All ETF Daily News Articles

Bearish Mexico Stock Options Reward Traders With 200% Returns (Puts on EWW)

pigonatoiletApril 27 (Bloomberg) -- Options traders who placed bets last week that Mexico’s outbreak of deadly swine flu would spur a stock-market sell-off earned more than 200 percent on their investments today. Contracts giving the right to sell the iShares MSCI Mexico Investable Market Index Fund for $31 by May 16 jumped as high as $1.86 today from the 60-cent closing price last week, according to data compiled by Bloomberg at 2:06 p.m. New York time. The contracts were the most-traded options today on the iShares fund, which mimics the performance of the MSCI Mexico Index, a 25-company benchmark for Mexican shares. The fund, which changes hands on U.S. exchanges like a stock, lost as much as 8.5 percent today to $30.29 after President Felipe Calderon declared emergency powers to fight the virus, which has killed as many as 149 people in Mexico. Mexico’s Health Minister Jose Cordova cancelled school classes on April 24 to prevent the spread of a “new strain of influenza,” according to an e-mailed transcript of a speech in Mexico City. Full Story: Put/Call option list:
NYSE:EWW April 27, 2009 3:56pm

Scared to Tackle Equities? How About a Convertible Bond ETF?

etf-newsFor wary and weary investors who find themselves a bit skittish to re-enter the markets, there’s a new exchange traded fund (ETF) that straddles the line between stocks and bonds. A convertible bond is a hybrid tool for investors that offers exposure to both stocks and bonds and pays investors a coupon smaller than a comparable bond, but gives the investor the option to convert the unit into a stock at a later date if they wish, Tom Anderson, State Street Global Advisor’s head of research and strategy, told us. State Street recently launched its first-to-market convertible bond ETF, SPDR Barclays Capital Convertible Bond ETF (CWB), just in time for this area of the market to experience a resurgence. These bonds, which have been around since the 1970s, are seeing renewed popularity for two reasons. One is their hybrid status. The other, Anderson says, is that “a lot of investors aren’t ready to get into stocks yet - this gives them a middle ground.” Full Story:
NYSE:CWB April 27, 2009 1:30pm

Don’t Sweat The Small Stuff – How To Profit With Big Ideas

ideaFailing to identify big market moves resulted in vicious double digit losses. Focusing on ‘small stuff’ won't make a portfolio whole. It’s time to forget about the small stuff and focus on the next big moves to land a home run.    If you are a go-getter, chances are you tackle any task with a full-steam-ahead attitude. Whole-souled involvement in a project however, can cause the “can’t see through the forest for the tree” effect. Clearing the mind often helps. This could be compared to being stuck in a labyrinth and getting help from someone with a birds-eye view of your situation.

When it comes to investing, it’s easy to get sidetracked by factors that seem important but in essence cloud your judgment. This article is designed to provide a “birds-eye view” of the current investment environment.

Right now for example, it’s earnings season. Not a day goes by where a company doesn’t either exceed or fall short of their earnings. The market rallied when Wells Fargo (NYSE: WFC) beat estimates but dropped when Goldman Sachs (NYSE: GS) also beat estimates. What does that mean?

Small stuff distractions There is at least a hand-full of commonly used indicators and time wasters that could be filled away in the “don’t sweat the small stuff” drawer. None of them alone is bad per say, but they might keep you from focusing on what’s really important (more about that later).

Distraction No. 1: Stock picking Buying individual stocks is exciting but dangerous. One piece of bad news might send a stock tumbling (or vice versa). Hyped up stocks tend to fall harder and faster than the broad market. Numerous studies show that baskets of stocks (or indexes) perform better than stock pickers. Mutual fund managers are an outstanding specimen of stock picking under performance.

Not only are broad market indexes and sector indexes safer, they are also easier to predict. Back in October 2008 for example, the ETF Profit Strategy Newsletter marked financials as a “down-ward spiral with no stop-loss protection.” At the time, we did not know which companies would go under, but it was clear that ETFs like the Financial Select Sector SPDRs (NYSEArca: XLF) should be avoided.

Full Story:

NYSE:XLF April 27, 2009 1:25pm

Using 3X ETF’S be sure you use them correctly

NYSE:FAS April 27, 2009 9:40am

Will Gold Get the Flu? (GLD, GDX, IAU)

swine-fluGold is not being used by industry right now and demand for jewelry remains highly unexciting, but many traders are still using the shiny metal stuff for the ultimate flight to safety for protecting against uncertainty and inflation. Some ETFs we track, SPDR Gold Shares (NYSE:GLD), Market Vectors Gold Miners ETF (NYSE:GDX), and iShares COMEX Gold Trust (NYSE:IAU) were all off around 1% in pre-market trading this morning........ ...........If the threat to global health and the global economy from the swine flu worsens, gold prices could move up. Full Story:
NYSE:GLD April 27, 2009 9:24am

Three ETFs In The Line Of Fire (RWR, IHF, XRT)

fire1As the first-quarter earnings season continues to heat up, more casualties are likely. Some sectors of the market are better positioned than others to survive, but here are three sector-focused ETFs currently in the line of fire. A Shaky Foundation Real estate has been a focus of the economic storm for some time. It comes as little surprise that the SPDR Dow Jones Wilshire REIT ETF (NYSE:RWR) now sits 55.8% below its trading price a year ago. This ETF holds 80 stocks and has exposure to commercial, residential and healthcare REITs.  Simon Property Group (NYSE:SPG), which accounts for 8.4% of the fund's net assets and is its largest component, has said it has been compelled to significantly cut back its development spending. However, the company's 2008 funds from operations (FFO) actually increased 8.8% on a per-share basis when compared to 2007. Pressure on occupancy rates and earnings are still likely to plague many names in this fund. Dividend cuts and forecast revisions could also be forthcoming. This earnings season should tell us how much rebuilding lies ahead for this ETF. (For more, see The Risks Of Real Estate Sector Funds.) Full Story:
NYSE:IHF April 27, 2009 9:14am

China’s big gold buy barely kept pace with forex

goldSINGAPORE, April 24 - The big surprise in China's revelation on Friday that it has secretely added over 450 tonnes of gold to its foreign reserves over the past six years may be the fact that it hasn't bought far more than that. Now, many analysts say the rare public disclosure may be a prelude to Beijing accelerating its purchases -- possibly from big government agencies or central banks -- as it worries about the erosion of its $2 trillion cash pile. In the first public comment on top-secret gold holdings in years, Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told Xinhua news agency that the country's reserves had risen by 454 tonnes from 600 tonnes since 2003. He said the gold had been purchased from domestic production. The figure confirmed what many gold bugs have suspected for years -- that Beijing has been quietly amassing reserves. The surprise is actually how conservative its approach has been. As a proportion foreign exchange reserves, which have risen five-fold over the same period, gold now stands at a tiny 1.6 percent, versus 1.7 percent in 2003, according to Reuters calculations, suggesting Chinese disenchantment with the dollar has yet to significantly influence its buying patterns. Full Story: Related Story:
NYSE:GLD April 27, 2009 9:04am

Uranium Rises for a Second Week on Speculation About ETF Buying (NLR)

uraniumApril 27 (Bloomberg) -- Uranium rose 6 percent, advancing for a second straight week, on speculation about possible buying of the nuclear fuel by an exchange-traded fund. Uranium-oxide concentrate for immediate delivery climbed $2.50 to $44 a pound, Denver-based pricing service TradeTech LLC said in a report on April 24. Prices gained in the prior week for the first time in almost six months. “Short-term bullish momentum may come from one of the uranium ETFs possibly raising money to buy uranium in the spot market over the next three to six months,” Max Layton, an analyst at Macquarie Group Ltd. in London, said by telephone. Nufcor Uranium Ltd., located in St. Martin, Guernsey, and Vancouver-based Uranium Participation Corp. are the world’s only publicly traded investment holding companies that invest in the nuclear fuel, according to a March 4 report by brokerage firm Raymond James & Associates Inc. “We are still strong believers that the spot price will double from its lows over the next two to three years as the market moves into deficit on strong Chinese demand growth,” Macquarie said in a report. The bank predicted a “return of investors” as prices increase. Full Story:
NYSE:NLR April 27, 2009 8:31am

Be an Oil Refiner in Your Spare Time

oil-refineryMost of us didn't aspire to the oil refining business as kids. Doctors or firefighters, maybe; not oil refiners. Nowadays, if the comments made on our weekly oil industry reports (see this week's at "Awash In Oil; Gasoline And Distillates, Too"), are to be believed, everybody wants to be a hydrocarbon cracker. Or at least make money like one. Upon reading that crack spreads (if you're not familiar with the terminology, see "Time For Crack Spreads") improved this week, one reader lambasted oil companies, saying: "If you can't squeeze consumers on crude, squeeze them at the pump." Well, consumers and investors can squeeze right back thanks to the exchange-traded fund market. ETF investors, in fact, are now doing better than refiners in the old crack game. Full Story:
ETF BASIC NEWS April 26, 2009 9:41pm

FPA accredits ETF courses as part of professional development program

course1The Financial Planning Association has accredited courses in exchange traded funds (ETFs) as part of its continuing professional development program. The program was developed by ETF provider iShares Australia. “More and more intermediaries are recommending ETFs to their clients. And, as awareness of ETFs grows among Australian investors, there is greater need for intermediaries to be well informed [about] the benefits of ETFs and how they can be used in their clients' portfolios,” said co-head of iShares Australia Tim Bradbury. The first two training modules are about the basics and liquidity of ETFs. iShares will release more training modules in the next few months. According to a statement from the group, while there has not been any new information released on future courses, they were likely to include information on international trading and tax issues. Full Story:
ETF BASIC NEWS April 26, 2009 8:58pm

Investing, ETF’s and the Swine Flu?

pigSARS affected Hong Kong, Singapore, Taiwan, and other Asia countries from November 2002 to June 2003. Business travel and tourism were dramatically cut, retail sales collapsed, impacting the already fragile economy (as it was just coming out of the 01-02 recession driving by collapse of Tech bubble)....... ......While I would hate to profit from something like this, in case the Swine Flu does turn out to be as widespread as the Asian SARS experience, the best investment opportunity for this is EWW (ETF for Mexico). However, as we follow WHO and other countries being impact, there may be other markets that may experience similar patterns. For those with more expertise in medicine, I'm sure there is a pharma / bio-tech play of some sort ... I'll leave it to them to capitalize on need of vaccine. Full Story:
ETF BASIC NEWS April 26, 2009 5:14pm

Gold investment set to soar as market dynamics shifting

gold1INTERNATIONAL. Gold investment as a proportion of total demand is expected to reach a new high in the quarter as the structure of the market is changing, according to a senior World Gold Council(WGC) official. Marcus Grubb, managing director of investment research and marketing at the WGC, said: "You are seeing a shift in the dynamic of the gold market." In 2008, Gold Investment demand accounted for 30% of overall gold demand, while jewellery demand contributed approximately 58% of the total. Grubb explained that concerns over the global economy and a desire to diversify look set to reverse that trend. Speaking this week at an ETF securities seminar in London, he said: "The structure of the gold market is changing. In the first quarter I think investment demand could be higher than 30%." "ETF investment is in its infancy, and so is gold investment," he said. "Most allocations of gold are zero." "You would only need a small shift in allocations to gold in segments of private and institutional wealth where they're not currently invested to have a major impact, when mining supply is only 2,400 tonnes a year." He said gold supply was likely to be supported by scrap inflows, which he said will probably head above 1,500 tonnes this year, offsetting flat or slightly declining mine supply. "The growth in investment is extremely strong," he said. "It is being led to some extent by ETFs." Full Story:
ETF BASIC NEWS April 26, 2009 8:10am

Waiting for the Inverse Treasury ETF’s Glorious Day

debtWe have all heard that there is a great deal of U.S. debt owned by China and other Asian countries, but here is the breakdown of over $3 trillion that is on loan to the world. Obviously Ben and the team need to keep a lot of people happy and are continually juggling the needs of America with the concerns of the world. For now, rates will stay artificially low to keep all happy. There will be a time though that we see a change in the pricing, once the Fed stops purchasing non-stop. That day will be a glorious move for the Inverse 20-year Treasury ETF (TBT). Of course first we need to see our economy improving, so I don’t think that you will miss the move. Keep TBT on your watch list. Full Story:
NYSE:TBT April 26, 2009 8:03am

Leveraged ETFs Beat Margin

leverage2Leveraged ETFs are convenient, but are they more efficient and effective than traditional margin leverage? In this report we compare performance of both in up and down markets and consider qualitative differences. Overall, we find that leveraged ETFs are still the preferred method for making big bets on market direction. Traditionally leverage is obtained by borrowing money from a broker at margin loan rates and then either buying an ETF or selling it short. Alternatively, one can buy so-called leveraged ETFs which contain all leverage and margin costs. They come in long and short flavors and typically ratchet leverage up by a factor of two. First let us compare how the two strategies handle the ubiquitous S&P 500 in bull and bear markets. On the one hand we buy SPDR 500 (NYSEArca:SPY), the giant S&P 500 ETF, once with cash on hand and again on margin for double exposure. On the other hand we buy Rydex 2x S&P 500 (NYSEArca:RSU), a leveraged ETF targeting double daily returns (discussed later). RSU wins handily in the bear market of 2008 and just slightly in the March 2009 bull run: 
  Bear market: 2008 Bull market: March 9-31
SPY return - 34.6% 17.6%
SPY 2X -69.2% 35.2%
less 5% margin 5.0% 0.3%
net return -74.2% 34.9%
RSU -65.2% 36.5%
 When we consider a shorting scenario, results are mixed. Here we compare Rydex 2x Inverse S&P 500 (NYSEArca:RSW) which targets the inverse of double daily S&P 500 returns against a double short position where cash on hand is posted as collateral to short once and another short position is made with a margin loan. RSW trails by 8% during the 2008 bear market and wins in the 2009 spring bull market by 4%. 
  Bear market: 2008 Bull market: March 9-31
SPY return 34.6% -17.6%
SPY 2X 69.2% -35.2%
less 5% margin 5.0% 0.3%
net return 64.2% -35.1%
RSU 56.3% -31.5%
 Now we turn to the closely watched sector of financials. Here we compare ProShares Ultra Financial (AMEX:UYG), which tracks double daily returns of the Dow Jones Financial Index, against going long twice on iShares Dow Jones US Financial Sector ETF (NYSEArca:IYF), which tracks the same index without leverage. UYG wins handily during the 2008 bear market and again less dramatically during the Spring 2009 bull market: 
  Bear market: 2008 Bull market: March 9-31
IYF return -47.7% 35.6%
IYF 2X -95.3% 71.2%
less 5% margin 5.0% .03%
net return -100.3% 69.9%
UYG -83.3% 74.0%
Full Story:
ETF BASIC NEWS April 26, 2009 7:55am

How to Be a Better Investor With ETFs

investorGetting back into the market is nerve-wracking enough, let alone picking the stocks that you think are winners; by using exchange traded funds (ETFs) you can take the guesswork out and mitigate some of your risk. If you are thinking about getting back into the market but do not want to play a guessing game, a low-cost indexing approach may be the answer for your portfolio. Index funds take the guesswork out of investing by tracking the performance of an entire market sector, says Barbara Drury for the Sydney Morning Herald. The cost is much lower than paying a manager to pick the stocks for you in a traditional mutual fund, giving the ETF another plus. There are two types of index fund: listed exchange-traded funds (ETFs) and unlisted index funds, and there are about 800 or so in the United States. ETFs can also be used as a tactical tool as they allow investors to trade them throughout the day just as you would a single stock. ETFs also have good tax advantages where earnings are given untaxed to investors. Full Story:
ETF BASIC NEWS April 25, 2009 9:51pm

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