZ Banking Group, the third largest bank by market capitalisation in Australia, is launching six exchange traded funds linked to currency, gold and equities as it embarks on its first venture into the domestic ETF market that is now valued at AUD18bn (USD14.1bn).
Reuters quoted Danny Laidler, co-head of ANZ ETFs, as saying that ANZ is partnering with ETF Securities, a London-based investment firm focused on exchange-traded funds, commodities and currencies, to launch the fund in Australia, with plans to launch similar products in other Asian countries ………………………………….Full Article: Source

Invest In These ETFs To Tap Into Cross-Border Merger Boom

Posted on 27 May 2015 by VRS  |  Email |Print

A cross-border merger boom is boosting ETFs holding Catamaran, Dresser-Rand and other pharma and energy companies that are hot takeover targets. Merger-arbitrage exchange traded funds profit from the difference between a stock’s price when a deal is announced and its final purchase price. Typically, that’s an upward move.
Cross-border mergers and acquisitions have totaled roughly $594 billion in 2015, up 29% from a year ago, IBD recently reported. That surge doesn’t surprise Adam Patti, CEO of ETF provider IndexIQ. ………………………………….Full Article: Source

Coal ETF Outlook Growing Dim

Posted on 27 May 2015 by VRS  |  Email |Print

Some bargain hunters may be looking at the downtrodden coal industry and related exchange traded funds as the market remains near historic lows. However, coal remains depressed for a reason. Over the past three months, the Market Vectors-Coal ETF , which tracks the coal industry, has declined 6.9%. Additionally, the recently launched GreenHaven Coal Fund, which is designed to offer investors with exposure to daily changes in the price of coal futures contracts, has decreased 3.6%.
Some may be tempted to catch the falling knife as the economy still depends on coal to meet growing electricity needs. However, the other fundamental factors may weigh on the space…………………………………..Full Article: Source

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