All ETF Daily News Articles

Semiconductors Conduct A Comeback (ETF: SMH, PSI)

semiconductorRecent commentary from management at Applied Materials (Nasdaq:AMAT), Intel (Nasdaq:INTC) and Advanced Micro Devices (NYSE:AMD) seems to indicate the current semiconductor cycle is in a bottoming process, providing an opportunity for investors willing to make that bet. Applied Materials Reports Messy Quarter Applied Materials, which manufactures capital equipment for sale to Intel and others, recently reported on its fiscal second quarter ended April 26. The company had a GAAP loss of $255 million, or 19 cents per share. The quarter was a messy one, as usual for technology companies. But excluding one-time items and stock option expenses, the loss comes in at $136 million, or 10 cents per share. New orders in the quarter totaled only $649 million, leading to a $3.16 billion decline in backlog - a drop of nearly $1 billion sequentially.  Management Optimistic Despite Recent Earnings Despite the weak earnings report, management at Applied Materials gave optimistic comments about current conditions in the industry during the conference call...... ......Investors who don't want security specific risk can look at the Semiconductor HOLDRs (NYSE:SMH) or the PowerShares Dynamic Semiconductors (NYSE:PSI) - two ETFs that hold shares of semiconductor and capital equipment stocks. Full Story:
NYSE:PSI May 15, 2009 9:14am

Opposites Attract

oppositesAt this week's Financial News conference on "Investing in ETFs" John Godden, head of London-based hedge fund advisor IGS Group, spoke of the convergence of the hedge fund and ETF industries. This may seem strange at first sight, since the two types of fund sit at opposite extremes.  One type of fund structure is associated with manager skill, performance fees, opaqueness and illiquidity. ETFs, by comparison, offer a purely formulaic approach, ease of trading and transparency, as well as cheapness. In fact hedge funds and ETFs have long gone together, though in a slightly different way. ETFs' flexibility has endeared them to the managers of long-short portfolios, not least because of their historical exemption from the "up-tick" restriction on shorting individual stocks in the US, which reigned from 1938 to 2007, and may yet be reintroduced. But a number of recent news stories suggest that the two worlds may be combining in a more fundamental way. From db x-trackers' recent launch of a European-listed ETF investing in hedge funds, to IndexIQ's hedge fund replicator range, product developers are already hard at work on combining the two types of fund.  Then, if one considers the hedge fund/ETF marriage more broadly, as a merger of active and passive trading vehicles, then Barclays' recent filing to launch actively-managed ETFs under the iShares banner, reported by Murray Coleman earlier this week, must be seen in the same category. Finally, today's reported interest of Blackrock, the leading active US-based fund manager, in buying Barclays Global Investors, the world leader in passively-managed funds, takes the convergence theme to a new level. Full Story:
ETF BASIC NEWS May 15, 2009 9:09am

Gold ETF’s Try To Interpret Anglogold Earnings (AU, GLD, GDX)

gold-minerWith gold back well above the $900.00 mark, it seems that the SPDR Gold Shares (NYSE: GLD) and the Market Vectors Gold Miners ETF (NYSE: GDX) are trying to interpret a key gold earnings report.  South African gold miner AngloGold Ashanti Ltd. (NYSE:AU) reported first quarter 2009 profits of $150 million and EPS of $0.42, substantially better than fourth quarter 2008 loss of $17 million (EPS loss of -$0.05). With only 1 real estimate seen in the U.S., this is one to watch but one that is hard to use for significant comparisons.   Production totaled 1.103 million ounces of gold, down 13% from the previous quarter, but inline with previous guidance. Cash costs were also inline, totaling $445/ounce. Revenue for the quarter was $689 million, way off analysts expectations of $1.05 billion and down 22% sequentially. Full Story:
NYSE:GDX May 15, 2009 8:49am

Barclays has confirmed takeover interest in its BGI asset management arm

barclaysThe banking giant is already offloading its iShares fund management business, which is the most profitable part of BGI, in an agreed £3bn sale to CVC Capital Partners. However, Barclays said it had received a number of rival approaches for the iShares business under the 'go shop' clause in its sale to CVC, including interest in the wider BGI business. A report in the Financial Times said the group was in negotiations with possible bidders including US fund manager BlackRock over a deal for BGI, which is one of the bank's most valuable assets. Shares rose 6% as investors cheered the prospect of a bidding battle for BGI. A sale of the business could also net further hefty windfalls for top managers who own shares in BGI, including a possible £12.5m payout for Barclays' investment banking chief Bob Diamond. Full Story:
ETF BASIC NEWS May 15, 2009 8:35am

Natural Gas ETF Draws Heavy Call Trades

natural-gasThe U.S. Natural Gas Fund (UNG) is drawing large trades that are apparently counting on its shares to rise 20% in the next five months. More than 31,700 calls traded at the Oct. 20 strike yesterday, dwarfing the average volume of 523 contracts, according to OptionMonster's tracking programs. The calls included two large blocks -- one of 4,000 contracts and the other of 22,000 -- trading at $1.45 within seconds of one another Thursday. Full Story:
NYSE:UNG May 15, 2009 8:17am

Options: Put-Buying in SPDR Retail ETFs

retail-shoppingThe news hasn't been good so far this week for retail stocks, and big put activity in the SPDR Retail Exchange Traded Fund (XRT Quote) today could suggest investors are hedging against a further downturn. Looking at the Sept. 20 puts, we see that more than 15,300 of those contracts changed hands for around $1.00 vs. open interest of 18,100 during the first 10 minutes of trading today. The bulk of that volume happened even earlier when one customer wasted little trading time and bought 15,000 Sept. 20 puts for 98 cents with the stock around $25.50. What's interesting about this trade is the current stock price for XRT is up 46 cents so far today to $25.98, which is about 25% higher than the strike price. In order for the customer to make money, the ETF needs to be trading below $19.00 at September expiration, which is the difference between the strike price and the premium the customer paid. XRT shares have not hit $19.00 since March 9, but the stock price has dropped about $1.00 since the beginning of the week. Full Story:
NYSE:XRT May 14, 2009 5:02pm

Using ETFs to Snag Equity-Beating Returns in Bonds

bondsIn the wake of a furious market rally over the last few weeks, and all sorts of talk about "green shoots" popping up, one would think that all of the most recently published economic data being produced is decidedly positive. I regret to say that it is not. Granted, we have seen some relatively better numbers recently than we had just three months ago, but those are comparisons against an awfully low standard. There have been no "all clear" signals distributed, but disaster no longer seems imminent. While the economy will no doubt resume growing at some point, I lack the foresight to say when that will happen and from what base we will begin anew. In a nutshell, there is plenty of uncertainty in today's market. That said, let's not forget that there is always some uncertainty in investing. Risky asset classes, like stocks and corporate bonds, do not always go up. If they did, they would be called risk-free. In fact, orthodox financial theory claims that systemic risk is the only source of long-term returns above the risk-free rate paid on cash deposits. If an investor could avoid all risk simply by purchasing a broad basket of world stocks and bonds, everyone would jump into the markets to try to capture the outsized returns. The returns on stocks and corporate bonds would then be equal to Treasury yields. Anytime most investors agree that there are no systemic risks to investing--which seemed to happen multiple times over the past decade--the market en masse seems to err. Stock prices get too high, equity risk premiums disappear, and a "Black Swan" event, such as a credit crisis, strikes.   Full Story:
ETF BASIC NEWS May 14, 2009 2:30pm

Barclays Global Investors Buys Mexico’s Naftrac ETF Program

mexicoMEXICO CITY (Dow Jones)--Barclays Global Investors said Thursday that it has purchased Mexican state development bank Nafin's Naftrac exchange traded funds program for an undisclosed amount. In a press release, Barclays Global Investors said the deal makes its iShares family of ETFs the largest provider of ETFs based in Latin America. Barclays Global Investors said Naftrac has been renamed iShares Naftrac...... ......"In the coming months, we will intensify our efforts to develop and broaden our presence in Mexico," Daniel Gamba, Barclays Global Investors' director for Latin America and the Caribbean, said in the press release. Full Story:
ETF BASIC NEWS May 14, 2009 2:06pm

An ETF For Every Investor!

etf-newsIn last week’s Money and Markets column, I told you about the advantages exchange-traded funds have over mutual funds. Today we’ll go a little deeper and look at the many exciting ways you can execute your investment ideas with ETFs.  As you’ll see, practically all the new financial innovation is happening in the ETF niche. Mutual fund sponsors have all but given up on doing anything new and different. The first thing I want you to understand is that an ETF is nothing more than a tool. And most of the time, ETFs do what they’re designed to do. The more important question is which ETF is a match for your goals and situation? The ETF that works for your neighbor might not be the same one that you need. Adding ETFs to your toolbox is a terrific way to implement your investment strategy. So what are your goals? If you have a well-designed investment strategy, you’ll still need good tools to execute that strategy. And ETFs are a great way to fill up your toolbox.  Just look at some of the ways ETFs allow you to invest … Market Benchmarks: If you’re a broad-minded investor who wants to play the whole market, you can easily do it with ETFs. The iShares MSCI ACWI Index Fund (ACWI) tracks the MSCI All-Country World Index — which includes just about every stock market in the world: U.S., Europe, Asia, Emerging Markets, 46 countries in all. ACWI is one-stop shopping for equity investors. Style Investing: Do you think small-caps will outperform? Consider iShares Russell 2000 Index Fund (IWM), which lets you buy all 2,000 stocks in this popular index with one, quick transaction. Or if you’re looking to tilt your portfolio toward value stocks, or growth stocks, or dividend-paying stocks, you have plenty of ETFs to choose from. Sector ETFs: These are some of my favorites. You know that different industries tend to rotate in and out of favor: Technology, health care, retailers, utilities, and more. ETFs let you own the hot sectors and also give you a way to zero in on the best sub-sectors. Within the technology sector, for instance, there are ETFs that cover semiconductors, computer hardware, software, information services, networking, telecommunications and more. International: For years investors had to use mutual funds in order to invest outside the U.S. Fund sponsors covered broad regions, but to get any more precise you had to buy individual stocks. Not any longer. ETFs now cover not only the major regions of the world — Europe, Asia/Pacific, Latin America and so on — but also many individual countries. Whether you want to buy Singapore, Switzerland, or South Africa … ETFs let you do it. Try that with a mutual fund! Full Story:
ETF BASIC NEWS May 14, 2009 2:04pm

ETF inflation trades

NYSE:GLD May 14, 2009 1:41pm

Shorting both FAS and FAZ for an 87% return?

idea( I’ve been playing around with ETFs for a while and thought about a way to generate a considerable profit from them. Option traders are familiar with time decay but it also applies to leveraged ETFs. This ETF time decay is a result of the fund management fees, leverage financing interests and other expenses. Since November 2008, there are 2 interesting funds for this strategy: The Direxion Financial 3X ETFs. FAS is long the financial market and FAZ is short the financial market, both using 300% leverage. These ETFs are very popular and are traded in the tens of millions shares a day which make them good candidates for short selling. While I was looking around for information on this strategy, some people rightfully said “they cannot go both to 0”. This may be true but that’s not the object of this strategy. Here, we want to re-hedge the positions daily to balance the dollar amount on FAS and FAZ. This way, we profit from the downward bias on both funds and we are hedged against the market since the net delta of this position is near 0 and readjusted to 0 every day.

The strategy is: everyday, at close time, balance the positions on FAS and FAZ to have the same short dollar amount resulting in a net delta of 0. A quick backtest starting with a short position of $5000 on each ETF shows......

Full Story:

NYSE:FAS May 14, 2009 12:33pm

Invesco PowerShares Recognized With ETF Industry Awards

powersharesCHICAGO, IL--(Marketwire - May 14, 2009) - Invesco PowerShares, a leading provider of exchange-traded funds (ETFs) was recognized for launching the "Most Innovative ETF Product" in 2008 and for its ongoing "Contribution to the ETF Sector" at two ETF industry conferences held recently in New York City. Invesco PowerShares received the 2008 award for "Most Innovative ETF Product" for the Americas at the 5th Annual Global ETF Awards®. Invesco PowerShares introduced the industry's first actively managed equity ETFs in April 2008, listing the PowerShares Active Mega Cap Fund (PMA), PowerShares Active AlphaQ Fund (PQY), and PowerShares Active Multi-Cap Fund (PQZ). As part of the same listing, Invesco PowerShares also launched the PowerShares Active Low Duration Fund (PLK), and in November 2008, the company listed the first actively managed U.S. Real Estate ETF -- PowerShares Active U.S. Real Estate Fund (PSR). Actively managed ETFs combine the goals associated with active management (reduced volatility, managed risk and benchmark outperformance) with the traditional benefits of ETFs, such as tax efficiency and transparency. "It is truly an honor to be recognized by our peers as a leading innovator in the ETF Industry," said Bruce Bond, president and CEO of Invesco PowerShares. "We believe our diverse suite of ETF portfolios is at the forefront of the industry delivering value and market-leading ideas to investors." Separately, Edward McRedmond, senior vice president of portfolio strategies at Invesco PowerShares, was presented with the 2008 award for his "Contribution to the ETF Sector" at the 8th Annual Closed-End Fund & ETF Awards Capital Link Forum. This marks the second consecutive year Mr. McRedmond has received the award and the fifth consecutive year for Invesco PowerShares. "It's been my privilege to work and interact with so many wonderful and talented people in the ETF industry over the years," said McRedmond. "On behalf of Invesco PowerShares, I am deeply honored to be receiving the award for Contribution to the ETF Sector." Full Story:
ETF BASIC NEWS May 14, 2009 12:17pm

PRECIOUS-Gold steadies near $925 as dollar recovers, ETF up

3-16-09-gold-125x125TOKYO, May 14 (Reuters) - Gold held steady around $925 per ounce on Thursday as a recovery in the dollar dented sentiment, pushing prices below a six-week high touched the previous day on buying by gold-backed exchange-traded funds. Despite U.S. and euro zone data suggesting recent optimism about a global economic recovery may have been premature, gold struggled to extend gains as current prices were already seen as high, traders said. "Gold prices have been stabilising at relatively high levels, slowing fresh investment," said a senior trader at a Japanese smelter. "For gold prices to break above recent ranges, there has to be some fresh news about economic turmoil," he said. But gains in other commodities such as oil and base metals in recent weeks suggest gold will remain supported, keeping prices in the $915-$930 range for now, the senior trader said. Spot gold <XAU=> held steady at $924.00 per ounce, down 0.2 percent from New York's notional close of $925.45. It fell 0.4 percent to a low of $922.20 earlier on Thursday. On Wednesday, gold rose to a six-week high of $930.40 an ounce as buying by exchange-traded funds and losses in stock markets boosted interest in the metal. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said holdings had risen to 1,105.62 tonnes as of May 13, up 1.53 tonnes from the previous business day for the first gain in a month. Full Story:
NYSE:GLD May 14, 2009 12:01pm

Commodity ETF’s Are The Best Place To Be For The Next Decade

commoditiesWhy invest in commodities? Two and a half billion people are going to live like Americans in the next 20 years and prices go up over time, that’s the nature of inflation. We are in the middle of a global economic crisis and commodities are on sale. Buy commodities now while they are still cheap. When we finally emerge from this global economic crisis — prices will explode higher. I’m talking about another long-term bull market in commodities. Let me explain… Inflation Will Push Commodities Prices Higher Our Federal Reserve Chairman Ben Bernanke is an inflationist, which is an advocate of the policy of deliberate inflation achieved by increasing the supply of available currency and credit. They call him helicopter Ben because he once quoted a statement made by Milton Friedman, about using a “helicopter drop” of money into the economy to fight deflation. Bernanke is a student of the causes of the Great Depression, and he has written extensively on this subject. Bernanke knows that deflation is quite negative for an economy and should be avoided at all costs. We have recently seen deflation as prices for real estate and commodities dropped during this recession. But, Ben Bernanke’s Fed and other central banks around the world have fired up the printing presses to combat deflation. They have been dumping new currency into the economy to reverse deflation and stimulate the economy. It’s working! One measure of inflation- the Consumer Price Index (CPI) has recently turned positive. Deflation is out—Inflation is starting. The problem is, inflation could really skyrocket, especially when we finally emerge from this recession.  Inflation eats away at your purchasing power and takes away your wealth. One of the best ways to protect against inflation is to invest in commodities.In the 1970s, when inflation in the U.S. was high and the economy was in a deep recession, commodity prices soared. You want to own tangible assets like metals, energy, agriculture, and livestock as these commodities hold their value in inflationary times. Full Story:
ETF BASIC NEWS May 14, 2009 11:11am

Growing Interest In UNG ETF Spurs Natural Gas Price Rally

natural-gasThe front-month natural gas NYMEX contract has rallied 45% since the end of April. The price rally has taken many by surprise because fundamentals have not changed. Industrial demand remains down, liquefied natural gas (LNG) imports are starting to show up and storage inventories will likely hit a new record this fall. Some analysts believe the rally in natural gas prices is due to a nearing economic recovery, but Energy Solutions, Inc. doubts that is the case. “History shows that natural gas prices rally in the second quarter of the year,” says Valerie Wood, President of Energy Solutions, Inc. “The rally usually starts a little earlier than it did this year, but it does tend to peak in May. So, the timing of this rally isn’t that much different from past years.” “Another factor driving this rally involves a little speculative déjà vu,” says Wood. There has been a surge of investor interest in United States Natural Gas Fund, LP (UNG), an exchange-traded fund. When UNG is purchased, the portfolio of products that make-up UNG are purchased. One of those products are natural gas NYMEX futures contracts. “If the purchase of UNG is aggressive, it can very well cause a quick rally in natural gas prices, which in turn increases the value of UNG and makes investors very happy. This prompts investors to throw more money at UNG, which could be a driving force behind another rally. This same type of investment happened last year, albeit with other types of funds,” says Wood. Full Story:
NYSE:UNG May 14, 2009 10:06am

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