All ETF Daily News Articles

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:  http://247wallst.com/2009/05/11/fasfaz-dealing-with-billions-of-dollars-of-securities-sales-from-members-fas-faz-bbt-cof-pfg-wfc-usb/
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: http://money.ninemsn.com.au/article.aspx?id=812238
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 (www.eia.doe.gov/emeu/aer/txt/ptb0901.html), the Nuclear Regulatory Commission (www.nrc.gov) 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 (www.eia.doe.gov) 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 (www.nrc.gov/reading-rm/doc-collections/commission/speeches/2009/s-09-008.html). 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 (www.etfdigest.com) Publisher David Fry favor Van Eck Associate's (www.vaneck.com) 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' (http://us.ishares.com) iShares S&P Global Nuclear Energy (NUCL), thus offering investors a tighter bid/ask spread. Full Story: http://online.barrons.com/article/SB124182248204002189.html?mod=googlenews_barrons
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: http://www.commodityonline.com/news/Gold-investment-demand-wanes-ETFs-in-dry-spell-17665-3-1.html
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:  http://www.chicagotribune.com/business/yourmoney/sns-yourmoney-0510pharma,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:  http://seekingalpha.com/article/136798-how-is-the-new-hedge-fund-strategy-etf-doing
NYSE:QAI May 10, 2009 2:18pm

Led by the iShares exchange traded fund group, exchange traded funds are poised to break the stranglehold that mutual funds have on 401(k) retirement plans

401kThe San Francisco-based unit of Barclays Global Investors launched the “iShares in 401(k)” program last month to help financial advisers use ETFs as investment options within 401(k) retirement plans. The program identifies administrative providers and networks that offer access to ETFs in 401(k) accounts, making it easier for advisers to provide the funds in clients' retirement programs alongside traditional mutual funds. The timing seems right. The massive losses in 401(k) plans — losses that can be attributed to mutual funds that in many cases are more expensive than ETFs — work to the advantage of ETFs, said Darek Wojnar, head of product research and strategy at iShares. And more 401(k) administrators and networks have cleared the technical hurdles of buying and selling ETFs and are making room for the products. “The record keepers have figured out ETFs are coming and they need to accommodate them,” said Bruce Levine, president of ETF provider WisdomTree Investments of New York. WisdomTree rolled out its own ETF 401(k) platform in 2007. With assets of $25 million spread among 10 plans, Mr. Levine admitted that it has been “slow going.” Industrywide, ETFs account for less than 5% of the assets in 401(k) plans, Mr. Wojnar said. Full Story: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090510/REG/305109977/1025/ETF
ETF BASIC NEWS May 10, 2009 10:04am

BC Partners enters a 3.5 billion pound bid for iShares

breakingnewsiShares are units of families of exchange-traded funds (ETFs) managed by Barclays Global Investors. LONDON (Reuters) - Barclays Plc (BARC.L) said on Sunday it has received new interest from both trade and private equity buyers for its iShares funds business, responding to a media report that said BC Partners might trump last month's agreed bid from CVC Capital Partners.  A Barclays spokesman said there had been "tremendous" interest in iShares from "both strategic and private equity" since April 9, when Barclays agreed to sell the asset management firm to private equity company CVC for 3 billion pounds ($4.4 billion) but kept the right to hunt for a better deal until June 18.  The spokesman said it was "way too early to speculate if there will be a better offer and from whom."  The Sunday Times newspaper said that buyout firm BC Partners has lodged a 3.5 billion pound bid for iShares.  The newspaper said it was not clear whether CVC would be willing to match the higher offer from BC Partners, which it said was being advised by Perella Weinberg.  The Daily Telegraph said on its website on Sunday that Barclays has got at least two counter-offers for iShares, with private equity groups Apax, BC Partners and Hellman & Friedman all having been looking at trumping the CVC offer. Full Story: http://www.reuters.com/article/innovationNews/idUSTRE5490VZ20090510
ETF BASIC NEWS May 10, 2009 9:46am

Why Solar, ETFs Are Gaining More Power

solar-homesSolar panels are one of the easiest modern conveniences for hose who prefer green energy, particularly solar power. A plan to have utilities purchase power from homeowners could jump-start the industry and related exchange traded funds (ETFs).Installing small solar panels in your home is a great way to use the natural energy supplied by the sun, as well as saving on energy and utility costs down the line. Many times, the homeowner does not use the full amount of energy generated by the sun, so can utility companies tap into the leftover energy and supply the grid with extra power? Jennifer Collins for MarketPlace reports that there is another twist: imagine if the utilities had to buy any extra power you generated! As of now, any extra energy that a household generates and does not use goes back to the power company - free. Full Story:  http://www.etftrends.com/2009/05/why-solar-etfs-are-gaining-more-power.html
ETF BASIC NEWS May 9, 2009 6:54pm

Rallying For Real

safeAfter two months of stocks heading higher with lagging economic data still predictably bad, it's time to admit we're in a recovery. There can be no doubt the bears are back on their heels for the moment, as markets have experienced recovery at a breakneck pace. Not only is the S&P SPDR (SPY) up well more than 30% above its March 6 lows, but other areas like the iShares Dow Jones Transportation Average (IYT), up 55% off its bottom, and the beleaguered Financial Sector (XLF), up nearly 100%, have participated. The super-cyclical Consumer Discretionary Sector SPDR (XLY) is up 47%, while the supposedly nuclear-waste-laden S&P Homebuilder Index (XHB) is up an astonishing 69% from its low. For those investors who sold at the pinnacle of panic dates--Oct. 10, 2008, Nov. 20, 2008, and March 6, 2009--the new owners of your shares thank you. While I can't speak for the likes of Mr. Buffett, I surmise his next annual report will unveil his willingness to profit from hysterical emotion-driven selling of great assets at low prices. Full Story: http://www.forbes.com/2009/05/08/ishares-transportation-dow-personal-finance-financial-advisor-network-etf-portfolio.html?partner=yahootix
ETF BASIC NEWS May 9, 2009 11:11am

Forget The Analysis, Just Buy Everything

buy-nowLast year, shareholders everywhere simply lost faith in stocks, selling off both undervalued and overvalued ones. You could tap computer keyboards, pore over balance sheets and examine price charts to identify superb companies in which to invest, only to see your "bargain" stock become an even bigger one as your fellow shareholders dumped their shares, convinced the world was ending. Hence the theory: If all stocks move in lockstep based on investors' general attitude toward owning equities, you might as well forget the analysis and buy everything -- specifically, an exchange-traded fund (ETF) that holds hundreds of stocks from all over the world. All broad-based ETFs have tracked the same path as the markets, bubbling along nicely until last summer, then plunging and hitting a multiyear low on March 9. True to form, all have since roared back with the markets over the past two months. Investors who want to own everything in a single ETF should consider the Vanguard Total World Stock Index Fund (VT/NYSE), said Norman Rothery, founder of StingyInvestor.com. The fund's management expense ratio of 25 basis points "is a bit high," he said, noting a lower MER can be achieved by combining a fund that tracks the U. S. market -- the Vanguard Total Stock Market ETF (VTI/NYSE), which has an MER of 0.07% -- with something like the Vanguard Europe Pacific ETF (VEA/NYSE), with an MER of 0.15%, "so it can be a cheaper approach, but if you're looking for total simplicity, you can get it down to one fund." Our online search found that most "global" exchange-traded funds are dominated by the same handful of U.S. giants: Exxon Mobil Corp., Microsoft Corp., AT&T Corp., Johnson & Johnson, Procter & Gamble Co., Chevron Corp., General Electric Co. and IBM Corp. Although these companies have international operations, the ETFs that hold them seem more American than global. Similarly, MSN's Moneycentral site (moneycentral. msn.com/investor) lists 17 ETFs under the category of "world stock," but many represent plays on individual sectors -- industrials, consumer staples, agriculture, gaming, luxury goods, shipping and so on. If you buy such a sector ETF, even one diversified geographically, your hunch about the industry must be correct for your investment to outperform the overall index. If you are not an industry insider, you're just guessing. So, again, you might as well buy everything. The Yahoo Finance site's ETF browser (finance. yahoo.com/etf) lists 19 funds under the category of "foreign-large blend," referring to funds that hold large-cap stocks from developed countries outside the United States. The largest is the US$29.62-billion iShares MSCI EAFE Index Fund (EFA/NYSE), which indeed owns everything, with 838 large-cap stocks. Its 10 largest holdings each account for less than 2% of the fund: Nestle SA, BP PLC, Total SA, Roche Holding AG, Vodafone Group PLC, Novartis AG, Toyota Motor Corp., Telefonica SA, GlaxoSmithKline PLC, Royal Dutch Shell PLC, BHP Billiton PLC and HSBC Holdings PLC. Full Story:  http://www.nationalpost.com/story.html?id=1580238
NYSE:EFA May 9, 2009 9:51am

Closing Of Unloved ETFs Could Start A Trend

closedInvestors in exchange-traded funds are learning that you’d rather be in "what sticks" than what falls by the wayside. Invesco PowerShares Capital Management announced last week that it would close 19 ETFs on May 18, the single biggest mass killing of exchange-traded funds in the history of the business and the continuation of a small trend that started in 2008 involving the liquidation of tiny funds that can’t attract enough market share. "After carefully evaluating numerous factors including shareholder considerations, length of time on the market, asset levels and the potential for future growth, we proposed closing certain portfolios that have not gained sufficient acceptance with investors," Bruce Bond, president and chief executive of Invesco PowerShares, said in a statement. "We remain fully committed to the ETF industry and expect to offer new, exciting products in the months ahead." And therein lies part of the problem. The exchange-traded fund business is in the rapid-growth phase where every idea, no matter how scatterbrained, gets a tryout. Fund companies are so eager for market share that they’re throwing every concept at the wall to see what sticks. In the PowerShares case, the funds that have fallen are a rogue’s gallery of the uninspired and unloved. While the 19 funds represent nearly 15 percent of the PowerShares lineup, their $122 million amounted to less than 0.5 percent of the company’s assets under management. Among the motley crew are PowerShares Dynamic Aggressive Growth, Dynamic Hardware & Consumer Electronics, FTSE RAFI Asia Pacific ex-Japan Small-Mid Cap, High Growth Rate Dividend Achievers and sector funds covering everything from utilities, telecommunications and technology, international real estate, healthcare, consumer goods and more. Full Story:  http://www.star-telegram.com/business/story/1366416.html
ETF BASIC NEWS May 9, 2009 9:22am

The Economic Data Is Better, But The Bears Are Patiently Waiting On The Sidelines!

bear-sittingFirst, April was not nearly as good as the bulls made it to be. Yes, the Dow Jones Industrial Average ($DJI) surged 5.5% during the first half of the month. But, in the second half, momentum slowed with the average rising just 1.7%. Even then, the statistics don't tell the whole story. From the Apr 16 close to the Apr 30 close, the Dow gained a mere 43 points, or 0.5%. That's a big difference in return for someone who bought the Dow Diamonds ETF (DIA) on Apr 16 instead of just a couple of weeks earlier. (DIA is an ETF that tracks the performance of the Dow.) Secondly, volume is not signaling a lot of conviction on the part of buyers. Throughout March, the SPDR S&P 500 ETF (SPY) experienced average volume of 400 million shares per day. In April, daily volume declined to 287 million shares. Yet, during this entire time, stocks have risen. And the higher they go, the more the rally is losing steam. That's not good. Thirdly, I'm worried about the banks. Yes, everyone passed the stress test, but it was a questionable test to begin with. Plus, Bank of America (BAC) and 9 others have lots of time to raise funds. But, foreclosures are still rising, credit card defaults will get worse and, despite all of the analysis, nobody still knows how to value the toxic assets. The government might keep the large banks afloat, but their stock prices and earnings could still suffer. And that alone would cause problems for the stock market. Not to mention that financial stocks (and related ETFs such as Financial Select Sector SPDR (XLF)) are overdue for a pullback based on technical analysis alone. Fourthly, as earnings season comes to an end, we should see fewer positive revisions to profit forecasts. The ratio of positive to negative revisions typically falls after earnings season, even during good times. I don't see any reason for this to change. A drop in positive revisions would be one less catalyst for stocks to go higher. Finally, the General Motors (GM) situation remains unresolved. If bankruptcy proceedings turn messy, it will cause a big disruption across the entire automotive industry. This, in turn, could create problems for the market. Full Story:  http://www.zacks.com/stock/news/20018/The+Economic+Data+Is+Better,+But...
NYSE:DIA May 8, 2009 4:57pm

Huge flows into emerging-market funds in past week: Brazil’s second-biggest inflow ever; China, Taiwan, India and Russia also benefit

emergingmarketsNEW YORK (MarketWatch) -- Emerging-market equity funds saw inflows of $4 billion in the week ended May 6, the largest weekly inflow since early December and the eighth largest on record, Merrill Lynch said Friday. Buying of exchange-traded funds was mostly responsible, but investing in funds that take long-only positions also saw strong inflows, Merrill said. Long-only funds represent one-way bets from investors ready to embrace more risk. Both the iShares MSCI Emerging Markets Index (EEM) and the Vanguard Emerging Markets Stock ETF (VWO) have rallied impressively, up 8% over the past week. That compares with a 5% weekly gain for the S&P 500 index (SPX). Brazil, in particular, saw very large flows, garnering its second-largest weekly inflows on record, while China, Taiwan, India and Russia also saw big gains. Merrill's data show the pace of inflows into emerging-market funds has been strong and accelerating, totaling $14 billion over the past seven weeks. For the year to date, the MSCI ETF is up nearly 26%, while the Vanguard ETF is up nearly 29%, far and away outpacing the 2.4% gain for the S&P 500. Merrill Lynch said that its own emerging-markets trading indicator remains in "sell" territory but that this gauge continues to "be wrong-footed" by the big economic and financial policy stimulus being put in place in various emerging markets, as investors go increasingly for reallocation of assets into global equities. Full Story:  http://www.marketwatch.com/news/story/emerging-market-funds-attract-huge-flows/story.aspx?guid=%7BE848D774%2D9D03%2D4585%2D9C43%2D5C84BA51CA65%7D&siteid=yhoof
ETF BASIC NEWS May 8, 2009 4:51pm

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