All ETF Daily News Articles

Health care sector ETFs offer a port in the storm

healthcare...Traditionally, health care has been viewed as a defensive sector, meaning that health care sector stocks have held up better than the overall stock market during major bear markets. The current bear market is no exception. Regardless of what the market is doing, people tend to maintain their health care spending, and profits in the sector hold. Because senior citizens account for a disproportionate share of health care expenses, Medicare guarantees a flow of revenue to the health care industry. There are literally dozens of health care ETFs, and not all are created equal. The first group to be aware of is the broad U.S. health care sector ETFs: Health Care Sector SPDR (XLV) from State Street Global Advisors of Boston, iShares Dow Jones U.S. Healthcare Sector Index ETF (IYH) from Barclays Global Fund Advisors in San Francisco, a subsidiary of Barclays Global Investors of Jersey City, N.J., and the Vanguard Health Care ETF (VHT) from The Vanguard Group Inc. of Malvern, Pa. The investment performance of these ETFs has been similar over the past three and five years, with the Health Care Sector SPDR just a bit weaker than the others. On the other hand, the Health Care SPDR is the most heavily traded of the three broad health care ETFs, so if you are looking to move more than 1,000 shares at a time, there is a potential advantage to using the Health Care Sector SPDR, especially if you are an active trader. All three of these broad sector ETFs have the same principal holdings: large pharmaceutical and equipment companies such as Johnson and Johnson, Pfizer Inc., Abbott Laboratories, Merck & Co. Inc. and Amgen Inc. However, the Vanguard Health Care ETF does not hold the same portfolio as the well-regarded Vanguard Health Care Fund (VGHCX) which, unlike the ETF, has a minimum holding period of one year. Full Story:
ETF BASIC NEWS April 16, 2009 9:47am

Four New Direxion ETFs List on NYSE Arca

etf-news7NEW YORK--(BUSINESS WIRE)--Direxion Funds, a pioneer in providing alternative investment strategies to sophisticated investors, today began trading four new ETFs designed to track the recently debuted NYSE Current U.S. Treasury Indexes. The four new Direxion ETFs are:

Fund Name



Direxion Daily 10-Year Treasury Bull 3X Shares   TYD
Direxion Daily 10-Year Treasury Bear 3X Shares   TYO
Direxion Daily 30-Year Treasury Bull 3X Shares   TMF
Direxion Daily 30-Year Treasury Bear 3X Shares   TMV
On April 2, NYSE Euronext launched the NYSE Current 2 Year U.S. Treasury Index (AXTWO); the NYSE Current 5 Year U.S. Treasury Index (AXFIV); the NYSE Current 10 Year U.S. Treasury Index (AXTEN) and the NYSE Current 30 Year U.S. Treasury Index (AXTHR). With a collective portfolio of over 300 benchmark indices, NYSE Euronext’s Global Index Group provides design, real-time calculation and dissemination services for NYSE Euronext, third-party customized indices and Exchange Traded Products intra-day indicative values. NYSE Current U.S. Treasury Indexes: The four NYSE Current U.S. Treasury Indexes (AXTWO, AXFIV, AXTEN, AXTHR) are one-security fixed income indexes that consist of the most recently issued respective 2-year, 5-year, 10-year, and 30-year U.S. Treasury notes. The indexes intend to track the performance of current on-the-run U.S. government bonds. The indexes are rebalanced monthly effective after the close of trading of the last business day of the month. At that time, each index’s bond along with any relevant accrued interest and coupon payments received will be rolled into a new U.S. Treasury security if one was more recently issued during the month. The indexes are published each day that the U.S. bond markets are open for trading from approximately 8:30 AM to 4:30 PM EST. The divisor for each index was determined to yield a benchmark value of 1000.00 at the close of trading on February 27, 2009 Full Story:
ETF BASIC NEWS April 16, 2009 9:29am

Betting On The Buck

dollarEven though George Soros is down on the dollar it remains the world's reserve currency. How to play the greenback.

Though the dollar has strengthened over the past six months against arch rival the euro, George Soros isn't backing the buck. Soros, one of the world's foremost currency traders, stated that the dollar remains vulnerable and could be replaced as the world's reserve currency by a basket of denominations, including the euro, yen and sterling.

Soros added that the world's financial system needs to be reformed so the dollar is subject to the same discipline imposed on other currencies. If enacted this move would closely resemble a recommendation made by a United Nations study group, which also said that in order to make the globe more stable the world should move to a collection of currencies.
All this may be so, but the Forbes Investor Team is not yet ready to quit on the greenback.
Greg Ghodsi, the head of the 360 Wealth Management Division at Raymond James says that since last fall the dollar has been near the top of all currencies and that he is exposed to it via exchange-traded funds (ETFs). Specifically he uses the PowerShares DB U.S. Dollar Index Bullish Fund (NYSE: UUP), which tracks the buck. He added that the dollar became more attractive last summer, when commodities prices drastically decreased. Ghodsi also says that if there is a rebound in world growth, commodities should do well once again, as should the currencies of commodity-heavy nations. To take advantage of any action here Ghodsi owns the Currency Shares Australian Dollar Trust ETF (NYSE: FXA). Altogether Ghodsi has 10% of his portfolio in currencies, down from 15% six months ago. His currency allotment decreased once the dollar started to gain strength. He uses the foreign currency ETFs as a way to diversify his cash holdings, not for trading. So how have these currency plays done? The dollar ETF is up 1.6% over the past six months and has risen 13.1% over the past year. The Australian dollar ETF is up 4.7% over six months but is down 21.2% over the past year. John Osbon, head of Osbon Capital Management, also plays currencies via ETFs, which makes sense since Osbon doesn't pick individual securities. He says the dollar is the best in a bad lot. Soaring spending and "free" money hurt the greenback, he adds, but the rest of the world is facing similar problems. At least the U.S. has the advantage of having faced such problems early on. Even so, Osbon only has one currency ETF, the WisdomTree Dreyfus Chinese Yuan Fund (NYSE: CYB). The fund seeks to earn income reflective of money-market rates in China available to foreign investors and to provide exposure to movements in the Chinese yuan relative to the U.S. dollar. The fund is 11 months old and so far has returned 1.2% in that time. Osbon likes it because he sees it as a play on China's fiscal strength, profiting by that nation's trade surpluses and $1 trillion in reserves. Full Story:
ETF BASIC NEWS April 15, 2009 4:57pm

3 Pitfalls Of Leveraged And Short ETFs

pitfallShort and leveraged ETFs are one of the most powerful and misunderstood tool available to investors. Just like a power tool, short and leveraged ETFs can cause a lot of damage and do a lot of good. Here's how to use them correctly.    Short ETFs have been the best performing asset class ever since the market meltdown started in October 2007. Many short ETFs gained 100% or more and singlehandedly transformed a disastrous market into a profitable one.

Nevertheless, there are pitfalls investors need to be aware of. Otherwise unwanted side effects could leave you with all the sizzle and none of the steak.

The basics

Short ETFs intend to replicate 1x, 2x or 3x the daily inverse performance of the underlying index. Leveraged (long) ETFs intend to deliver 2x or 3x the daily performance of the underlying index. The leveraged component magnifies the performance of the underlying index while the short component delivers the opposite or inverse performance of the index.

Example: (leveraged) short ETFs

To illustrate, let's take a look at a suite of short or inverse ETFs linked to the S&P 500 Index (NYSEArca: SPY). The Short S&P 500 ProShares (NYSEArca: SH) aim to deliver the opposite daily performance of the S&P 500, the UltraShort S&P 500 ProShares (NYSEArca: SDS)  aim to deliver twice the opposite daily performance of the S&P 500 while the Direxion Large Cap Bear 3x Shares (NYSEArca: BGZ) aim to deliver triple the opposite daily performance. A 1% loss in the S&P 500 would (ideally) translate into a 1% gain for SH, a 2% gain for SDS and a 3% gain for BGZ.

Example: leveraged (long) ETFs

On the flipside, the objective of the Ultra S&P ProShares (NYSEArca: SSO) is to deliver 2x the performance of the S&P 500 while the Direxion Large Cap Bull 3x Shares (NYSEArca: BGU) aim to deliver 3x the performance of large cap stocks as represented by the Russell 1000 Index (NYSEArca: IWB), there is no triple leveraged long ETF linked to the S&P 500.

Full Story:

ETF BASIC NEWS April 15, 2009 3:32pm

Index IQ is planning Another 15 hedge-fund ETFs

hedgefund1Less than a month after launching what it called the first U.S. ETF based on hedge fund strategies, Index IQ is planning to expand the category to 15 more indexes. The company has filed papers with the Securities and Exchange Commission seeking approval of the new exchange traded funds. Like the IQ Hedge Multi-Strategy Tracker ETF (QAI), which the firm announced March 25, the new products are apparently structured as "funds of funds" that are designed to mimic the performance of certain hedge fund strategies. Full Story:
ETF BASIC NEWS April 15, 2009 3:08pm

Two Things Fueling Commodity ETFs

commoditiesAs with other parts of the market, certain commodities and their exchange traded funds (ETFs) have shown some signs of life and have started to recover. Part of this recovery can be attributed to President Barack Obama’s $787 billion stimulus package, which is aimed to target the construction industry, the Federal Reserve’s actions to put more spending money in the hands of consumers and businesses and other similar stimulus packages and interest rate cuts seen around the globe. Granted crude oil is a far cry from its peak of $147/barrel seen in July, but the volatile commodity has gained about 40% since February of this year.  Take a look at United States Oil (USO), which is up 7.12% over the last month. Many analysts suggest that black gold will continue to be a “hot commodity” because of tensions in oil-producing regions and the rise in the middle class of Asian countries, especially China. Full Story:
NYSE:GLD April 15, 2009 11:02am

XShares Out Of Target-Date Series – retirement exchange-traded funds?

tdxTDX Independence Funds Inc., which is controlled by TD Ameritrade, is asking the Securities and Exchange Commission for permission to make Amerivest Investment Management the investment advisor to its series of five target-date retirement exchange-traded funds. Amerivest is perhaps best-known by ETF investors for its commission-free trading accounts. The TD Ameritrade unit charges its ETF customers set fees based on asset levels in exchange for asset allocation advice. In the request, dated April 10, current adviser XShares wouldn't be immediately removed as adviser to the TDX Independence funds. But the filing says that TDX believes "that is foreseeable that Amerivest may replace XShares as the investment adviser to TDX Funds." The filing states: "Applicants seek the relief so that, in the circumstance where XShares no longer serves as investment adviser to the funds, the TDX funds and Amerivest may rely on the order granted ... " Full Story:
ETF BASIC NEWS April 15, 2009 10:29am

Invesco PowerShares Celebrates 10-Year Anniversary of PowerShares QQQ(TM)

happy-birthdayInvesco PowerShares Capital Management LLC, a leading provider of exchange-traded funds (ETFs), today announces the 10-year anniversary of the PowerShares QQQ(TM) Portfolio (NASDAQ: QQQQ). "Since trading began on March 10, 1999, the PowerShares QQQ(TM) has become one of the most actively traded securities in the world, fostering wide-scale acceptance of the ETF structure among institutions, traders and retail investors," said Bruce Bond, president and CEO of Invesco PowerShares. "Today we are proudly celebrating with the NASDAQ OMX Group the success of this landmark ETF." PowerShares QQQ(TM) has maintained an average daily trading volume of over 92 million shares, making it the most traded equity security in the world since its inception.(1) The PowerShares QQQ(TM), formerly known as "NASDAQ-100 Index Tracking Stock®," is based on the NASDAQ-100 Index®. The Index includes 100 of the largest domestic and international non-financial companies listed on The NASDAQ Stock Market based on market capitalization. The PowerShares QQQ(TM) represents companies across major industry groups such as information technology, healthcare, consumer discretionary and staples, industrials, materials and telecommunication services. The portfolio is rebalanced quarterly and reconstituted annually. Effective March 21, 2007, The NASDAQ OMX Group, Inc. transferred sponsorship of QQQ to Invesco PowerShares Capital Management LLC, and the NASDAQ-100 Index Tracking Stock® was renamed PowerShares QQQ(TM). Today, PowerShares QQQ(TM) continues to track 100 of the largest, most innovative non-financial companies listed on The NASDAQ Stock Market. Full Story:\ACQINW200903100900MRKTWIREUSPR____0480526.htm
NASDAQ:QQQQ April 15, 2009 9:59am

OPEC: Global oil demand falls further

oil1The Organization of the Petroleum Exporting Countries says demand will drop by 1.37 million barrels per day in 2009, a sharper decline than previously forecast. LONDON (Reuters) -- World oil demand is shrinking faster than previously thought as a slowing global economy erodes consumption, OPEC said on Wednesday. The Organization of the Petroleum Exporting Countries said in its Monthly Oil Market Report that demand would drop by 1.37 million barrels per day (bpd) in 2009 to average 84.2 million bpd. Its previous forecast was for demand to fall by 1.01 million bpd. Demand is falling fastest in the developed nations of the Organization for Economic Co-operation and Development (OECD), but the global downturn has also curbed previously rapid demand growth in developing countries like China and India. Demand growth in countries outside the OECD has fallen by 90% year-on year, OPEC said, and is now expected to increase by just 200,000 bpd in 2009. "Unlike last year, non-OECD oil demand growth has lost 90% of its strength this year," OPEC said in its report. Full Story:
ETF BASIC NEWS April 15, 2009 9:57am

Gold turns lower after U.S. inflation data

imagesLONDON (Reuters) - Gold turned lower on Wednesday after U.S. inflation data showed a suprise drop in consumer prices, and as the dollar reached session highs versus the euro, denting the metal's appeal as an alternative investment.  Prices steadied, however, and remained rangebound amid conflicting signals on inflation and the outlook for equities.  Spot gold was bid at $889.05 an ounce at 1308 GMT (9:08 a.m. EDT) against $888.85 late in New York on Tuesday.  U.S. inflation data for March showed a dip of 0.1 percent in the consumer price index, against expectations for a rise of 0.1 percent. Consumer prices recorded their first annual drop since 1955.  "Short term, these figures are obviously not bullish for gold, but in the longer term you have to look past the current fall in inflation," said Standard Bank analyst Walter de Wet.  "With all the quantitative easing and low interest rates, inflation is going to head up again. That is why gold only moved a few dollars."  The precious metal is often bought as a hedge against rising inflation, and prices can be dented by deflationary signals.  On the foreign exchange markets, the dollar rose to session highs versus the euro in the wake of the numbers. A stronger dollar tends to weigh on gold, which is often bought as an alternative investment to the U.S. currency.  The euro earlier fell against the dollar after European Central Bank Governing Council member Axel Weber said the central bank will announce a package of "non-standard measures" in May Full Story:
ETF BASIC NEWS April 15, 2009 9:21am

South Korea due to be upgraded to “developed market,” Will Be dropped From EEM ETF

southkoreaSouth Korea is due to be upgraded from "emerging market" to "developed market," which means it will be removed from the iShares Emerging Markets ETF(EEM Quote), long a popular proxy for emerging market investing. South Korea has been one of the largest components of the fund, so its removal will make way for smaller countries and more volatility. Investors buy foreign stocks, including emerging markets, to diversify their portfolios. For most people, this means buying a broad-based fund like the iShares Emerging Markets ETF. However, broad-based funds can be a less efficient means of diversification because they blend countries with different attributes, nullifying some of the effect. A better solution is to invest at the country level, either with country funds or individual stocks. The pending change in iShares Emerging Markets ETF makes this a good time to reconsider how to access the space. Chile and Thailand make for an excellent compare-and-contrast. Chile is a commodity-based economy (copper), has a trade surplus, a stable government and privatized social security, which creates a constant source of demand for equities. In contrast, Thailand has a history of instability, both in its currency (it was ground zero for the Asian contagion in 1997) and its government (there have been ten coups since 1933). Thailand is making news today due to questions about the legitimacy of Prime Minister Abhisit Vejjajiva, which has caused the currency to wobble. Full Story:
ETF BASIC NEWS April 15, 2009 8:24am

World Gold Council appoints new head of Exchange Traded Gold

gold1UAE. The World Gold Council (WGC) has today announced the appointment of Jason Toussaint as Managing Director of Exchange Traded Gold (ETG) Toussaint will be based in WGC's New York Office and joins the organisation from his position as Senior Vice President and Senior Investment Strategist at Northern Trust Global Investments. He has over 14 years experience in the global investment banking industry having also worked at Morgan Stanley and JP Morgan, and in the US, Asian, European and the Middle Eastern markets. Jason has extensive knowledge of the ETF market having developed investment solutions for institutional investors and contributed to strategy development in the pensions market whilst in previous roles. Commenting on his appointment, Jason Toussaint said: "It is exciting to be joining an organisation that is highly relevant and crucial to today's investment market - the demand for gold investment has soared in recent years, and gold ETFs have made a significant contribution to this growth. I look forward to the challenge of working in such a dynamic industry and with the very talented and experienced people at World Gold Council Aram Shishmanian, CEO, World Gold Council , said: "As the fall out from the global economic crisis continues to affect millions of investors around the world, many are wondering where it is safe to put their money.... .... Exchange Traded Funds are the newest way of investing in gold. The vehicle allows the metal to be traded in the form of a security on a stock exchange. By design, this form of securitised gold investment is expected to track the gold price almost perfectly. Unlike derivative products, the securities are 100% backed by physical gold held mainly in allocated form. Exchange traded gold provides retail and institutional investors with an efficient and cost-effective way to invest in gold. When introduced, the gold ETF overcame the previous barriers to gold as a practical asset and trading tool and revolutionised the market. Full Story:
ETF BASIC NEWS April 15, 2009 6:59am

Drop in Oil and Gas Prices Masks Production Problems

oilMoody’s says the drop in oil and gas prices over the last year may have given some US oil and gas producers an opportunity to mask production problems — as opposed to uneconomical conditions — that may have contributed to downward revisions in their reserves. Amid the steep drop in commodity prices, the reserves considered economical to produce under SEC rules have dwindled and independent exploration and production (E&P) companies’ reported reserves have dropped accordingly, Moody’s says. Changes in pricing rules which come into effect on January 1, 2010, promise a far less volatile valuation for oil and natural gas reserves over the years. Full Story:
NYSE:UNG April 14, 2009 9:32pm

ETF Expert: Should You Be Buying What China Buys?

china3Historically speaking, U.S. Federal Reserve policy had a direct and sometimes predictable impact on investment direction. In the 20th century, lower overnight lending rates meant good things for stocks. And, if the Fed tightened its grip by raising target rates, you might cut back your equity exposure with great success. As we arrived in the 21st century, however, the results of "following the Fed's lead" has had mixed results. The Fed's rapid rate increases leading up to the dot-com collapse did little to deter Nasdaq euphoria... at least for several years. Then in March of 2000, the reality of the rate increases contributed to the quickness with which sentiment became bearish. (Only then did many exclaim, "See, you can't fight the Fed and win.") In 2004/2005/2006 the Fed raised rates consistently, albeit slowly.Yet stocks prospered throughout a rate raising environment. And even the dramatic rate cuts throughout 2008 did little to stop the 2nd worst bear in 100 years. In other words, you could easily have fought the Fed's rate cutting activity by deciding against the stock market... and won. Now the Fed is buying U.S. treasuries.  Most seem to think it would be a better idea to sell them. And the Fed is also buying mortgage-backed securities. Most seem to think this is actually a good investment. (See "Rethinking Mortgage-Debt ETFs.") Following the Fed in the 21st century, then... mixed results. Similarly, we might have been inclined to buy what the U.S. government wished to buy through its TARP program. Former Secretary Paulson infused capital into banks via preferred shares acquisitions. Even uber-bank-bear Meredith Whitney agreed that preferred shares were a good buy for investors. Yet nearly all preferred shares of the majors are trading at lower prices today than they were trading at when TARP 1.0 went into effect. In the end, one comes to the conclusion that there's no sure-fire thing. Just because your government's "doing it," does that mean you should jump on the same bandwagon? Sometimes yes, sometimes no. It follows that another major economic force in the world has been making scores of investment decisions. One has to wonder, might we choose to buy the things that China is buying? Full Story:
ETF BASIC NEWS April 14, 2009 4:50pm

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