All ETF Daily News Articles

Why ETFs Will Trounce Single-Stock Picking

exchange-traded-fundsWhile the exchange traded fund (ETF) market has shown considerable growth, some money managers are picking individual stocks once again. Is this the way things are going to be now? Geoffrey Rogow for The Wall Street Journal reports that ETFs accounted for 40% of the total U.S. equities market in late October, and now the volume is around 35%. Is this the sign that single stock risk tolerance is back? Institutional investors may be ready to rely less on ETFs and more upon single stocks as hedges, and excess cash is no longer an issue. While the diversification benefits are many, there are ways to access the best companies without holding the not-so-great performers either. Full Story:
ETF BASIC NEWS April 21, 2009 11:49am

Falling Behind: The Price Of Not Using Leverage

leverageIf you're not using a leveraged or inverse fund these days, your chances of owning a top-performing ETF is greatly reduced. On the other hand, if you do own a leveraged or inverse ETF, that doesn't guarantee a winning hand. In fact, it might ensure just the opposite. With leverage, if your ETFs haven't made any of the "best" lists lately, chances are you're going to wind up a big-time loser. In the world of highly charged ETFs that provide 200% or even 300% leverage of their underlying indexes, few performance numbers fall in between the cracks. It's an all-or-nothing game. For example, if you'd bought the Rydex Inverse 2x S&P 500 ETF (NYSE: RSW) one year ago today, you would've gained more than 40% by now. If you'd bought the ProShares Ultra S&P 500 ETF (NYSE: SSO) in that same period, you would've lost 60%-plus. The only real pattern showing up since the onslaught of leveraged and inverse ETFs on the market is that leaders will more likely than not come from one of those two categories. Whether it's one or the other is dependent, of course, on the particular cycle at the time. So how can you hope to own a real ETF winner without juicing up your portfolio these days? It's easier than you think. And best of all, you really don't need 2x or 3x ability to be a top performer. In fact, it's probably counterproductive for most long-term investors to own a leveraged ETF. Full Story:
NYSE:RSW April 21, 2009 11:06am

Try Putting Your Bad Trades On The Couch

couchETF providers entice investors to new offerings with gain-enhancing features like "risk exposure," "retirement solutions" and "investment strategies." The list goes on. But regardless of what you buy or what happens in the market, the outcome ultimately depends on what's happening in your brain, says Janice Dorn, a financial psychiatrist and gold futures trader. Dorn has mentored or coached more than 600 investors/traders. She counsels that you must master yourself in order to master ETFs. IBD: What proportion of your clients specialized in trading ETFs? And what were their most common problems? Dorn: At least 40% of the traders I have mentored or coached trade ETFs and, of these, approximately 30% specialize or want to specialize in ETFs. The chief complaint of most traders is that they are unable to make or keep enough money. They are failing, depressed, anxious and stressed. Their challenges manifest in several ways including: inability to take a trade, not cutting losses, taking profits too quickly, not adhering to stops, having no real concept of risk or risk management, and overtrading. Full Story:
ETF BASIC NEWS April 21, 2009 11:00am

Platinum Falls as Carmaker Demand May Weaken; Palladium Steady

platinum3April 21 (Bloomberg) -- Platinum fell to a two-week low in New York on speculation that automakers, the biggest users of the metal, may buy less as car sales decline. Palladium was little changed. U.K. auto sales show no sign of a recovery, the country’s main industry group said. Registrations fell 31 percent last month and “it’s not looking any better in April,” Paul Everitt, head of the Society of Motor Manufacturers & Traders, said in an interview. U.S. auto sales tumbled 37 percent in March. Most platinum and palladium is used in car parts. “The fundamentals still remain weak overall from the auto sector,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e- mailed note. Platinum futures for July delivery fell $11.10, or 1 percent, to $1,156 an ounce at 10:20 a.m. on the New York Mercantile Exchange. Earlier, the price touched $1,153, the lowest for a most-active contract since April 7. Before today, the platinum dropped 44 percent in the past 12 months.   Full Story:
ETF BASIC NEWS April 21, 2009 10:50am

Gryphon Financial Introduces The ETF Express Bulletin as Part of Investment Newsletter

etf-news7New York, NY (PRWEB) April 21, 2009 -- Gryphon Financial introduces Exchange Traded Funds, or ETFs, to their subscribers via The ETF Express Bulletin investment newsletter. ETFs, a collection of securities that track specific market indexes and cost very little, are the fastest growing investment tool in the United States today! "Mutual funds are so yesterday," says Michael Warren, trader and founder of "Prominent investors believe ETFs are the new way to go." "ETFs cover such a broad spectrum. One bad apple doesn't spoil the whole bunch. When you trade a basket filled with stocks, wouldn't it be better using a longer time frame opposed to a shorter one?" asks John Gage, trader and investment guru for Gryphon Financial. "Short-term time history will show you how much smoother the price movement is with a lot less noise," Gage explains. Owning a basket of securities is more comfortable and beneficial than owning just a few individual stocks. Usually ETFs can be purchased with stops and limit orders and are available for margin buying. Want to avoid trading catastrophes? ETFs are automatic diversified equities that minimize risk! "Investors are similar to carpenters; they need the right tools to get the job done. I myself have over a dozen different techniques that I have carefully tested under different market conditions," says Warren, whose stock tips have earned Gryphon Financial subscribers great returns on their investments. Obviously, ETFs have to come at some cost, but in comparison to similar products, ETFs cost less. Cheaper to manage since, unlike mutual funds, they don't not have back-end expenses, ETFs enable investors to trade specific sectors, while paying one commission for an entire group of stocks within one industry. Full Story:
ETF BASIC NEWS April 21, 2009 10:44am

Deals Offer Bright Spots But Financials Tank

down-arrow2 ETF DAILY NEWS TAKE:  Stocks gave up big gains a day after ETF Daily News posted The Bear ETF’S Are Getting Ready For “Sell In May And Go Away”!  The big winners today were the bears, but will the blood in the street continue to put the bulls away for the summer?
After six strong weeks, stocks had a very difficult day. As we've said previously, a decent-sized pullback after such a big run-up seemed likely. How the market responds the next few days will be important in setting the near-term trend as we hit the busiest part of earnings season. There will be a lot of company data and projections to chew on over the next two weeks, but that will just be an appetizer to what the government has to say about its bank stress test on May 4th. Stocks plunged to start the week. The Dow fell -290 points to 7,842, while the S&P dropped -37 points to 832. The Nasdaq, meanwhile, lost -65 points to 1,608. Oil nosedived -$4.45 to $45.88 a barrel, while gold climbed $19.60 to $887.50 an ounce. The Leveraged ETFs was the top performing tickerspy Index on the day, led by Direxion Shares Etf Trust Financial Bear 3x (NYSE: FAZ - News) with a 31% gain. Full Story:
NYSE:FAZ April 20, 2009 4:29pm

Schwab To Enter ETF Arena

chuckOne of the world’s biggest financial services firms has decided to throw its hat into the ETF marketplace. On Jan. 30, Charles Schwab & Co. (NASDAQ: SCHW) filed with the Securities and Exchange Commission for exemptive relief that would allow it to create ETFs. The fund described in the filing would track the Dow Jones U.S. Total Stock Market Index, which according to the filing, covers all publicly traded U.S. stocks with readily available pricing information. The Schwab filing makes reference to other possible index-tracking ETFs, but only specifically names the one fund. Full Story:
ETF BASIC NEWS April 20, 2009 1:52pm

ETFs with Surge in Traded Value

waveHere is a list of the top-10 ETFs that experienced the largest percentage increase in value traded for the week ending April 17, 2009. To create the list, I first screened for ETFs and ETNs that had an Average Daily Value Traded (ADVT) of at least $1 million for the past 21 market days.  This includes only those products in the upper ETF Liquidity Tiers and represents approximately 45% of the universe of US-listed ETFs and ETNs.  This step eliminates many of the peculiarities associated with low volume securities. Next, I compared the ADVT of the past week to the 50-day average to determine which ones had the largest spike in the past week - an indication of potential increased interest from investors and traders. Full Story:
ETF BASIC NEWS April 20, 2009 12:29pm

London Stock Exchange Tops 200 ETFS

bigbenThe London Stock Exchange today admitted seven new iShares ETFs, taking the total number of ETFs on the Exchange to 200. First launched in 2000, the ETF market in London has continued its strong expansion in spite of difficult recent market conditions, with 18 new admissions and £12.2 billion worth of trading so far this year.


Pietro Poletto, Head of ETF and ETC Markets at London Stock Exchange Group, said:


“It is testament to the attractiveness of the ETF model that at time when equity markets are perceived as being quiet, the ETF market has continued to expand, with very strong trading activity, and regular new product issuance.”


The issuers on the Exchange’s ETF market are: Deutsche Bank, ETF Securities, Invesco Powershares, iShares and Lyxor. Between them, they issue 78 ETFs based on developed market equity indices; 21 fixed income based ETFs; 41 ETFs tracking emerging markets indices; 53 ETFs covering a broad range of industrial sectors or specific asset classes such as property, private equity or commodities, and seven ‘style’ ETFs that focus on specific investment approaches such as small caps or companies with a record of strong dividend payments. In addition, there are now 123 Exchange Traded Commodities and one Exchange Traded Note


Full Story:

ETF BASIC NEWS April 20, 2009 12:27pm

The Global Consumer Will Rise Again

car1Each day we hear about how consumers world-wide are tightening their belts and spending less. Even the rich have pulled back, not a surprise considering, according to the Economist, high-net-worth individuals have lost a quarter of their wealth. Consumer confidence, which we charted a few weeks back has improved but is still historically bleak. Yet, provided that government doesn’t completely kill capitalism outright, this pullback in shopping won’t always be the case. For contrarian investors looking for a diversified way of playing the global consumer, a lesser-known ETF has collected many of the top names into one simple play. SPDR S&P International Consumer Discretionary Sector ETF (IPD: 18.37, -0.78, -4.07%) holds, as you might imagine, brand-name companies whose products you probably come into contact with every day. Approximately 20% of the fund is held in automotive stocks, and even though General Motors (GM: 1.69*, -0.17, -9.13%) and Chrysler might be going away, the car business certainly isn’t. Honda (HMC: 28.00*, -0.50, -1.75%) (4.15%) and Toyota (TM: 75.76*, -1.38, -1.78%) (10.03%) are large holdings, along with Germany’s Volkswagen Ag (VLKAY) (3.14%) and Daimler Ag (DAI: 31.74*, -2.92, -8.42%) (3.01%). These are companies likely to gain even more market share as U.S. manufacturers shrink. You might recall from an earlier column that even the president’s own Auto Task Force drives mostly foreign cars. Full Story:
ETF BASIC NEWS April 20, 2009 12:13pm

Big Spill in USO Options

stocks_plungeThe US Oil Fund (USO) is down more than 7%  today to trade at $27.37. The drop mirrors the fall in the commodity itself, but while the actual futures remain within the recent range, the USO exchange traded fund is now down to its lowest levels since March 16. The futures are 45% off the February low, while the USO is only 20% higher than its low. Full Story:
NYSE:USO April 20, 2009 11:37am

How Managing Risk With ETFs Can Backfire

backfireAlcohol ads urge us to "drink responsibly." Cigarette packs are emblazoned with the surgeon general's warnings about cancer. And the firms that sell leveraged exchange-traded funds keep begging individual investors not to buy the things because they are meant only for short-term trading and can have erratic long-term returns. Nonetheless, roughly 13,000 people are killed in alcohol-related crashes each year, over 33 million Americans smoke at least once a day -- and more than $2 billion has poured into leveraged ETFs so far this year, much of it from financial advisers and retail investors who hang on too long. ETFs are funds that trade during the day like stocks. A leveraged ETF seeks to use futures and other derivatives to multiply the daily return of a market index. Some, called "ultra," "2X" or "3X bull," attempt to double or triple the market's return each day. Others try to double or triple the opposite of an index's return; on a day when the market goes down, these "ultra-short," "inverse 2X" or "3X bear" funds should go up two or three times as much. So why bother with a boring index fund when you could double or triple your money by using a leveraged ETF? And why helplessly watch your stocks wither away when an inverse leveraged fund could let you mint money in a falling market? There are 106 such funds with $46 billion in assets, much of it "hot money" that flies right back out. On Wednesday, trading volume for Direxion Financial Bear 3X totaled 23.1 million shares on only two million shares outstanding -- implying an average holding period of less than 34 minutes. Full Story:
ETF BASIC NEWS April 20, 2009 10:30am

Ten Reasons Commercial Real Estate Won’t Rebound

commercial-reGiven that I’ve already spelled out my thinking on the sector, I’ll use a “bullets” format here, pulling in ideas from recent reports by Goldman Sachs (GS) and Stifel Nicolaus, as well as information from a very well-placed broker in the Washington area: 1. In prime office markets, closings for trophy properties are being done at 7.5-8.5 cap rates; anything other than “trophy” quality is above 9.0 caps. Against a backdrop of halcyon-era deals, which happened at nominal 3-4 caps (in reality cap rates were at zero since under normalized financing terms there would have been no cash flows), and leveraged 75% plus, this means that many properties have now lost approximately 50% of their value. To wit, Normandy’s $660 million foreclosure of Brodway’s Hancock Tower in Boston took place at 50% of the original price, but only because Normandy chose to assume the very favorable loan on the property. In a regular auction sale, the property might have pulled in less than $500 million (Stifel Nicolaus). 2. “CRE fundamentals will continue to worsen for the next 12-18 months; cap rates will rise another 3 to 5 points, to the low teens; secured financing costs will rise to the 8-10% range; unsecured financing will command double digit rates." (Goldman Sachs). I agree completely, and it matches the assumptions surrounding many troubled projects we're familiar with........ ........10. At the risk of being redundantly redundant, the ProShares Ultrashort Real Estate (SRS) remain an excellent trading vehicle to short CRE, and just as bad an investment tool to achieve that purpose. I continue to trade the former, but I've now started a short position in the IYR, looking for it to bleed slowly for an extended period of time. Full Story:
NYSE:SRS April 20, 2009 10:08am

Financial-sector rally fizzles

stocks-plungeBOSTON (MarketWatch) -- U.S. financial stocks opened lower Monday after Bank of America Corp. said it earned more than $4 billion in the first quarter but warned credit markets continue to deteriorate on a stagnant economy and rising unemployment.
Bank of America (BAC 9.05, -1.55, -14.6%) shares were off more than 10% following its first-quarter earnings announcement, but the stock is up more than 40% so far this month as a result of the dramatic snapback rally in bank shares.
The bank is still facing "extremely difficult challenges primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment," said Chief Executive Ken Lewis. See full earnings coverage.
The Financial Select Sector SPDR Fund (XLF 10.52, -0.59, -5.3%) , a sector exchange-traded fund, was down about 5% in early trading Monday. The ETF had risen the previous three sessions, but the financial sector suffered across-the-board losses to start the week.
Full Story:
NYSE:XLF April 20, 2009 9:53am

ETF Breakdown: Understanding the Three Categories

etf-news7The exchange-traded fund (ETF) boom has been one of the fantastic bull-market trends of all time. Unfortunately, it's been one of those trends that we as investors haven’t yet been able to cash in on, but have been able to directly participate in by learning the business and understanding the players. I started using ETFs years ago and have slowly evolved to a separate managed account (SMA) model that utilizes them exclusively. But interestingly enough, you wouldn’t believe the number of people with whom I discuss my SMA strategy who have never heard of an ETF. If you happen to be one of the few who don’t yet understand just what an ETF is, in simple terms, it's a tracking stock that owns a basket of underlying securities. It allows you to diversify your holdings in the same manner as a mutual fund, but without the restrictions of buying and selling at 4 p.m., as ETFs trade when the market is open. I believe one of the greatest strengths you can have as a trader is to know all the major ETFs intimately. When you see a sector or market moving, it's helpful to know exactly how to play it via ETFs, rather than searching this out when it's time. Being prepared is always worth more than you can ever imagine. Observing this growing industry has been fascinating, and like old media versus new, I suspect it will still be several years before the dying, mutual-fund world, understands the competition that ended up cleaning its clock. Yet with this incredible market and unbelievable opportunity, I'm still not sure if all the players in the game understand their very own business and roadmap to success. Full Story:
ETF BASIC NEWS April 20, 2009 9:29am

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