Seeking Alpha

Etf Planet's  Instablog

ETF Planet (http://www.etfplanet.com/) was founded by Jason Neault in 2006 to cover product and market developments related to exchange-traded funds (ETFs). The site covers ETF sponsors, their overall strategies, and any significant developments regarding their products. The site provides news... More
My business:
ETF Planet
My blog:
etfplanet.com
  • Market Correction Looming?
    By: Antolin Garza of RGV Capital LLC
    Today the S&P 500 (SPY) is flirting with new highs, based on our research this price action is to continue and should cause the index to close at a brand new high for the year. The technical picture looks bleak. For the last month, the market has continued its rally on lower than average volume. Fundamentally, the facts show that although there are signs of improvement in the economy, the full extent of the recent rally is unjustified. The consumer will continue to be a drag on the economy. The average consumer is still in a deleveraging/saving frame of mind and does not have a strong appetite for new credit to finance larger purchases. With unemployment continuing to be a threat, and consumers racing to either save or pay down debt, our view of economic growth seems to be temporarily constrained. A good percentage of this year’s market rally can be justified fundamentally, relative to the desperately oversold levels we were in during February. Most companies have cut costs which in turn, has increased profitability, but the real question, and what we believe will hinder positive results this coming earnings season is top line growth. After all the major cost cutting efforts that occurred throughout the recession, companies are poised to meet and possibly beat expectations on the bottom line. Our focus this earnings season is on new revenue. If companies don’t improve the top line it only shows that any good result is a function of cost cutting efforts that simply will not be sustainable in the long term. 
    We expect to see a near term shortfall in the market in the range of up to 10%. A way to hedge your portfolio or make a play on this information, would be to short the S&P 500 (SPY) or put on a contrarian position on the temporarily media, and investor hated US Dollar (UUP). Going long the US Dollar (UUP) would temporarily hedge you against a market shortfall because it has been trading inversely to S&P 500 (SPY). Our long term view on the US Dollar is bearish for obvious reasons, but in the near term a short term rally in the US Dollar(UUP) is rather probable. The chart below shows a comparison between the recovery periods. The 1974-75 upswing vs. this year’s market rally. If you notice, there are many similarities between both time periods. When we started comparing both upswing back in August we used it’s .93 correlation to project the future moves of the S&P 500 (SPY). As of now it has been fairly accurate and following its course. If this analysis holds true, there is a slight pullback on the horizon.
    More »
    Tags: UUP, SPY, ETFs, Market Correction, 1974
    Oct 09 01:37 pm | Link | Comment!
  • Solar ETF Update: TAN vs. KWT
    Over a year ago we took a look at the two most popular solar ETFs, Claymore’s Global Solar Energy Index (TAN) and Van Eck’s Market Vectors Solar Energy ETF (KWT). At first glance these two funds look to be quite similar, and in many aspects they are. However, a closer look reveals many of their differences in structure, size, and value.

    The first solar energy ETF to hit the market was Claymore’s TAN, which tracks the MAC Global Solar Energy Index. This index has grown from 25 securities a year ago, to 30 today.  The market cap size over the past year has drifted lower to small (51%), mid (38%), and large cap (11%) companies. Shortly after the launch of TAN, Van Eck’s KWT hit the market, which tracks the Ardour Solar Energy Index. This index is comprised of 29 securities, up from 27 a year ago, covering small (38%), mid (53%), and large cap (9%) companies. When looking at the top five holdings of the two funds as a percentage of the total fund, TAN’s top five have dropped from 34% to 25%, whereas KWT’s top five has dropped from 47% to 31% of the fund. Also worth noting is MEMC Electronic Materials (WFR) was previously absent from KWT, but is now the fund’s third largest holding.

    On a value comparison, TAN’s average trailing P/E ratio is around 13, while KWT is sporting a 14 trailing P/E. When looking at the top three in country allocation, TAN is 30% China, 30% United States, and 27% Germany compared to KWT’s 35% United States, 27% Germany, and 27% China.

    Over the past year both of these ETFs have shifted to a smaller average market cap, and have seen their P/E ratios drop significantly. Although KWT has become more diversified, Claymore’s TAN still seems to be the better choice.
    Tags: TAN, KWT, WFR, Solar Energy, ETFs
    Oct 06 10:12 am | Link | Comment!
  • PIMCO Battles iShares for Treasuries

    The new PIMCO 1-3 Year US Treasury ETF (TUZ) has been trading for two days now, as the bond giant’s first stab at the ETF market. The 1-3 Year U.S. Treasury Index Fund is a passively managed exchange-traded fund comprising primarily the high-quality component securities of the Merrill Lynch 1-3 Year U.S. Treasury Index. Management fees are listed at 15 basis points, which is the same as its primary competitor, the $7 billion iShares Barclays 1-3 Year Treasury Bond Fund (SHY). Given PIMCO’s position in the bond community, it shouldn’t be too hard to chip away at the mammoth iShares fund over time.

    Tags: TUZ, SHY, ETF, New ETFs, Treasuries
    Jun 03 11:31 am | Link | Comment!
  • Money Flows to Fixed Income ETFs in Q1

    Today, ETFPlanet has released its complete list of Exchange Traded Funds for the first quarter ending March 31, 2009.   During the first quarter ETF and ETN assets totaled approximately $475 billion, down from the $541 billion at year end 2008, representing a 12% drop in assets. The number of issues also decreased from 845, to 839 during the same period. Listed below are the ten largest ETFs by net assets, and the change since December 31, 2008. By analyzing the change in asset value, and performance of the fund over the quarter, you can start to see where investors’ money is flowing. According to our data money was flowing into fixed income during the first quarter, as assets in iShares iBoxx Corporate Bond (LQD) and iShares TIPS Bond (TIP) both increased over 30%, while their performance was -6.4% and 3.5%, respectively. Assets in the iShares MSCI Emerging Markets ETF (EEM) increased over 10%, while the fund’s return was -0.6%.

    One of the more exciting developments in the ETF community has been the increasing popularity of the Direxion 3x funds, which have grown to over $3 billion under management since their funds’ inceptions beginning in November 2008, and up from $1 billion at the end of 2008. The biggest gainer in assets was the Financial Bull 3x (FAS), which gained over $1 billion in assets during the quarter.  

    More »
    Tags: FAS, TIP, LQD, EEM, SPY, EFA, GLD, IVV, QQQQ, AGG, IWF, ETF Assets Under Management, Money Flow, Net Assets
    Apr 20 11:42 pm | Link | Comment!
  • XRO Sheds Energy & Tech for Finance & Medical

    The Claymore/Zacks Sector Rotation ETF (XRO) recently rebalanced the fund’s holdings, on April 2nd.  The ETF is based on the Zacks Sector Rotation Index, which uses a quantitative methodology to overweight sectors with “potentially superior risk-return profiles”.  The sector allocation is done on a quarterly basis. 

    More »
    Tags: XRO, ETFs, Sector Rotation Funds
    Apr 13 11:48 pm | Link | Comment!
Full index of posts »
Latest Followers
Posts by Ticker
AGG, EEM, EFA, FAS, GLD, IVV, IWF, KWT, LQD, QQQQ, SHY, SPY, TAN, TIP, TUZ, UUP, WFR, XRO
Posts by Themes
1974, ETF, ETF Assets Under Management, ETFs, Market Correction, Money Flow, Net Assets, New ETFs, Sector Rotation Funds, Solar Energy, Treasuries
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.