(INTERNATIONAL ETF NEWS)
SAUDI ARABIA. Saudi stocks surged over 3% as petrochemical and banking shares led the index to a higher close on Saturday, paring losses incurred last week after a raft of negative quarterly earnings.
The all-share index finished 3.13% higher at 5,380 points, having ended the trading week to Wednesday down almost 3%.
All sectors made gains with the leading petrochemicals sector up 4.66%, banks 3.22%, retail 1.77%, real estate development 1.64% and telecoms 2.46%.
Petrochemicals giant Saudi Basic Industries (SABIC) advanced 5.83%, having lost 11% in the previous trading week on worse-than-expected earnings.
Alinma Bank, which saw the heaviest volumes of the day, closed 2.17% higher at SAR11.7 per share.
The Tadawul index, the largest and busiest bourse in the Middle East, said this week it is considering introducing exchange-traded funds (ETF) and taking further measures to boost transparency and ensure all listed firms comply with governance rules.
Full Story: http://www.bi-me.com/main.php?id=35258&t=1&c=35&cg=4&mset=1011 Saudi Tadawul index, is considering introducing exchange-traded funds (ETF)
(INTERNATIONAL ETF NEWS)
SAUDI ARABIA. Saudi stocks surged over 3% as petrochemical and banking shares led the index to a higher close on Saturday, paring losses incurred last week after a raft of negative quarterly earnings.
The all-share index finished 3.13% higher at 5,380 points, having ended the trading week to Wednesday down almost 3%.
All sectors made gains with the leading petrochemicals sector up 4.66%, banks 3.22%, retail 1.77%, real estate development 1.64% and telecoms 2.46%.
Petrochemicals giant Saudi Basic Industries (SABIC) advanced 5.83%, having lost 11% in the previous trading week on worse-than-expected earnings.
Alinma Bank, which saw the heaviest volumes of the day, closed 2.17% higher at SAR11.7 per share.
The Tadawul index, the largest and busiest bourse in the Middle East, said this week it is considering introducing exchange-traded funds (ETF) and taking further measures to boost transparency and ensure all listed firms comply with governance rules.
Full Story: http://www.bi-me.com/main.php?id=35258&t=1&c=35&cg=4&mset=1011 This Volatility Is Off the Charts!
The Motley Fool community is weighted toward investors, as opposed to traders. As such, it has been hard for many of us to stomach the constant drumbeat of the financial media's daily mantra that "buy-and-hold is dead."
Whether they surface on CNBC, investing websites, or blogs, these diatribes generally focus on the trailing 10-year period, an admittedly tough one for stock returns. But they make it sound as if each of the past 10 years, rather than just the last 20 months, has been straight downhill for long-term investors. And they ignore the brutal past six months we long-term investors have endured, which have simultaneously provided more speculative traders with the closest thing to paradise-on-earth they've likely ever seen.
As if we were not in the midst of a stupendous singularity
In fact, our current level of volatility is unprecedented in most of our lifetimes. According to Yahoo! Finance, which lists high-low-close data for the S&P 500 index going back to March 1950, the average daily change in the value of the index over the previous 60 years has been a tad less than 0.6%. In 2006, it was 0.5%. In 2007, it was 0.7%.
In 2008, the average daily change in the value of the S&P index was 1.7%.
This is a huge variation: 300% of normal volatility, on average, day in and day out, for a year! Given the staggering trading volume of highly liquid (and relatively new) exchange-traded funds, this may not come as a surprise. After all, Proshares QQQ Trust (Nasdaq: QQQQ), SPDRs (NYSE: SPY), and the iShares Russell 2000 (NYSE: IWM) do more than 70 million shares per day in trading volume
Full Story: http://www.fool.com/investing/general/2009/04/24/this-volatility-is-off-the-charts.aspx Sticking to ETFs? Take this refresher course
I am sure followers of this column also follow Don Vialoux's Tech Talk, which is a brisk and refreshing daily commentary on the capital markets.
On Wednesday, Don quoted a recent study by Standard & Poor's titled "Indexes beat most managers." Apparently, over the past five years, 70 per cent of U.S. large-cap fund managers who use the S&P 500 as a benchmark for comparisons have failed to match the performance of the index over that time.
Vialoux recommends sticking to exchange-traded funds.
Aside from the higher fees, the major difference between a managed (or active) mutual fund and an exchange-traded fund is an active manager directing the mutual fund's holdings.
An exchange-traded fund (ETF) is basically a buy-and-hold basket of stocks.
The manager of a mutual fund is paid to outperform his or her "peer" group, which can be other related mutual funds or a relevant index such as technology, energy, large-cap value or small-cap growth.
For example, the manager of a U.S. large-cap value fund should strive to outperform the S&P 500 or the related ETF such as the NYSE-listed SPDR S&P 500 exchange-traded fund (SPY).
The active fund manager has the disadvantage of higher costs because of his or her fee piled on top of trading and marketing costs. The active fund manager must overcome this by adding value in the form of risk management.
Risk management implies the active manager can weed out overpriced stocks in the portfolio and replace them with overlooked "cheaper" stocks. The buy-and-hold index and the ETF peers ignore the changing valuations within the holdings.
Full Story: http://www.thestar.com/Business/article/624252 5 Reasons Why ETFs Are Superior to Stock Picking
Should exchange traded funds (ETFs) be avoided? While we know the benefits of ETFs, sometimes people need a little convincing about their merits when it comes to these funds vs. active management.
According to Wayne Pinsent for Investopedia, index investing is not the way to reach personal investing goals. He makes the case that buying an index and letting it ride is all well and good, but that stocks aren’t always rational. We’ll list his points first, then counter with our own:
1. Pinsent Says: Downside protection. ETFs will go up when the markets are up, but an investor may be caught in the downward spiral when the markets are down.
ETF Trends Says: If you have an exit strategy and use it faithfully, you won’t be vulnerable on the downside. There are also long/shorts that allow you to hedge your current positions, if you’d like to.
2. Pinsent Says: Reactive ability. At times, one company may do well and pull everyone one up, which could create a sector that is overvalued, and vice versa. Investors can gauge companies individually if they are undervalued or overvalued.
ETF Trends Says: ETFs offer so many different strategies to help investors minimize this risk. There’s value-weighting, but there’s also equal weight, revenue weight and more. And again, if one company sinks the whole ship, bring out the exit strategy. Also, there’s not a limited number of indexes out there. Another upside to ETFs is that they help spread around the risk a little.
Full Story: http://www.nasdaq.com/newscontent/20090424/5-reasons-why-etfs-are-superior-to-stock-picking.aspx?storyid=8927 Earnings, banks lift Wall St; Nasdaq up for 7th week
The KBW Bank index (.BKX) rose 2.9 percent while the Select Sector SPDR Financial ETF (XLF.P) gained 2.6 percent.
NEW YORK (Reuters) – Stocks rallied on Friday as earnings showed companies have weathered the recession and economic data raised hopes the economic cycle may have hit a bottom.
Investors were also undeterred by a government release of a much anticipated concept paper on stress tests for the 19 biggest U.S. financial services companies.
American Express (AXP.N) gave the most fuel to the Dow's rise, shooting up nearly 21 percent to $25.30 a day after reporting results that topped analysts' expectations, helped by aggressive cost cutting.
Ford Motor Co (F.N) also posted a smaller-than-expected first-quarter loss and said it was on track to at least break even in 2011 and did not expect to seek U.S. government loans, sending its shares up 11.4 percent to $5.
Economic data also fed the buying frenzy after durable goods orders slipped in March, but fell far less than Wall Street expected. Sales of new single-family homes dropped, but inventories plummeted at a record pace.
Full Story: http://news.yahoo.com/s/nm/20090424/bs_nm/us_markets_stocks_71 Health Care ETFs Drop on Profit Concerns
Earnings season looks more like flu season as sneezing health care stocks sickened the performance of exchange-traded funds.
During the five trading days that ended Thursday, the 79 health care ETFs we track lost 2.9%, on average. The only exception was the ProShares UltraShort Health Care Fund (RXD), which sells the sector short to generate an inverse performance. The S&P 500 Index was little-changed during the week.
The worst-performing health care fund was the Rydex 2X S&P Select Sector Health Care ETF (RHM), which dropped 6.8%. The fund's two largest holdings Johnson & Johnson (JNJ) and Pfizer (PFE) slipped 1.5% and 4.5%, respectively.........
............The ProShares Ultra Health Care Fund(RXL) and the ProFunds Health Care UltraSector ProFund (HCPIX) had the second- and third-biggest declines of the group. Both portfolios aim to track the daily performance of the Dow Jones U.S. Health Care Index with 200% and 150% leverage, respectively.
Full Story: http://www.thestreet.com/story/10491714/1/health-care-etfs-drop-on-profit-concerns.html?cm_ven=GOOGLEFI Emerging-Market Short Sales Climb Most Since 2007
Short sellers are increasing bets against developing-nation stocks by the most since March 2007, a signal the biggest rally in 16 years may fizzle as profits plunge from Brazil to Taiwan.
Short interest in the iShares MSCI Emerging Markets Index fund, which tracks equities in 23 developing nations, climbed 51 percent in March, the biggest jump in two years, according to New York Stock Exchange data compiled by Bloomberg. Wagers against Rio de Janeiro-based oil company Petroleo Brasileiro SA’s U.S.-traded shares were the highest since August 2005. Those against display maker AU Optronics Corp. of Hsinchu, Taiwan surged to an eight-month high, the data show.
The growth in short sales, where investors borrow stock and sell it on the expectation prices will fall, marks a shift from the last three rebounds in emerging-market stocks. In those cases traders closed out their bets. The MSCI gauge, up 35 percent from its 2009 low on March 2, may drop 10 percent in coming weeks as falling earnings damp investor optimism, ING Investment Management SA’s Eric Conrads said.
“We aren’t out of the woods,” said Conrads, a Mexico City-based hedge fund manager at ING, which oversees $12 billion in emerging-market assets. Conrads started betting against developing-nation equities this month, convinced the stocks are in a “bear-market rally,” he said.
Full Story: http://www.bloomberg.com/apps/news?pid=20601080&sid=aOfDmOcqfFfY&refer=asia ETF Plans To Ease Credit Crunch Take Shape
With trillions of dollars in U.S. government funding already committed to combating the worst recession since the Great Depression, regulators are increasingly enlisting private sector support.
Along those lines, lawmakers and Treasury officials are reportedly listening to—and in some cases soliciting—outside views from key leaders in the financial sector.
Asset managers focusing on exchange-traded funds are being included in this movement to broaden the scope of U.S. economic recovery plans. As detailed in an IndexUniverse.com analysis of key developments in the effort to thaw credit markets, large ETF sponsors as well as small-yet-influential players are involved.
(The full 21-page Special Report, three months in the making, can be viewed here.)
Two ETF Plans Emerge
At the heart of the issue is resolving so-called "toxic" debt related to mortgage-backed securities. That alone is estimated to represent more than $1 trillion of regulators' efforts. MBS markets are made upon debt obligations that "represent claims to the cash flows from pools of mortgage loans, most commonly on residential property," according to the Securities and Exchange Commission.
The Treasury's plan to breathe new liquidity into this market is called the Public-Private Partnership Investment Program, or PPPIP. While the Treasury was developing the PPPIP program, which was unveiled in March, ETF companies began working on an alternative.
Over the past two months, two plans have emerged: One from Invesco PowerShares and the other from Murray Stahl (CEO of Horizon Asset Management) and Robert Holderith (CEO of Emerging Global Advisors).
Full Story: http://www.indexuniverse.com/sections/in-the-spotlight/5765-etf-plans-to-ease-credit-crunch-take-shape.html ETF-Based, Sherwood Forest Long/Short Fund (SFCMX) Launched By Sherwood Forest Capital Management
Effective February 11, 2009, Unique ETF Fund, With About $10 Million AUM, Evolves From Adviser's Composite With Returns Of 32.03% in 2008, And 41.09% Since Inception 04/01/2007.
CHARLOTTESVILLE, Va., April 24 /PRNewswire/ -- Sherwood Forest Capital Management announced today that effective February 11, 2009, it has launched no-load, Sherwood Forest Long/Short Fund (SFCMX), investing in exchange-traded funds ("ETFs"), both U.S. and overseas.
In making the announcement, Douglas Stewart, Portfolio Manager, said, "This unique ETF fund commences with some $10 million in assets, which we managed previously as separate accounts for our Firm's clients." The previous composite returns (net of fees) were +32.03% for the year ending 12/31/08; and, +41.09% since inception in 04/01/07.
"Now, with this new mutual fund structure," Mr. Stewart said, "We have made our 'proprietary methodologies' for investing in ETFs more widely available to investors."
Full Story: http://au.sys-con.com/node/934682 VERSACE: ETFs A Unique Investment Plan
The financial and investing worlds both suffer from a number of similar problems including the one that drives the non-professional investor nutty, I suspect. I'm not talking about intricate trading strategies and complex instruments but rather all the acronyms.
There's "PE" (price to earnings), "EBITDA" (earnings before interest, tax, depreciation and amortization), "DCF" (discounted cash flow), "WIP" (work in process) and a host of others, including "ETF" or exchange-traded fund. It is that last one, ETF, that has grown tremendously in not only product offering but in acceptance over the last several years and it appears that trend will continue.
While ETFs have been available in the U.S. since 1993 and in Europe since 1999, in May 2008 there were 680 ETFs in the U.S. with $610 billion in assets, an increase of $125 billion over the previous year per the Investment Company Institute. In the same month, a survey conducted by State Street Research and Wharton underscored how ETFs are changing the investment industry. Per the study, 67 percent of surveyed investment professionals called ETFs the most innovative investment vehicle of the last two decades, and 60 percent of these investment professionals shared that ETFs have fundamentally changed the way they construct investment portfolios. Needless to say, ETFs are worth paying attention to.
Full Story: http://washingtontimes.com/news/2009/apr/24/etfs-a-unique-investment-plan/ China buying boosts gold to 3-week high
You may note our story on April 16th where we showed the largest holders of gold in the world, and SPDR Gold Trust (GLD). At that time GLD was the sixth largest holder of gold in the world trumping Switzerland, Japan, The Netherlands, and China in that order. This is a huge swing by China to increase their overall gold holding from the 10th to 5th position worldwide. http://etfdailynews.com/blog/?p=1153
LONDON, April 24 (Reuters) - Gold surged to a three-week high on Friday, boosted by the prospect of further purchases by China, after the country revealed it had been buying the precious metal since 2003. Spot gold was bid at $908.10 an ounce at 1325 GMT from $902 late in New York on Thursday. Earlier on Friday it hit $912.80, a rise of more than 5 percent this week and the highest since April 2. China has raised its gold reserves by three-quarters since 2003 to 1,054 tonnes, confirming speculation that it had been buying in the market for some years. "The massive accumulation of foreign exchange reserves meant gold as a proportion of total reserves had fallen below 1 percent compared with a norm of about 2 percent," said Michael Lewis, head of commodities research at Deutsche Bank ( DB - news - people ). "It could be a short term supportive story because they want to get back to where they were with quite a substantial amount of purchasing for their reserves." China's reserves are now the fifth biggest in the world, with only six countries holding more than 1,000 tonnes. Full Story: http://www.forbes.com/feeds/reuters/2009/04/24/2009-04-24T135154Z_01_LO625427_RTRIDST_0_MARKETS-PRECIOUS-UPDATE-5.html
Homebuilder ETFs Run On Housing Data (XHB, ITB)
The new home sales data is showing a very mixed bag, with a bit of a positive twist to it. We are seeing a run up in the SPDR S&P Homebuilders (NYSE: XHB) and the iShares Dow Jones US Home Construction (NYSE: ITB) as a result. March-2009 new home sales came in at a rate of -0.6% down to 356,000 on an annualized basis. We had consensus estimates pegged at 337,00 from Dow Jones and 330,000 from Bloomberg. February was given a sharp revision to its already high +4.7% to a higher +8.2%.
Full Story: http://247wallst.com/2009/04/24/homebuilder-etfs-run-on-housing-data-xhb-itb/ Twelve ETF charts with dividends in excess of 5%
Bigger is better. We see it on all the commercials, bigger burgers, bigger muscles and now The Correct Call brings you bigger dividends. In this week’s ETF screener, we found a dozen ETF charts with dividends in excess of 5% displaying technical analysis buy signals. Ten of the 12 buy candidates are paying stock holders more than 7%. Those are some fat or is it phat? dividends.
ETFs with 5% plus dividends:
- Claymore/Zacks Country Rotation CRO: 5.21%
- Claymore/Sabrient Stealth STH: 5.39%
- WisdomTree Dividend Top 100 DTN: 7.01%
- WisdomTree SmallCap Dividend DES: 7.65% This one really intrigues us as we saw numerous buy signals on small cap ETF charts, especially value. If we had to pick just 1 of the 12 to invest in, this is it.
- First Trust Morningstar Dividend Leaders Index (FDL) 7.70%
- CRO 5.21%
- STH 5.39%
- DTN 7.01%
- DES 7.65%
- FDL 7.70%
- DEB 8.35%
- DHS 8.62%
- PEY 9.17%
- DEW 10.13%
- CGW 10.29%
- REZ 11.82%
- PGX 13.54%
5 things you can do now to prepare for rising inflation (GLD, GSG, DBC)
We all have our little fears: The frayed wire on the coffee maker. That knocking noise from the left-rear tire. The zombies staggering around in the backyard.
For investors, one of the biggest fears today is inflation — a period of rising prices. Inflation erodes the buying power of your money at home and abroad. In a worst-case scenario, it can result in hyperinflation, when a wheelbarrow of bills won't buy a loaf of bread.Right now, inflation is deader than an army of zombies. But massive government borrowing raises the fear that inflation will rise from the grave and eat your savings. But you can fight back — with five inflation-fighting investments......
......Gold: No matter what, it's worth something
Paper money may lose its value, but gold is always worth something. The problem: The price of gold isn't tied terribly tightly to inflation.
For example, the price of gold has barely budged since its 1981 high of $850 an ounce. On the other hand, gold has doubled the past five years, a period of tame inflation. "Gold has been a terrible proxy for inflation since 1981," says Ray Ferrara, a financial planner in Clearwater, Fla.
One reason: Gold prices move opposite the value of the U.S. dollar, rather than tracking inflation. But if inflation does roar, the value of the dollar will fall, too. After all, if a dollar buys less at home, it will be worth less abroad.
Tips:
•Buy gold bullion coins, such as the American Eagle or Canadian Maple Leaf. Take possession of the coins. Scammers love to pretend to store them for you.
•Consider a gold bullion exchange traded fund, such as the SPDR Gold Shares ETF (GLD). Each share equals one-tenth of an ounce of gold, minus the fund's expenses.
Commodities funds: Prices of materials rise with other prices
Inflation is, by definition, a period of rising prices — not just for gold, but for virtually all basic materials, such as steel, coal, oil and lead.
Clearly, buying a boxcar full of coal has its drawbacks. And small investors who invest in commodities via the futures markets lose early and often.
But you can invest in commodities via exchange traded funds. These funds typically track a commodity futures index, such as the Goldman Sachs Excess Return index, which tracks 24 commodities.
Be aware that many commodity funds have big weightings in energy — which is fine, if that's what you want. TheiShares S&P GSCI Commodity fund (GSG), for example, is 67% invested in energy.
Tips:
•The PowerShares DB Commodity index fund (DBC) is a highly diversified commodity fund.
•Consider an actively managed natural resources fund. Two funds that have consistently beaten their peers are Vanguard Energy (VGENX) and ICON Energy (ICENX).
Full Story: http://www.usatoday.com/money/perfi/columnist/waggon/2009-04-23-inflation-hedges_N.htm
We’re In a Recession, So Why Hasn’t the Retail ETF Gotten the Memo?
U.S. retailers and the exchange traded funds (ETFs) that track the sector have seen a nice rally for 2009. But the question is: can it continue?
No one can predict the future, but we can certainly look at what’s happening now. While SPDR S&P Retail (XRT) is down in early trading today, the recent trend has been up. Over the past few days, the sector has been moving in tandem with the overall market, dropping a few points on Monday and then gaining it back the next day. The reason behind the sector’s volatility is the diversity of companies that it tracks.
The driving force behind the sector’s decline is its allocation to department stores. Last week, Standard & Poor’s lowered the department store group’s credit ranking on concerns that the global recession will hit department stores even harder than previously anticipated. This news took its toll on big retailers such as Macy’s (M), Nordstrom (JWN) and J.C. Penney (JCP), sending shares down 9.5%, 7% and 5.6% respectively, states Andria Cheng of The Wall Street Journal.
Full Story: http://www.etftrends.com/2009/04/were-in-a-recession-so-why-hasnt-retail-etf-gotten-memo.html 
