Archive for April, 2012
Dion’s Tuesday ETF Winners and Losers
NEW YORK (TheStreet) — Here are today’s ETF Winners and Losers. Winners Global X Uranium ETF (URA) 4.9% After yesterday’s choppy trading session, U.S. stock indices are heading skyward. This upward action is igniting strength across resource producer ETFs like URA, the SPDR S&P Metals & Mining ETF (XME), and the Market Vectors Coal ETF (KOL). After a multi-week spate of weakness, URA appears to be showing signs of stabilizing. Nevertheless, I encourage investors to watch this fund from the sidelines. Market Vectors Solar Energy ETF (KWT) 4.4% News that U.S.-based solar giant, First Solar (FSLR), is planning sweeping layoffs sent shares of the company soaring over 8% in early afternoon trading. Other major solar players including Trina Solar (TSL), MEMC Electronic Materials (WFR), and Yingli Green Energy (YGE) are also seeing impressive gains. These firms can be found representing major slices of both KWT’s and Guggenheim Solar ETF’s (TAN) portfolios. iShares MSCI Italy Index Fund (EWI) -3.7% They remain unresolved, but heading into the middle of the week, it appears as though Europe’s macroeconomic woes have subsided for the time being. The Italy ETF, in fact, is on the verge of locking in a second consecutive day of gains. Spain has become the major global elephant in the room. This does not mean, however, that the iShares MSCI Spain Index Fund (EWP) is the only Europe-related instrument to avoid. The EU and the rest of the European continent have a substantial hill to climb; investors looking to construct a relatively safe international portfolio should look elsewhere. First Trust ISE Revere Natural Gas Index Fund (FCG) 2.4% April has been a rough month for FCG so far. Counting Tuesday’s performance, the troubled fund has seen only three days of upward action. FCG is not alone in this weak monthly showing. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has also only seen three days of strength this year. Given the trials still major commodity consumers like China, I am hesitant about recommending investors dive into energy at this time. Losers iPath S&P 500 VIX Short Term Futures ETN (VXX) -5.9% The fear-tracking VIX benchmark managed to close out yesterday’s trading action with some upward strength. Despite this performance, VXX and the iPath S&P 500 VIX Mid Term Futures ETN (VXZ) still managed to suffer losses. Source – TheStreet.com
How to Manage Risk Using ETFs
NEW YORK (TheStreet) — Throughout the opening weeks of April, investors have been reminded of the challenges that continue to plague the global marketplace. With the debt drama facing Spain and the rest of the troubled euro-region making its way back into the headlines, the calm that defined the opening months of the year has been cast aside and replaced by an uptick in risk-producing volatility. U.S. stock market indices have seen a notable retreat; the S&P 500, Dow Jones Industrial Average andNasdaq are all trading at or around their 50-day moving averages. This short streak of weakness may be disappointing, but investors should avoid letting it incite panic-selling. Corrections are healthy and expected during any period of strength and, by keeping a level head and maintaining a well-balanced portfolio, it is possible to navigate through periods of turmoil. If the threat of upheaval is too pressing, though, nervous individuals can make a few portfolio adjustments that will allow them to dial down the risk. The stock market rally that persisted during the opening quarter of 2012 was encouraging, and likely inspired some investors who were battered during the closing months of 2011 to take on exposure to added risk in order to recoup losses. Unfortunately, many inherently risky instruments have received the most substantial haircuts as the market mood has soured. Case in point, in looking through the recent one-month performance of broad, benchmark-tracking ETFs, small- and mid-cap focused products like the iShares Russell 2000 Index Fund (IWM) and the iShares S&P MidCap 400 Index Fund (MDY) have led the way lower. Because they tend to exhibit more pronounced upward swings, taking aim at these riskier corners of the style box can be an attractive endeavor during periods of seemingly relentless market strength. However, it is crucial to remember that the fluctuations occur in both directions. Investors can offset the detrimental impact that will occur in the event that laggard performance continues, by ramping exposure to safer regions of the stock market. Large-cap index-tracking products like the SPDR Dow Jones Industrial Average Index Fund (DIA)allow individuals to maintain exposure to market-correlated equities, albeit from a slightly safer perspective. While effective for those looking to weather turmoil, the large-cap focus of funds like DIA and the SPDR S&P 500 ETF (SPY) can be a turnoff for those looking to avoid big and boring plays. With earnings season getting into full swing, however, the fund could be in for some excitement in the days ahead. Source – TheStreet.com
Dion’s Monday ETF Winners and Losers
NEW YORK (TheStreet) — Here are today’s ETF Winners and Losers. Winners iShares Cohen & Steers Realty Majors Index Fund(ICF) 1.8% U.S. stocks are seeing mixed action as the macroeconomic trials and earnings news battle for investor attention. Despite these trials, real estate is seeing some inklings of strength. The strength can be felt across various corners of the sector. In addition to seeing ICF head higher, funds like the iShares Dow Jones U.S. Home Construction Index Fund (ITB), which track homebuilders are trading in positive territory. Market Vectors Vietnam ETF (VNM) 1.6% Even with macroeconomic headwinds making their way back into global headlines, the Vietnamese marketplace has witnessed impressive resilience. Shares of VNM are heading higher during midday trading, revisiting 2012 highs. It is common to see VNM move to the beat of its own drum. This uncorrelated performance may be attractive during periods of shakiness, but this fund should still be approached with caution. United States Natural Gas Fund(UNG) 1.4% Energy-related exchange traded products are witnessing choppy action. UNG, however, is sitting in solid positive territory. At the same time that UNG is heading higher, the iPath Dow Jones UBS Natural Gas Subindex Total Return ETN (GAZ) it seeing losses. The culprit behind GAZ’s downturn is its 100% premium. Continue to avoid this product. Losers iPath S&P 500 VIX Short Term Futures ETN(VXX) -2.3% The fear-tracking VIX benchmark is heading lower even as major stock market indices exhibit mixed performance. These losses are translating over the VXX and other index-tracking instruments. Fear has staged a comeback in recent weeks. However, VXX and the iPath S&P 500 VIX Short Term Futures ETN (VXX) have seen limited moves to the upside. iShares MSCI Russia Capped Index Fund (ERUS) -1.9% ETFs linked to Russia’s marketplace are heading lower as energy producers take hits. With substantial chunks of their portfolios dedicated to oil and gas companies like Gazprom and Lukoil, ERUS, the Market Vectors Russia ETF (RSX) and other similar products are heavily susceptible to swings in the energy sector. Market Vectors Gold Miners ETF (GDX) 1.6% Precious metals producers are struggling even as bullion-backed products see only tepid action. Thanks to Monday’s downturn, GDX has retreated towards 2012 lows. This fund and the Market Vectors Junior Gold Miners ETF (GDXJ) have hit a rough patch in recent weeks so looking ahead it will be interesting to see if they can find some solid ground. All prices as of 2:10 PM DST Source – TheStreet.com
