All ETF Daily News Articles

Coal Fields Merger Creates Big Player (ANR, FCL, CLF, KOL)

coal1Today’s announcement of a merger between Alpha Natural Resources, Inc. (NYSE: ANR) and Foundation Coal Holdings, Inc. (NYSE: FCL) creates the third-largest coal producer in the US. The all-stock deal is worth about $2 billion including $530 million in Foundation debt, with Alpha issuing 1.084 shares for each Foundation share at a value of $32.73/share, a 37% premium to Foundation’s closing price on May 8, 2009. Foundation shareholders will own about 41% of the new company, while Alpha shareholders will own 59%. The merged company, which will retain the Alpha name, will have a market cap of about $3.5 billion and reserves of more than 2.3 billion tons of coal. Full Story:
NYSE:KOL May 12, 2009 9:06am

Hong Kong ETF (EWH): ‘Set to soar’

soaring1"While the U.S. markets are rising, Asian stock markets are on fire," says global specialist Nicholas Vardy. In his The Global Bull Market Alert, he suggests, "Our latest bet is s China play; we are recommending the iShares MSCI Hong Kong Index (NYSE: EWH). Here, he explains why he believes that Hong Kong's stock market is "set to soar over the coming months." "First, although it is thousands of miles away, the Hong Kong stock market is directly subject to the whims of U.S. interest rate policy. "As you know, the Fed has cut interest rates to essentially zero in the U.S. What you may not know is that Hong Kong's monetary policy is closely tied to the U.S. dollar. "For the last 25 years, the Hong Kong dollar has been worth about $7.80, a level ensured through an interest rate policy implemented by a currency board. "As a result, Hong Kong's stock market is subject to wild "booms and busts" for reasons that have nothing to do with its own economic prospects. "Every time the Fed cuts real interest rates to zero -- as it did in 1992-1993, and again in 2003-2005, the Hong Kong stock market has at least doubled. Full Story:
ETF BASIC NEWS May 11, 2009 3:51pm

Getting More Income From Your ETF Bond Investments

bondsThese are trying times for income oriented investors. Interest rates are still stuck at record low levels which means lower income generated from bonds and other fixed income investments. U.S. Treasuries with a 10-year maturity are yielding just 3.20%, which isn’t much over the lifetime of the investment, especially after deducting the cost of taxes and any potential for re-inflation. The interest rates being paid by bank certificates of deposit (CDs) is also down. According to, today’s national average 1-year rate for bank CDs is just 2.20%.What can bond investors do? Bonds, like stocks, come in many different varieties. Government bonds are issued by U.S. or foreign governments, municipal bonds are issued by cities, states and local governments, corporate bonds are issued by companies and there are also asset-backed securities, mortgage backed securities and convertible bonds along with Treasury Inflation Protected Securities (TIPS). Diversifying your bond portfolio is one strategy to gain more income and to reduce market risk. Let’s briefly evaluate 5 bond ETFs that can help you to generate more income from your bond investments. iShares Barclays Aggregate Bond Index Fund (NYSEArca: AGG) The performance and yield of AGG are linked to the widely followed Barclays U.S. Aggregate Bond Index. The index measures the U.S. investment grade bond market, which includes investment grade U.S. Government bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed securities. With almost $10 billion in assets, AGG is the largest bond ETF and it carries a yield in the vicinity of 4.5%. Year-to-date, AGG has declined 2.09%*. In 2008, AGG gained 5.88% and the fund’s annual expense ratio is 0.24%. iShares iBoxx $ High Yield Corporate Bond Fund (NYSEArca: HYG) HYG is benchmarked to the iBoxx $ Liquid High Yield Index, which is designed to provide a balanced representation of the U.S. dollar-denominated high yield corporate bond market through some of the most liquid high yield corporate bonds available. The number of bond issues within HYG is typically 50, although this may change from time to time. The fund has close to $2.13 billion in assets and carries a juicy yield of 11.56%. Year-to-date, HYG has increased by 5.35%. In 2008, HYG fallen 23.86% and the fund’s annual expense ratio is 0.50%. Full Story:
NYSE:AGG May 11, 2009 3:51pm

Barclays iShares bidder search success

ishares_logoLONDON (Reuters) - Barclays Plc's (BARC.L) efforts to find more bidders for its iShares funds arm seem to have paid off, showing that prize assets can draw plenty of interest even in crisis-stricken markets. Barclays said on Sunday it had received new interest from both trade and private equity buyers for iShares, after a report in the Sunday Times newspaper said buy-out house BC Partners might top a 3 billion pound ($4.56 billion) deal with CVC Capital Partners, agreed in April...... ......In addition, any blow to CVC would be softened because of a $175 million break-up fee, payable if Barclays finds a new buyer. "If they walk away, they'll (CVC) earn a nice bit of money for a few weeks work," one banker said, asking not to be named, because he was not involved in the sales process. BC Partners and CVC declined to comment...... ......RARE COMMODITY Any estimates of what iShares is worth can only have gone up given that Barclays shares have roughly doubled since it announced the deal -- and almost quintupled since a trough in March -- giving it bigger clout in the talks. The "go-shop" clause, in effect until June 18, could therefore result in a fresh offer from CVC. "Don't underestimate CVC's interest in iShares ... they've got their bid in first and they do have the ability to raise the offer if they want to," another banker said. Any buyer picking up iShares, which offers exchange traded funds (ETF), will get access to a rare commodity with strong growth potential now that investors favor the conservative asset class. Full Story: See our previous story:
ETF BASIC NEWS May 11, 2009 11:36am

ETFs: What New Trends Mean for Investors

etf-news7Even after a two-month stock market rally, market volatility remains high. Simply put, investors are worried, not only over the timing of an economic recovery, but also by the possibility that the recent surge in equities may be little more than another bear market rally. The uncertainty bodes well for the popularity of low-cost exchange-traded funds (ETFs) that allow investors to jump into and out of positions with great agility throughout the trading day. Total ETF assets increased by $49 billion, or 10.2%, for the month, to $531 billion at the end of April, according to State Street Global Advisors' (STT) April ETF Snapshot report. Since 2002, assets have increased more than fivefold, as the number of ETFs has grown more than eightfold. The ongoing net flows of money out of open-end mutual funds and into ETFs is mainly the result of the drop in the stock market in the last few months of 2008 which "freed up the tax handcuffs" among investors, says Noel Archard, managing director for product research and development at iShares. Archard points out that investors stood to incur a much smaller tax bill, if any, from pulling money out of conventional mutual funds after the market downdraft. The poor performance by many mutual funds, coupled with the capital gains distributions they had to pay out, only added to investors' eagerness to shift into tax-efficient ETFs, he adds. He estimates that roughly $170 billion in assets migrated from mutual funds to ETFs last year. Full Story:
ETF BASIC NEWS May 11, 2009 10:35am

Coal ETF On Fire (KOL)

coalLast summer, I wrote about the prospects for getting into the coal market. At the time, I pointed out that "just because coal is up 140% does not mean that Joe's Coal Mine is all of a sudden 140% more profitable." And indeed, like so many bull markets of that halcyon summer, the bull market in coal came to a crashing halt, and brought down with it coal stocks, as well as the only coal-focused exchange-traded fund in town at the time, the Van Eck Market Vectors Coal (KOL). The story has been pretty straightforward and painfully familiar: The global economy tanked, including China, and thus energy and steel demand for coal dried up. At least, that's what happened to the demand for the spot coal that shows up on charts. The reality from the coal company's perspective is that long-term contracts drive the bottom line, and those long-term contracts are negotiated based on real supply and demand - how many boatloads of the stuff go from point A to point B, and on what schedule. Full Story:
NYSE:KOL May 11, 2009 10:16am

Bank shares fall on capital-raising plans (ETF: XLF)

fedbankBOSTON (MarketWatch) -- The U.S. financial sector opened to the downside Monday after several banks announced common-stock offerings designed to help pay back the funds they've borrowed from the government under its rescue plan. The Financial Select Sector SPDR Fund (XLF), a widely followed barometer of financial stocks, was down 3% in early trading.   Also weighing on the sector Monday was a report that several banks won concessions from the Federal Reserve during the government's stress tests, the results of which were released last week Full Story:
NYSE:XLF May 11, 2009 10:09am

Don’t Buy This New Investment

dont-buyYou can always find promising ways to invest. But your portfolio can live without this particular new investment vehicle, even though many have anticipated it for years. Earlier this month, a relatively small fund company, Grail Advisors, launched an actively managed exchange-traded fund named Grail American Beacon Large Cap Value ETF. Unlike previous active ETFs, which have investment objectives that require them to follow quantitative models without room for subjective thought, Grail's offering gives its managers latitude to buy whatever stocks they believe will help the ETF outperform the Russell 1000 Value index of large-cap value stocks. Hey! It's just another fund! The endless hype about ETFs amuses me. It seems like anytime a new ETF comes out, many investors hold their breath, hoping that they've stumbled onto the next great innovation in investing -- and will somehow capitalize by getting in on the ground floor. Full Story:
ETF BASIC NEWS May 11, 2009 9:53am

Are Commodity ETF’s Getting In The Middle Of Fear or Greed?

greedA repeat of last week with nine of the ten major sectors ending the week higher, and one struggling sector to watch. Technology was down 2.2% for the week after setting the pace and leading the broader NASDAQ higher. The challenge for the sector was the semiconductor space, down over 7% on the week. Regardless, the index ended up 1.2% on the week and continued the string of nine weeks to the upside. The weekly volume has been above average eight out of the nine weeks, showing the strength of this move higher. Financials were down 2.3% on the expectations of last week's banking stress test announcement. As we all know, the news was perceived as positive and the sector led the week gaining more than 20%. The banks were up more than 30%! Regional banks added 21% on the week. Broker/dealers were high by 10.6%. The results show a bullish response to the stress test data. Money is moving into the market and the result is more sectors breaking higher and creating a broader uptrend for the markets overall. Health care, utilities, and energy joined the positive trends moving higher. However, the market remains overbought, technically. Commodities have joined the uptrend with a breakout this week. DBC, PowerShares Commodity Index ETF, broke above resistance at $21.30, DBA, PowerShares Agriculture ETF, broke above resistance at $26, and both are worth watching for a positive entry point. Oil is one of the positive sub-sectors of commodities, moving above $58 per barrel this week. USO, the United States Oil Fund ETF, broke above resistance at $32.40. UNG, the United States Natural Gas ETF, spiked above the $14.45 resistance to close at $16.93, breaking the downtrend line in play near $16 as well. KOL, Market Vectors Coal ETF, continued to move higher from the break through resistance at $17.35 last week, closing at $22.85. Full Story:
NYSE:DBA May 11, 2009 9:28am

FAS/FAZ Dealing With Billions of Dollars of Securities Sales from Members (FAS, FAZ, BBT, COF, PFG, WFC, USB)

leveragedThe triple leverage ETF’s, the Direxion Financial Bull 3X Shares (NYSE: FAS) and Direxion Financial Bear 3X Shares (NYSE: FAZ), are perhaps the most volatile of all financial-stock ETF’s.  This morning these two are getting to deal with a wave of secondary offerings and capital offerings from constituent member banks and financial firms.  These ETF’s are reacting to major “raising cash” filings and offerings from BB&T Corp. (NYSE: BBT), Capital One Financial Corp. (NYSE: COF), Principal Financial Group Inc. (NYSE: PFG), Wells Fargo & Co. (NYSE: WFC), and US Bancorp (NYSE: USB)...... ........As a result of all of these financials lower on offerings and after seeing profit taking in other major financial firms, we have the Direxion Financial Bull 3X Shares (FAS) down 9.8% at $11.32 and the Direxion Financial Bear 3X Shares (FAZ) up 8.9% at $4.90 at 9:47 AM EST. Full Story:
NYSE:FAS May 11, 2009 9:16am

Investors, not jewellers, driving gold price-ETF

gold-minerGlobal commodities exchange-traded fund manager ETF Securities believes that the current gold price is too high to attract the key jewellery sector, leaving investment demand as the sole driver of prices. Gold will need to fall to between $800-$850 an ounce to generate stronger interest from jewellery makers, Nicholas Brooks, head of investment strategy for ETF Securities, told reporters on a media call from London. About 60 percent of total world demand for gold last year came from the jewellery sector, versus 30 percent from investors, with the rest from industrial users, according to Brooks. Gold rose $900 an ounce late last month as worried investors fretted over currency and stock markets. Spot gold stood at around $915 an ounce early on Monday. It last traded below $850 an ounce on Jan. 22, according to Reuters data. Full Story:
ETF BASIC NEWS May 11, 2009 9:07am

Flipping Nuclear Power Back On (ETFs: NUCL, NLR)

nuclearNuclear-power generation is experiencing a revival. While there hasn't been a new plant started since the Three Mile Island fiasco in 1979 (, the Nuclear Regulatory Commission ( is currently processing applications for 26 new facilities, which amounts to only half the capacity needed for nuclear to continue meeting 20% of America's energy needs. Using Energy Information Administration's ( projections that U.S. electricity demand will grow 50% over the next 30 years, NRC Commissioner Kristine Svinicki figures that America will need the equivalent of 50 new 1,000-megawatt nuclear-power plants just to maintain the status quo ( More importantly for investors, while America has mixed feelings about this non-carbon-emitting energy source, other industrialized countries are stepping up their decades-old nuclear commitment; 75% of France's electricity is nuclear-generated. More than 60 new nuclear plants should come online overseas by 2015...... ......Despite being politically unpopular, nuclear utilities like Exelon could actually profit if a carbon-tax system is introduced, says Miller, and are lobbying Congress to get a cap-and-trade system that doesn't undermine their regulated monopolies. Besides the utilities mentioned, he likes American Electric Power (AEP) and Public Service Enterprise Group (PEG), but is cool on Constellation Energy. Three nuclear-oriented exchange traded funds let investors spread risk across the uranium and nuclear-power industries. Morningstar's Justice and ELF Digest ( Publisher David Fry favor Van Eck Associate's ( Market Vectors Nuclear Energy ETF (NLR). Justice notes that NLR has exploited "first-mover advantage" to capture about 15 times the assets of second mover Barclays' ( iShares S&P Global Nuclear Energy (NUCL), thus offering investors a tighter bid/ask spread. Full Story:
ETF BASIC NEWS May 11, 2009 8:57am

Gold investment demand wanes, ETFs in dry spell

goldGold prices eased back towards $910 overnight and early this morning, as risk appetite made a comeback and was seen as a hunger for stocks and certain currencies. Investment demand for gold as a safe-haven was waning in the wake of dissipating angst in various local markets. ETF-related demand has gone into drought mode since reaching a record high last month. Some of today's easing in values was seen as being related to news that US Bancorp, Capital One, and BB&T Corp will offer common stock and are intending to check out of Hotel Geithner (TARP) in the near future. What's in your wallet? Enough money to pay back kind Uncle Sam. So much for bank nationalization, Nostradamus. In addition, gold sales have plunged in several key regionally-oriented locales, such as Dubai (gateway to India) and Hong Kong (gateway to you-know-where). Local chain store spokesmen have characterized the situation as " high gold prices having hit the bullion trade" and opined that "gold sales will now pick up only when the prices come down." March/April figures show a sharp (50%) drop in offtake in Dubai. Hong Kong and Singapore fared not much better, on the back of persistent recessionary forces at work, and on the lack of available funds to buy gold with. Bear in mind that investment demand has been the key (and some -such as ETF Securities- say, the 'sole') driver/support for gold in Q1. Gold's year-to-date average price has been near $905 per ounce (the highest such average, yet). This, against a background that had the average gold price (since 2001) hover near $540 per ounce, and near $390 (for the 36 years between 1974 and 2009). Full Story:
NYSE:GLD May 11, 2009 8:24am

Drug companies see acquisitions as prescription to health

drugsTo add the bright promise of biotechnology but spread out its volatility and risk, she recommends the exchange-traded fund SPDR S&P Biotech. That ETF tracks the Standard & Poor's Biotech Select Industry index of 27 stocks from the S&P Total Market index. Although the fund includes a few established biotechnology firms, nearly half of the companies in its portfolio don't have drugs on the market. "Every drug introduced has to be a $1 billion blockbuster to support the spending on research and development that went into it," said James Molloy, pharmaceutical analyst with Caris & Co. in Boston. "Pharmaceutical companies have the cash and the capacity to take on additional companies that might be a good fit or will deliver a new portion of the market for them." The slower regulatory process of recent years has taken its toll on new discoveries and added to the desperation of companies whose reputations were built on popular drugs. The steady demand for pharmaceuticals and the aging of the Baby Boomer generation continue to bode well for the industry, but companies cannot escape patent expirations and generic competition. "Drug development drives pharmaceuticals, and there hasn't been a whole lot of that development for five years," said Les Funtleyder, health-care strategist for Miller Tabak & Co. in New York. "There are companies that need drug pipelines, and there are smaller companies that have it." Although pharmaceutical firms have consolidated for a long time, megamergers don't always create greater shareholder value, Funtleyder said. Drugs are an innovation business, and mergers won't help unless they lead to new products, he said. Nine out of 10 drugs fail, and it is crucial to produce successes to make up for those failures, he said. Exchange-traded funds are gaining popularity as a means of diversifying risks of the pharmaceutical industry. Full Story:,0,2169995.story
ETF BASIC NEWS May 10, 2009 5:34pm

How Is the New Hedge Fund Strategy ETF Doing?

resultsThe innovators were out with guns blasting as they introduced an ETF that acts like a hedge fund. How has it been doing since the March 25 launch?This new ETF, established by IndexIQ analyzes publicly available hedge fund performance data and then tries to replicate returns utilizing ETFs and other liquid trading vehicles. Additionally, it promises to perform as well as a hedge fund without the risk and with low correlation to traditional assets. Another benefit that this ETF could offer to investors is risk reduction because of its low correlation with the stocks and bonds that already dominate an investor’s portfolio. To take it a step further, the ETF replicates six different common fund strategies using ETFs to match the calculated risk exposure of the hedge funds, states Scott Burns of Morningstar. It invests in other ETFs, and offers investors a low cost option to the world of alternative investments. Full Story:
NYSE:QAI May 10, 2009 2:18pm

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