All ETF Daily News Articles

ETF’S HAVE ONE OF THE BEST MONTHS IN YEARS!

etf-news1

March ETF Performance Report 

March 31, 2009 at 1:40 pm by Tom Lydon www.etftrends.com  March was one of the best months in years for the major indexes and exchange traded funds (ETFs). The Dow Jones Industrial Average rose 7.7% for March, but lost 12.2% this quarter. While no one is declaring the problems in the economy fixed, some strategists say that there’s at least a change in perception. Earnings season is now beginning, and many are nervous about what the reports will bring. The S&P 500 rose 8.5% for the month and fell 10.4% for the quarter. The Nasdaq gained 10.9% in March, but lost 1.4% in the quarter. The strongest sector for the month was solar energy, which rose 29%. For the quarter, gasoline was a standout, gaining 33.5%. For a complete look at the month of March, as well as the first quarter of 2009, click through to see our March ETF Performance Report.
ETF BASIC NEWS March 31, 2009 6:51pm

U.S. Traded ETF Sponsor Sites

U.S. Traded ETF Sponsor Sites   SOURCE: www.masterdata.com   Below is a listing of all U.S. traded ETF Sponsors with actively trading Exchange Traded Funds
ETF BASIC NEWS March 31, 2009 1:49pm

Retail Service Industry Betting On Consumer Confidence?

shopping Ultra Consumer Services ProShares (UCC) is an ETF that bets on the consumer spending money.  UCC includes companies like Home Depot, McDonald's, CVS, and Walmart, etc...  If the consumer is
NYSE:SCC March 31, 2009 10:54am

Commodities Stumble As the Market Retraces!

commodities Commodities: Crude Oil, Gasoline Decline Most commodities were weaker in the U.S. Monday, with the majority of agricultural futures joining energy and metals on the downside. Crude oil dropped $3.97 to $48.41 a barrel at the New York Mercantile Exchange, and reformulated gasoline was off 11 cents at $1.38 a gallon. Heating oil lost 9 cents to $1.34 a gallon, while natural gas rose. Gold fell $7.60 to $917.70 an ounce, and silver was weaker by 23 cents at $13.03 an ounce. Aluminum and copper also slipped. Cocoa, cotton and wheat rose, but frozen concentrated orange juice, soybeans, coffee and corn fell. Prices for lean hogs and cattle retreated. The Reuters/Jefferies CRB Index gave back 7.09 points to 215.17. On a day that the stock market overall sold off, most commodity-related stocks were sluggish, as well. Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks) was down 1.9% at $68.63, and Chevron (CVX Quote - Cramer on CVX - Stock Picks) lost 3.1% to $66.80. ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) surrendered 3.3% to $39.02. Miners BHP Billiton (BHP Quote - Cramer on BHP - Stock Picks) and Rio Tinto (RTP Quote - Cramer on RTP - Stock Picks) shed around 6% each, and Freeport-McMoRan (FCX Quote - Cramer on FCX - Stock Picks) lost 8.5%. As for exchange-traded funds, the U.S. Oil (USO Quote - Cramer on USO - Stock Picks) was down 6.7% at $28.70, and the Gold Shares (GLD Quote - Cramer on GLD - Stock Picks) edged lower by 0.8% to $89.98. The Market Vectors Agribusiness (MOO Quote - Cramer on MOO - Stock Picks) fell 5.5% to $28.12. Source: www.thestreet.com
NYSE:GLD March 30, 2009 9:24pm

Nikkei up 1.8% Sluffing off GM Bankruptcy News

nikkei* Nikkei gains 1.8 pct after falling 4.5 pct on Monday * Yen's fall vs dollar helps exporter shares By Rika Otsuka TOKYO, March 31 (Reuters) - Japan's Nikkei average rose 1.8 percent on Tuesday as investors picked up exporters like Honda Motor Co (7267.T) that had slid the previous day on fears of bankruptcy for U.S. automakers. Mizuho Financial Group (8411.T) fell after saying it would not redeem $1.5 billion of perpetual subordinated bonds issued to retail investors when they first become callable next month given current market conditions. [ID:nT127312] U.S. stocks tumbled on Monday as General Motors Corp (GM.N) and Chrysler LLC took a step closer to potential bankruptcy, and a spate of European bank rescues heightened concerns over the financial system's health, putting the brakes on a recent run-up. [.N] "The Japanese stock market opened weaker, dragged down by U.S. stocks, but it soon regained ground as investors thought the previous day's fall provided a chance to buy," said Yutaka Miura, senior technical analyst at Shinko Securities. "The issue of GM and Chrysler is unlikely to spark heavy stock selling again, though it may cap gains in shares," he said. The benchmark Nikkei .N225 climbed 146.58 points to 8,382.66, while the broader Topix rose 1 percent to 797.10. A panel of Japan's ruling Liberal Democratic Party said on Tuesday it would come up with a system to allow a government agency to buy shares from the market, though the market showed muted reaction as investors awaited details of the plan. Mizuho Financial Group, Japan's second-biggest bank, fell 1 percent to 195 yen after it said it would not redeem the perpetual subordinated bonds. But shares of Mitsubishi UFJ Financial Group (8306.T), Japan's top lender, rose 1 percent to 493 yen, while No. 3 Sumitomo Mitsui Financial Group (8316.T) added 2.6 percent to 3,610 yen as investors bought back stocks battered in Monday's sell-off. Sony Corp (6758.T) and other exporters rose as the yen weakened against the dollar, which was climbing towards 98 yen <JPY=>. Sony rose 1.7 percent to 2,095 yen, Honda Motor Co (7267.T) rose 2.2 percent to 2,350 yen and Canon Inc (7751.T) edged up 0.5 percent to 2,915 yen. (Reporting by Rika Otsuka; Editing by Chris Gallagher) Source: www.reuters.com
ETF BASIC NEWS March 30, 2009 9:06pm

Gold ETF Holdings Hit Record

goldSource: reuters.com * Gold ticks up as auto news batters stocks * Gold up about 5 pct on quarter * SPDR hits new high, silver trust holdings stay at record * Activity subdued due to month-end (Releads, updates prices) By Chikako Mogi TOKYO, March 30 (Reuters) - Gold nudged up on Monday after stocks were battered by a U.S. task force rejecting the turnaround plans of big automakers, underscoring scepticism about an economic recovery. The Obama administration autos task force on Monday rejected overhaul plans of General Motors Corp (GM.N) and Chrysler LLC and warned both could be put through bankruptcy to slash debts. [ID:nLU152601] [ID:nN29520526] Tokyo shares steepened their decline and were down nearly 4 percent after the news, against the morning's drop of 1.8 percent. [.T] "How U.S. stocks and bonds will react to the auto news will be key for the gold market, but judging from Nikkei's slide it looks to be a positive for gold," said a dealer at a Japanese trading firm. Gold was at $925.00 per ounce by 0530 GMT, up 0.3 percent from New York's notional close of $922.10. Gold fell 3 percent last week but has held firmly above $900 thanks to buying related to gold-backed securities. At current levels, gold is up about 5 percent on the quarter but about 10 percent below an all-time high of $1,030.80 hit a year ago. Bullion has recovered about 5 percent from a six-week low of $882.90 hit on March 18, but is 8 percent off the 11-month high above $1,000 set in February. Stabilising stock markets and the dollar's rise over the past week after the U.S. government announced measures to clean toxic assets off banks' balance sheets put a cap on gold prices, undermining the yellow metal's appeal as a safe haven. Still, uncertainties over the sustainability of a stock market rally and the dollar's rise, as well as the global economic outlook, kept investor appetite intact, resulting in record holdings of gold-backed securities. "The stock market is stabilising and investors are stopping their safe-haven buying of gold," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. At the same time, there was nothing to justify selling of gold because it was unclear how the economy would fare, he said. It has been six months since the collapse of Lehman Brothers, which aggravated the financial crisis, and the global economy and financial system have yet to show a clear sign of a turnaround, traders said. "Unless the economy really starts working and stock markets rally, banks start lending and businesses revive, people will not jump out of the gold market," Leung said. Trading was subdued due to the month-end and as some players turned cautious ahead of U.S. nonfarm payrolls data due later in the week. There were few expectations of the meeting later in the week of the G20 group of the world's biggest economies, traders said. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said holdings rose 2.45 tonnes to a record 1,127.44 tonnes on March 29. [GOL/SPDR] For details on the gold holdings of the ETF listed in New York and co-listed on other exchanges, click on: here The dollar fell nearly 1 percent against the yen but firmed against the euro after the single currency posted its biggest one-day fall since early January on Friday. [USD/] Later on Monday, data on British consumer credit and mortgage lending for February and euro zone March business climate sentiment will be released. Prices as of 0535 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 925.45 3.35 +0.36 5.15 Spot Silver 13.32 0.05 +0.38 17.67 Spot Platinum 1132.50 9.50 +0.85 21.51 Spot Palladium 215.00 -2.50 -1.15 16.53 TOCOM Gold 2901.00 -59.00 -1.99 12.75 32437 TOCOM Platinum 3571.00 -72.00 -1.98 34.65 10523 TOCOM Silver 411.30 -12.10 -2.86 28.81 294 TOCOM Palladium 678.00 -28.00 -3.97 23.27 693 Euro/Dollar 1.3206 Dollar/Yen 96.96 TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce. (Additional reporting by Risa Maeda; Editing by Ben Tan)
ETF BASIC NEWS March 30, 2009 8:26pm

A Rise in unemployment doesn’t necessarily mean we didn’t hit bottom

goodbad It's hard to find signs of life in the economy, but the signs of death seem to be growing fainter. In what passes for good news these days, Treasury Secretary Timothy Geithner told CNBC last week, "You're seeing the pace of deterioration start to slow in some areas." Investors who share an inkling that the worst could soon be over have started a revival in the stock market. Since its March 9 low, the Standard & Poor's 500 index is up 20.6 percent, although it is still 48 percent below its all-time high in October 2007. Generally, a 20 percent increase qualifies as a bull market. Whether this year's March madness marks the beginning of a new bull market, or a temporary rally in an ongoing bear market, is an important question not just for investors, but for everyone. Why? Because the stock market is a fairly reliable leading indicator of the economy. Over the past 60 years, recessions typically ended four or five months after a new bull market began, according to Sam Stovall, S&P's chief investment strategist for equity research. During this period, the S&P 500 correctly anticipated the end of a recession 9 out of 10 times, he adds. The exception was in 2000 to 2002, when the economy recovered before the stock market. If stocks really did hit bottom on March 9 - and that's a big if - history would suggest that the recession could end in the third quarter of this year. Employment, considered a lagging indicator, wouldn't pick up until months after that. In Stovall's study, the unemployment rate didn't start falling until about four months after a recession ended, and eight or nine months after a bull market began. S&P economists say the current recession will end late in the third quarter of this year. That's when things "will stop falling. It doesn't mean things will be getting better," Stovall says. He predicts that the U.S. unemployment rate, 8.1 percent in February, will peak at 9.75 percent in the second quarter of 2010 and decline very gradually in the second half. If the stock market has not really embarked on a new bull market, then a recovery in the economy and employment would come even later. Brief outbreaks of optimism are common during long bear markets. Between Nov. 20 and Jan. 6, the S&P 500 surged 24 percent, only to plunge back to a new low on March 9.

5 bear rallies in 1930s

During the early 1930s, the Dow Jones industrial average staged five bear market rallies of 20 percent or greater before hitting an ultimate bottom in 1932. The most famous was a 48 percent gain in 1930. Tom McManus, chief investment officer with Wachovia Securities, says the market will give up at least half of its March gains. "We are in a bottoming process, where the market is winnowing out the winners from the losers," he says. "March 9 was probably a bottom for the quality stocks. It's probably not a bottom for the lower-quality stocks." He says there's a 40 percent chance the overall market could fall below its March 9 low.

Durables are volatile

McManus doesn't put much faith in the signs of stabilization that some analysts see, such as better-than-expected reports on durable goods, home sales and retail sales. Durable goods is so volatile, he says, "I would never use it as a signal the trend has changed." Some analysts cheered when the government reported that retail sales in February were down only 0.1 percent (economists were expecting a 0.5 percent drop) and revised January's surprise increase upward to 1.8 percent from its original estimate of 1 percent. When you look at the drop in retail sales over the previous three to four months, "the size of the improvement is microscopic," he says. "It's like saying your kid took a test and got 1 right out of 20. The next time he got 2 right out of 20. You could say, 'Wow, he did twice as well.' But it was still horrible." McManus says the S&P 500 might "bounce around 700-900 for another six months." It closed Friday at 816. Its low on March 9 was 677. He says the economy will start to recover at the end of 2009 or early next year. He warns that investors should not try to pick the exact bottom. Instead, they should put money into the market gradually over the next six months. Five years from now, that will look like a very smart investment.

Patience can pay off

"The valuations are very attractive. Someone who is patient can make money. Focus on improving the quality of your portfolio," he says. That means dumping stocks that have gone down the most and putting money into high-quality companies that have been hurt less. Rob Arnott, chairman of Research Affiliates, is gloomier on the economy. "I don't see how the economy can turn around while we are engaged in this massive de-leveraging," he says. "Resources are being siphoned to pay down debt, both household and corporate debt. This process is going to take time, a lot of time. It's dangerous to assume the economy can suddenly pick up when the de-leveraging process is only just now gaining full steam."

Growth seen in 2010

Arnott says the economy won't start growing until 2010 and employment won't pick up until 2011. "I think unemployment will crest above 10 percent, perhaps significantly above. This will be ugly," he says. For now, Arnott says investors should put money into corporate bonds, not stocks, on the theory that the stock market can't really recover until the credit markets do. He says that corporate bonds did not show the same improvement in March that stocks did. Until they do, "I don't think this is a real bull market," he says.  

Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at [email protected].

This article appeared on page D - 1 of the San Francisco Chronicle

NYSE:GLD March 30, 2009 3:58pm

ETF – FAS SET FOR REVERSE SPLIT?

etf-news The 3X ETF's put out by Direxion has gained huge popularity because of the volatility in them.  They have been a traders dream which is why there has been
NYSE:FAS March 30, 2009 11:17am

Unemployment numbers to be released Friday

unemploymentWhatever your beliefs are on whether or not the stock market has hit bottom, one thing is for certain, unemployment numbers will influence the market when the data is released this Friday. Economists are steadily increasing their estimates leaning towards  a larger number of jobs lost in the month of March.   
By Burton Frierson Reuters New York: The U.S. economy may have pulled out of its tailspin, but it is still losing altitude. Global stock markets have turned euphoric over the idea that the worst may be over for the world's largest economy, with Wall Street rallying more than 20 percent from lows reached earlier in March. Fueling this newfound optimism, unexpectedly robust economic reports last week showed signs of recovery in the beleaguered U.S. manufacturing and housing sectors. However, economists warn that it is too soon to say the United States is recovering from what will probably become the longest and deepest decline since the Great Depression. "I think it's reasonable to say that we perhaps are pulling out of the tailspin, that we're moving out of the period of free fall," said Nigel Gault, director of U.S. economic research at IHS Global Insight in Lexington, Massachusetts. "That's not the same thing as recovery being just around the corner." The president of the Federal Reserve Bank of Atlanta, Dennis Lockhart, echoed this sentiment Thursday, saying one month of improved data did not constitute an economic recovery. "Most of the data that we follow appears to signal a continuing recession, at least a few more months," Mr. Lockhart said. Indeed, data confirmed the U.S. economy shrank in the fourth quarter at its fastest pace since 1982, with a chain reaction of job losses and plummeting demand for imported goods from around the globe. Leaders from the Group of 20 industrialized and emerging economies meet this week in London to try to come to grips with the global economic crisis. The most painful vestige of the U.S. recession, the sharp rise in unemployment, will not begin to improve until long after the rest of the economy stabilizes. The scale of job destruction should be evident when the U.S. government releases monthly employment data Friday. The nonfarm payrolls report, usually the biggest event on the U.S. economic calendar, is expected to show 654,000 jobs were lost in March, according to the median in a Reuters poll of economists. Economists have already increased their forecasts for job losses. The only silver lining is that the projected total would be little worse than the 651,000 jobs lost in February. The U.S. unemployment rate is expected to have jumped to 8.5 percent in March. This would be the highest level since 1983, when the economy was still shaking off the debilitating effects of stagflation, with its low economic growth and sharp price rises. Gault, at IHS Global Insight, expects 750,000 job losses for March — which would be the worst month since 1949. He said the unemployment rate would continue rising this year before peaking at more than 10 percent in the first half of next year, perhaps well after the economy starts to grow. "The next employment report is probably going to be the worst one yet," Gault said of the March payrolls report. "Unemployment is the very last thing that turns." Other U.S. economic indicators during the week are unlikely to depart much from the gloom of the jobs report. The United States will not be able to look abroad for much help, at least for now. A report to be released Monday on Japanese industrial output is expected to show a 10 percent decline. Meanwhile, Japan has slipped to the brink of deflation. Euro zone consumer and industrial sentiment readings Monday are expected to remain negative. Similarly, manufacturing and service sector gauges to be released Wednesday and Friday are likely to remain weak. The European Central Bank's meeting Thursday may only highlight the difficulties facing the euro zone economy. Economists expect an interest rate cut but also a discussion of less common methods of easing monetary conditions. Ultimately, though, analysts figure the global economy is still trailing the United States on its slog through the quagmire, so new measures may be of little immediate help. "The rest of the world is falling into the same hole we did, but later," said Brian Fabbri, managing director of economic research at BNP Paribas. Source: www.iht.com
ETF BASIC NEWS March 30, 2009 7:50am

WHY IS EVERYONE PICKING ON THE US DOLLAR?

toilet-paper My picture describes what the US dollar has become.  The US government has spent in the tune of 13 TRILLION DOLLARS on this crisis!  This will take decades to pay back.  Benefit from a degrading dollar by using ETF - UDN.  The investment UDN seeks to track the price & yield performance, before fees and expenses, of the Deutsche Bank Short US Dollar Futures index. The index is comprised solely of short futures contracts. The futures contract is designed to replicate the performance of being short the US $ against the Euro, Japanese Yen, British Pound, Canadian, Swedish Krona & Swiss Franc.

The Dollar's Tipping Point

A defining move by the Fed last week to buy billions in treasuries and Freddie and Fannie mortgage backed securities will change the world as we know it. In my November 25, 2008 article entitled 'Deflation Dragon Disaster', I asked:
Will the unprecedented inflow of cash that is being injected into the system be enough to still the Deflation Dragon? At what point will the unyielding upward trend in the dollar be stopped in its tracks by the avalanche of FIAT sisters and brothers joining daily?
With the Fed buying 300 billion in treasuries, I believe that day of reckoning has come. Martin Weiss of Money and Markets adds up the tally of government funds committed so far as close to 13 trillion. He also reports a total of 57.3 trillion in credit default swaps. This inevitably will push the dollar down. I explained the perils of this stealth tax in my December 30, 2007 article:
I hear many smart financial people say ‘but Americans buy everything in dollars so it won’t really affect us much’. ‘It is great for increasing our exports’ they add. Yes, it does at first, but products aren’t sold on price alone but design, promotion, etc. To them I say “Foreign countries and Americans sell commodities at the international price on the Chicago Market. Cocoa beans, chocolate, oil, plastics and soy beans are all paid in US dollars at the international prices.”
I continued on to say:
The thought that you will not even hear whispered is that an unhinging of the reserve currency could happen and that would cause financial panic, plummeting stock markets, oil priced in the us dollar would rise way over $100 a barrel and the gold price, which has been shouting inflation, would quickly jump over $1000 an ounce as investors seek protection in safe havens. The government’s reserves would be gone in a few days if it had to support a dollar dive. Conversely, if we keep our dollar strong, foreign capital from the developing world will buy the US dollar and help finance the huge liabilities of social security, Medicare and interest on the national debt.
I also explained in my August 12, 2007 article:
If fear of US instability creates more selling of the dollar, interest rates will have to eventually rise considerably to lure the world back to buying the greenback.
Foreign government saber rattling by Russia and China has finally brought attention to the viability of the US dollar as the world’s reserve currency. Is a planned New World Order complete with a New World Currency backed by gold and silver all a part of the puppet show unfolding before our eyes? What would the consequences be if the world Mainstream news media has finally tackled this concept with questions this week to Bernanke, Geithner and President Obama asking if they were for a new world currency. Obviously they all said no. We know this issue will be well represented at the G20 meeting in London on April 2, 2009. If currency devaluation does come due to:
  1. A massive spending and bailout.
  2. A fear based rush out of the dollar.
  3. A planned devaluation of all G20 currencies.
Let’s look ahead at what will ensue. Is the US FIAT currency in trouble? If the last 10 days is any indication of what is to come then yes, I think it is. In order to bolster the dollar we have to quickly reverse course to squeeze out inflation and excessive liquidity by raising interest rates. The fed policy is set and this is NOT part of the present plan. One day soon, inflation’s invisible tax will soar. How much Keynesian spending does it take to purge deflation? When Japan opened the tap, their currency did not quickly fall off a cliff. Does this offer hope to the Greenback? As the FIAT Benjamins get caught like birds in the engine, will Obama be able to make a safe crash landing? As the dollar falls, you can bet on swift restrictions to moving money out of the country to safer currencies and banks. Commodities, mainly gold and oil, are caught in the vice grip. On the one side, nervous Nellie’s who know as the dollar falls gold, silver and oil will rise and those who believe the market bottom is not yet in. Demand destruction and deflationary forces could still pull oil under $50 a barrel. Gold mining companies seasonally sell off in May. Will we see the plunge protection elephant use a spring market bounce to jump on gold in May knowing this will put fear into even avid gold investor’s hearts? Probably. If you took my recommendation in August or September to load up on gold mining companies, although you should have good profits I would hold tight. If the price of gold does fall we will use the opportunity to buy more. Don’t expect prices to fall to 08 lows. This latest debasement of the dollar will just reaffirm China, Russia and the Middle East’s commitment to moving big capital into the yellow metal. Other then gold, my three favorite ways to safeguard cash from a falling dollar are the commodity rich currencies of Canada, Australia and Norway. (The Swiss Franc was borrowed en masse to make loans for Baltic country mortgages, many now under water.) If the Deflation Dragon still has more fire in him, we may yet get another chance this summer to pick up gold, silver and oil at lower prices.

Source: Jennifer Bawden www.seekingalpha.com

NYSE:UDN March 29, 2009 1:41pm

MUTUAL FUNDS A THING OF THE PAST?

old-school Mutual funds will be a way of the past in the coming years.  ETF's expense ratio's is no comparison to the way mutual fund managers drain investors wallets.  Investors will flock to ETF's for the next generation, as portfolio's adjust to change in the way we invest!  What Does Exchange-Traded Fund - ETF Mean?  www.investopedia.com A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.  
 This week's Mutual Funds and ETF stories More investors are switching to exchange-traded funds, and the mutual-fund business may never be the same. ETFs started out humbly enough, but as the stock-market declined over this decade their status has risen. Now ETFs are giving actively managed funds a literal run for their money. One look at a typical mutual-fund's dismal performance and you can understand why financial advisers in particular have embraced these index-tracking vehicles that trade like stocks. ETFs are low-cost, tax-efficient, easily bought and sold, and deliver average returns -- everything traditional mutual funds are not. When every penny counts -- especially if you're sending clients a monthly bill -- ETFs are attractive assets. But don't think mutual-fund companies are about to let the ETF bakers run away with the pie. Two of the biggest firms, Charles Schwab and Pimco, are trusted names with financial advisers, and now they're planning to give them what they want. Their entry into the ETF world is aimed at protecting this crucial base, and could spur other fund giants to join the fray in hopes of keeping disgruntled investors from jumping ship. One thing's for sure: If actively run funds don't lower expenses for money-losing shareholders, those expensive cash-cows they stable will increasingly be exchanged and traded away. Source: www.marketwatch.com -- Jonathan Burton, assistant personal finance editor
ETF BASIC NEWS March 28, 2009 1:30pm

QAI THE NEW HEDGEFUND ETF IS RAISING EYEBROWS!

eyebrows

Can the Hedge Fund ETF Actually Deliver?

By Matthew Hougan  www.seekingalpha.com The new IndexIQ Hedge Fund ETF (QAI) is one of the most interesting - and controversial - ETFs to launch in a while. The fund, which aims to synthetically replicate the performance of hedge fund strategies, launched Wednesday on NYSE Arca. Judging by early trading volume, the new fund is going to be a hit: QAI looks like it will trade more than 100,000 shares today (Thursday), an impressive performance for just its second day on the market. The idea of providing access to hedge fund-like returns through an ETF is hugely attractive. The best investors in the world—endowments like Harvard and Yale—hold enormous investments in hedge funds for a reason: They deliver returns with low correlations to the broader market. If QAI can make those returns available to all investors in a low-cost wrapper, it'll be big news. As I said yesterday on CNBC, however, the proof will be in the pudding: Can QAI actually deliver on its promises? It's important to understand that this ETF doesn't actually invest in hedge funds; rather, it uses factor-based analysis to determine the performance characteristics of hedge funds in general, and then builds a portfolio (using other ETFs) that it thinks will replicate that performance. Over the past few days, a lot of people have told me that this idea sounds crazy. I disagree. Too many people have a near-mythical conception of hedge funds; they think they are run by high-paid geniuses who make either spectacular or spectacularly bad investments. The truth is more mundane: While some hedge funds are run by geniuses, most are run by normal guys who use pretty standard strategies to generate a certain kind of return. They do a reasonable job, and are paid absurdly well to do it. The idea of synthetically replicating that performance at lower costs is well-established both in academia and the real world. Both Goldman Sachs (GS), and IndexIQ itself, for example, have been running synthetic hedge fund mutual funds since last summer. Generally speaking, they've done pretty well: The Goldman Sachs fund is down about 15% since July 2008, while the IndexIQ fund is down about 12%; that compares to the S&P 500, which is down about 38%. That's a good relative performance. Most hedge funds are down over that span too, in line with the synthetic products. The question now is whether these funds will be able to perform well as the market recovers. Although both funds have well-documented methodologies, they are nonetheless largely black box strategies; the concept behind the funds make sense, but you have to have faith that the quant-engine driving them is going to work. One advantage of the new ETF is that you can watch the holdings on a daily basis and see for yourself if they make sense. As of Wednesday's close, here's what QAI was holding:

LONG

INVERSE

Fund Ticker Weight Fund Ticker Weight
iShares Barclays Aggregate Bond AGG 23.89 ProShares UltraShort Russell 2000 TWM 1.93
iShares Barclays 1-3 Year Treasury Bond SHY 18.32 ProShares UltraShort MSCI EAFE EFU 1.62
iShares MSCI Emerging Markets Index EEM 11.11 ProShares UltraShort Real Estate SRS 0.46
Vanguard Total Bond Market ETF BND 8.39 ProShares UltraShort Euro EUO 0.4
PowerShares DB Currency Harvest DBV 7.94
iShares iBoxx $ High Yield Corp Bond HYG 7.29
iShares Barclays Short Treasury Bond SHV 3.92
SPDR Barclays High Yield Bond ETF JNK 3.25
Vanguard Short-Term Bond ETF BSV 3.11
SPDR Barclays 1-3 Month T-Bill ETF BIL 2.36
Vanguard Emerging Market ETF VWO 2.22
iShares Barclays TIPS Bond TIP 1.81
PowerShares DB Commodity Index DBC 1.53
SPDR Barclays Capital Aggregate LAG 0.45
If you drill down, the portfolio is fairly simple. The fund's positions include:
  • 72.79% fixed income, including 32.73% in broad-based bond indexes; 27.71% in short-term Treasuries; 10.54% in junk bonds; and 1.81% in TIPS
  • 13.33% in emerging market stocks, the only long equity position in the portfolio
  • 9.47% in commodities and currencies
  • 4.41% in various inverse funds
That's a fairly defensive portfolio. The question is, how will this portfolio perform if the market recovers? How will it adapt and change over time? It's worth watching.
NYSE:QAI March 28, 2009 11:54am

INFLATION WILL MAKE UYM A 10 BAGGER BY THE END OF 2009!

million-dollar-billThe markets could be on the brink of turning, which makes ETF-UYM my pick of the year for 2009.  The price of materials could surge by year's end as inflation kicks in to possible hyperinflation.  The more the federal government prints money, the faster I will put my money in UYM making it a 10+ bagger in the coming years!  The investment "UYM" seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Basic Materials index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is non diversified.
2009-2010 Inflation (Or Hyperinflation) In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.The term "inflation" once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation. In economics, hyperinflation is inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates. I think a lot of things will be much higher in price, including oil, next year or maybe later this year. But, don't confuse price with value. If there is any economic recovery globally and the dollar is falling, we could see any possible price you want to imagine but, it would be in dollars, and not other currencies. There are several analysts that are predicting a large drop in the dollar and that will even give the markets a boost. Using an extreme example, you could see DOW 50,000 by the end of the year if the dollar gets dumped but, while you would have seen over 40,000 more pts. you couldn't buy any more at 50,000 than now, if you sold it and probably a lot less. The price of the DOW doesn't reflect value, just price. Oil is the same. If there is a recovery globally, oil demand will rise and with all the supply being cut now, it will cause oil to go back up for all nations but, if the dollar is falling, even if they don't pay more, we will. We could pay $1,000 a barrel or $10,000 a barrel or $1 million a barrel as that is what happens when a currency collapses. For those who say that would crush our economy. Correct 100%. That too, is what happens when a currency collapses. The world basically moves on without you. If that happens to the U.S. then the world will move on but much slower than before. Because we are such large consumers there is good news and bad news in that. The countries that move on would find fewer buyers but, also less demand for copper, oil, steel, concrete, etc. and thus, they could still have profits even with fewer exports. They may not be large for years but, there are two sides to U.S. consumption. It drives up both the price of goods and the price of things to make goods with when we consume a lot. Peter Schiff goes as far as to say the world's exporters would actually be better off without us increasing demand for raw materials so much due to our consumption. However, just as it takes a depression for us to go from debtor nation to creditor nation, it will take a global recession at the minimum to go from a global economy dependent on us to one that isn't. Consumption is touted as this big "cure all," but, it isn't. Production and making things faster than debt rises, is the cure all. Spending less than you earn, saving so you can spend in down times, budgeting, and sensible investing vs. "gambling" on stock moves is the "cure." Less government, not more, less government spending, not more, fewer programs not more at the federal level is what we need. If we aren't already there then soon we will be more of a drag on the global economy than aid to it. Peter Schiff, if not right now, soon will be. Think of it this way. You make things. I buy from you but, to keep buying from you, you have to keep loaning me money from what I pay you. To make it worse, I pay you back with devalued money so that you are even losing buying power with every new loan to me. How long are you going to keep selling to me? You end up better off making something else and selling to somebody else or just making the stuff for "trade" and "sale" with people you buy your raw materials from. In the last couple of years, one oil nation, Venezuela has done just that. It "trades" some of its oil instead of selling it for things it needs from nations that don't want to "buy dollars" to buy oil with and that have materials that Venezuela needs. Iran stopped using dollars, too. It even got Japan to buy the oil it gets from Iran in Yen as well as sell in euros to other nations. In short, there are no certainties going forward except that we have to change the way we run this nation from top to bottom. Source: www.ezinearticles.com
NYSE:UYM March 27, 2009 3:36pm

TREASURY BUBBLE? NOW IS THE TIME TO BUY TBT!

bubbleHow long can an investor earn 0% on their money?  The days of moving your money to a safe haven environment can't last for ever.  Treasuries will be the next bubble to burst as investors seek to make their money work!  I am reccommeding this ETF because I believe treasuries have nothing to do but reverse course, and TBT will be a good bet.  The investment TBT seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury index. The fund normally invests at least 80% of assets to investments that, in combination, have economic characteristics that are inverse to those of the index. It also typically invests in taking positions in financial instruments, including derivatives that should have similar daily return characteristics as twice the inverse of the index. The fund is non diversified.
Ultra Short Treasury ETF: Have Patience, Money Will Eventually Flow Again 
What does one make of an investment that is down 40% in 12 weeks, yet has unquenchable investor interest? The ETF in question averaged less than 500,000 shares traded in September 08, but is currently averaging about 2,000,000 in December 08?
Say "Hello" to the ProShares Ultra-Short 20+ Treasury Fund (TBT). This exchange-traded fund seeks twice the inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury index. Since longer-term treasury bonds have gained more than 20% over the last 3 months of the credit crisis, TBT has been cremated. Even 3 months ago, pundits surmised that the 30-year U.S treasury bond yielding 4.5% was undesirable... yet the bonds rose precipitously as the yields dropped from 4.5% to 4% to 3.5% to 3% to 2.5%. Yields could drop lower... sure. And that would mean more losses for those investing in ProShares Ultra-Short 20+ Treasury Fund (TBT). However, I think the frenzied safe haven buying of treasuries has come to an end. And here's why: 1. A-grade corporate debt demand has jumped dramatically. At what is often talked about as the "October 10 lows," investors didn't just leave the stock market; they also left company debt. In fact, they left A-grade Wal-Mart and Procter&Gamble-like debt. At that time, the iShares Investment Grade Bond Fund (LQD) traded at 80. Ten weeks later, LQD is trading 20% higher. Of course, it isn't just the 20% capital appreciation in corporate debt that's impressive here. It's the fact that it is trading near the 100 price point that it historically traded at before the Lehman bankruptcy and Fannie/Freddie failure. What's more, the 5% annual yield paid monthly is going to keep pushing LQD up to the 110 level, as any yield above 4% will be seen as attractive. And that money will likely come out of treasuries. (Read more on Investment grade bond ETFs right here.) 2. Stock market volatility is declining. I honestly never expected to be declaring a CBOE Volatility Index (VIX) reading of 43 as a "good thing." It's like a summertime in Phoenix, Arizona... "It's 117 degrees and cooling down this week." In the past, any VIX spike above 30 was a sign of irrational fear. For the last 90 consecutive days, however, the VIX has traded between 30 and 89, breaking record highs and ushering in a new era of heightened "scared-to-death-ness." All that said, the VIX is well below its 50-day moving average. What's more, intra-day price swings have declined substantially each month since October. In other words, treasury overdrive may be wearing a bit thin. 3. Everything and the kitchen sink. The bear market itself may be getting long in the tooth. But stocks still have serious detractors. The possibility of a multi-year recession, as opposed to a "hoped-for" late 2009 recovery, may keep stocks in relative check. But the central banks/governments around the entire world are fighting the credit crisis with everything and the kitchen sink. Some of the efforts will take hold, encouraging a bit of risk taking activity. That means money will come out of treasuries and go somewhere... whether it's A-grade debt, foreign bonds, emerging bonds, preferred debt, convertible debt. In other words, the money does not have to flow into stocks for the ProShares Ultra-Short 20+ Treasury Fund (TBT) to thrive; it just has to leave U.S. treasuries... and I believe that it will. Source: www.seekingalpha.com
NYSE:TBT March 27, 2009 12:43pm

Housing Bottom? A turn for XHB & ITB ETF’s?

constructionNew home starts? I think we still have quite a bit of inventory to work through before home builders see any real recovery. Unfortunately foreclosures are still rising, and auctions are being held with properties being sold off to the tune of hundreds at a time. Looking through local foreclosures many of the homes on the auction block are less than 10 years old. Who needs to build right now? Perhaps there are pockets of the country that are experiencing a population shift are the key? Dallas Texas added more than 162,000 residents between 2006-2007, Atlanta 151,000, Phoenix 132,000. Seems like all warm weather areas...? These are only a few of the areas of the country people are retreating to for lower housing prices and costs of living. Perhaps their influx of people will help the new home starts as other areas will be left working through the foreclosure backlog. As always, we appreciate your input.
A Bottom for Real Estate? – HOV, URE, XHB, KBH March 27, 2009 By: Billy Fisher Contributor, Stock Traders Daily   Following what has seemed like an unending downturn for the sector, real estate received some rays of light this week. As of the market’s close on Thursday, major homebuilder names such as KB Home (NYSE: KBH) and DR Horton (NYSE: DHI) had already locked in gains of 25.9% and 30.6% this week alone. Hovnanian Enterprises (NYSE: HOV) had soared 64.4% since last Friday’s close and experienced double its average daily trading volume on Wednesday. So what initiated this week’s rally? On Wednesday the Commerce Department reported that sales of new homes in February rose for the first time in 7 months. This metric increased 4.7% to an annual rate of 337,000. Then Thursday brought an additional encouraging development for the sector when a Deutsche Bank analyst said that the stocks of homebuilder companies may be reaching a bottom. If this development proves to be the case, it would be a welcomed sequence of events for a sector that has been in a downward spiral since peaking in the summer months of 2005. The past two years have been especially trying for those stakeholders associated with the homebuilding industry. In 2007, the SPDR S&P Homebuilders ETF (NYSE: XHB) and the iShares Dow Jones U.S. Home Construction Fund (NYSE: ITB) racked up respective declines of 47.7% and 58.0%. Last year did not turn out to be all that much better. These two funds experienced declines of another 36.2% and 41.8%. Looking forward, it is inevitable that investors in this arena will be wondering whether or not this week’s rally is sustainable. Fortunately, the inventory of new homes hitting the market is much leaner than it has been during past years of this extended market downturn for homebuilders-- it is at its lowest point in nearly 7 years. Prices of newly constructed homes have been coming down for several quarters now and mortgage rates are at record lows. A tax credit that arose out of the government’s stimulus plan for buyers who purchase a home prior to December 1st also should play a contributing role in stirring up new sales in the months ahead. Homebuilders aren’t the only stocks looking to shift into a recovery mode. Even REITs participated in the broader real estate rally on Thursday. The Ultra Real Estate ProShares Fund (NYSE: URE) experienced a 5.5% move up the charts yesterday before closing at $2.69. “We invested in URE at $2.14,” said Tom Kee Jr., president and CEO of Stock Traders Daily. “We intend on holding onto it with risk controls in place.” The volatility that REITs have been subjected to in recent months will likely continue to keep Kee on his toes. He will also be monitoring homebuilder stocks for trading opportunities via trading plans he has developed specifically for KBH, DHI and HOV.  Source: stocktradersdaily.com  
NYSE:ITB March 27, 2009 10:40am

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