Nov. 28, 2015, 9:42 AM
- Looking for an edge on when it might be profitable to rotate into small-caps, Nomura quants Joe Mezrich and Adam Gould watch three factors: 1) Their cheapness relative to large-caps; 2) economic uncertainty as measured by the dispersion of earnings estimates for the S&P 500; 3) expectations for economic growth as indicated by the yield curve.
- SInce 1980, the alignment of these factors pointed to small-cap outperformance over the subsequent three months worth an annualized average of 7.6%. Trying the strategy live for two years - long Russell 2000/short Russell 1000 when things look good for small-caps, and the opposite otherwise - has produced a 10% annualized return vs. a passive long position in small-caps which lost 5%.
- The team's signals suggested a good three months for small caps starting in November, and it's already working - the FTSE Russell 2000 is outperforming the Russell 1000 by nearly 300 basis points this month. There's still another two months to get small.
- Source: Bill Alpert in Barron's
- ETFs: IWM, TZA, TNA, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, VTWO, SAA, VIOO, SDD, SBB, JKJ, RSCO, TWOK, FYX, EWRS, ZSML, LLSC, SMLL, RYRSX
Sep. 10, 2015, 12:39 PM
- The CBEO Russell 2000 Volatility Index has dipped to 26.33, while the CBOE Volatility Index (VIXX) has risen to 26.51.
- Pick your reason, but the fact that small caps tend to do more business at home vs. the more multinational large-caps makes for as good of an excuse as any.
- The upshot, however, is of more import: Those itching to buy protection (or play for a bull market), may want to look at what are now relatively cheap options on the IWM rather than on the S&P 500.
- Source: Barron's
- ETFs: IWM, TZA, TNA, UWM, VB, IJR, VBR, SLY, EES, RWJ, VBK, URTY, SCHA, TWM, RVT, RWM, SRTY, VTWO, SAA, JKL, VXX, UVXY, TVIX, XIV, SVXY, VIXY, ZIV, VXZ, VIXM, CVOL, VIIX, XVZ, XXV, XVIX, TVIZ, IVOP, VIIZ, VXUP, VXDN
Oct. 15, 2014, 3:08 PM
- Way out in front on the way down, might the Russell 2000 (IWM -0.4%) lead the path back up? An afternoon move higher has the small-cap index down just 0.25% after being off nearly 2%.
- The Dow (NYSEARCA:DIA) has moved 170 points off of its low, now down 1.6%, and the Nasdaq 100 (NASDAQ:QQQ) - lower by nearly 3% at one point - is off just 1.25%.
- Small-cap ETFs: IWM, TZA, TNA, IWC, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, SAA, DWAS, VTWO, VIOO, SDD, PZI, SBB, FDM, RSCO, JKJ, WMCR, FYX, EWRS, XSLV, TWOK, SMLV, PXSC, CSF
Oct. 13, 2014, 1:33 PM
- Electronic Cigarettes International Group, Ltd. (OTCQB:ECIG) is set for its IPO of 33.3M shares of common stock at a prospective price of $4.50 per share. The firm is selling 28,443,133 shares and selling shareholders are offering 4,890,200.
- The company markets and distributes electronic cigarettes and accessories through over 50K outlets in multiple countries.
- Proforma 2013 financials: Revenues: $113.2M; Gross Profit: $55.5M; Operating Expenses: $48.9M; Operating Income: $6.5M; Net Loss: ($11.4M); Loss Per Share: ($0.11).
- Proforma 1H 2014 financials: Revenues: $48.5M; Gross Profit: $26.8M; Operating Expenses: $57.9M; Operating Loss: ($31.1M); Net Loss: ($10.5M); Loss Per Share: (0.08).
- Actual 1H 2014 financials: Revenues: $15.4M (+862.5%); Gross Profit: $8.2M (+780.1%); Operating Expenses: $92.8M (-999%); Operating Loss: ($84.6M); Net Loss: ($84.5M); Loss Per Share: ($1.23); Quick Assets: $5.6M (+166.7%); Cash Burn Ops: ($10.9M) (-999%).
- The company expects Q3 2014 revenues to be $16M - 17M (pro forma net $22.9M - 24.3M).
- ETFs: IWM, TZA, TNA, IWC, UWM, VB, IJR, SLY, RWJ, VBK, URTY, SCHA, TWM, IWO, RWM, IJT, SRTY, SAA, DWAS, VTWO, SLYG, VIOO, SDD, RZG, PZI, SBB, RSCO, FDM, JKJ, UKK, VTWG, VIOG, WMCR, FYX, EWRS, XSLV, TWOK, SKK, JKK, SMLV, PXSG, FYC, PXSC, CSF
- ETFs: IRY, IXJ (IPO -0.5%)
Sep. 19, 2014, 2:41 PM
- There's not a lot of action in the large cap averages this session, but the Russell 2000 (IWM -1.1%) continues to shed ground both absolutely and relative to the S&P 500, and has now turned negative for the year - it's lower by 1.1% YTD, ceding about 1000 basis points to the S&P,
- Maybe bearish, but probably bullish for those with a contrarian streak, technicians are starting to warn about the dreaded "Death Cross" - the 50-day moving average moving below the 200-day moving average. Ryan Detrick points out 19 instances since 1988 where the Russell 2000 has completed a Death Cross - it's tended to be bearish in the very short-term, but bullish over longer periods.
- ETFs: IWM, TZA, TNA, IWC, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, SAA, DWAS, VTWO, VIOO, SDD, SBB, PZI, FDM, JKJ, RSCO, WMCR, XSLV, FYX, EWRS, TWOK, SMLV, PXSC, CSF
Jul. 25, 2014, 2:31 PM
- Hammering away at the misconception that it pays to seek active managers in supposedly "less efficient" sectors like small caps, S&P Dow Jones' Philip Murphy finds - even choosing among the top mutual fund share classes - an alarmingly small number of managers failed to beat the benchmarks.
- Starting at the March 2009 bottom and going out five years, only 9 of 139 share classes beat the S&P SmallCap 600 benchmark (that's 5.9% of the starting set).
- Where alpha might be able to be delivered though, is in choosing which benchmark to track. A fund tracking the S&P SmallCap 600 (IJR, VIOO) would have outperformed one tracking the Russell 2000 (NYSEARCA:IWM) by 23% over the 5-year period.
- ETFs: IWM, TZA, IJS, TNA, IWC, UWM, VB, IJR, SLY, VBR, EES, RWJ, VBK, URTY, SCHA, TWM, IWN, IWO, IJT, RWM, SRTY, DWAS, SAA, VTWO, JKL, RZV, SLYG, SLYV, VIOO, SDD, PZI, RZG, FDM, SBB, RSCO, WMCR, VIOG, JKJ, VTWG, UKK, TILT, VIOV, FNDA, XSLV, FYX, FYT, EWRS, JKK, TWOK, SKK, VTWV, PXSV, SMLV, UVT, SJH, IESM, PXSC, VLU, FYC, PXSG
Jul. 10, 2014, 7:12 AM
- S&P 500 (SPY), Nasdaq 100 (QQQ), and DJIA (DIA) futures are all off about 0.9% and Russell 2000 (IWM) down 2% as trouble brews in the EU periphery.
- Banco Espirito Santo - Portugal's largest listed bank - is off another 16% as its parent reportedly considers bankruptcy protection unless a deal can be worked out with creditors. Portugal broad market is down another 4.1%, bringing its 7-session slump to 11%.
- Previously: Portugal tumbles on bank worry
- Europe's Stoxx 50 (FEZ) is down 2%, led by Italy (EWI) -2.5% and Spain (EWP) -2.6%.
- The 10-year U.S. Treasury yield is down four basis points to 2.51% and gold catches a serious bid, up $20 per ounce to $1,344.
- ETFs: SPY, QQQ, SH, DIA, IWM, TZA, TNA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, IWC, UWM, TQQQ, VB, SPXL, QID, RSP, IJR, SQQQ, DOG, SLY, QLD, DXD, RWJ, RWL, URTY, EPS, UDOW, SCHA, TWM, SDOW, DDM, RWM, SRTY, SAA, BXUB, DWAS, VTWO, QQEW, QQQE, VIOO, SDD, SFLA, PZI, FDM, SPLX, QQXT, SBB, BXUC, WMCR, RSCO, JKJ, FYX, XSLV, EWRS, TWOK, SMLV, SPUU, PXSC
Jul. 7, 2014, 1:45 PM
- "Knowingly overpaying never has made sense to me, which I think people are doing," says small-cap fund manager Eric Cinnamond, notable for being up 14.5% at the midway point in 2009 vs. peers' average loss of 27%, but missing out on the bull market of the last three years thanks to his large cash holdings.
- The small cap stocks on his radar are as "expensive as I have ever seen them," he tells the WSJ. "We're just unwilling to overpay with other people's mooney in high-quality, small-cap stocks."
- ETFs: IWM, IJS, TZA, TNA, IWC, UWM, VB, IJR, SLY, VBR, EES, RWJ, URTY, SCHA, TWM, IWN, RWM, SRTY, SAA, DWAS, VTWO, JKL, RZV, SLYV, VIOO, SDD, PZI, FDM, SBB, RSCO, WMCR, JKJ, TILT, VIOV, XSLV, FYX, FNDA, FYT, EWRS, TWOK, VTWV, SMLV, PXSV, UVT, SJH, IESM, PXSC, VLU
Jun. 10, 2014, 12:43 PM
- Introduced in October 2012, the iShares core lineup will double in size on June 12th with the addition of 10 new and existing iShares funds.
- Four new ETFs will roll out on Thursday to join the core lineup: iShares Core Dividend Growth ETF (DGRO), iShares Core MSCI Europe ETF (IEUR), iShares Core MSCI Pacific ETF (IPAC) and iShares Core GNMA Bond ETF (IUSB).
- Six of the funds are existing and will undergo name and some will also see ticker changes: iShares Russell 3000 Growth ETF (IWZ) will become iShares Core U.S. Growth ETF under the ticker IUSG; iShares Russell 3000 Value ETF (IWW) will become iShares Core U.S. Value ETF under the ticker IUSV; iShares High Dividend ETF (HDV) will become iShares Core High Dividend ETF and continue to trade under HDV; iShares Credit Bond ETF (CFT) will become iShares Core U.S. Credit Bond ETF under the ticker CRED; iShares U.S. Treasury Bond ETF (GOVT) will become iShares Core U.S. Treasury Bond ETF and continue to trade under GOVT; iShares Barclays GNMA Bond ETF (GNMA) will become iShares Core GNMA Bond ETF and continue to trade under GNMA.
- The original core iShares ETFs these funds will join: ITOT, IVV, IJH, IJR, IXUS, IEMG, IEFA, AGG, ILTB, ISTB
May 20, 2014, 4:37 PM
- Chicago-based Good Harbor Financial is among the largest ETF portfolio managers and the company in May began to rebalance its $11B U.S. Tactical Core Strategy twice a month instead of once - today marks the first mid-month trade for the portfolio, reports the WSJ.
- Good Harbor's main strategy today, says the Journal, looked to be selling small caps as well as two ETFs tied to the S&P 500 (SPY -0.7%), and volume spiked in the iShares Russell 2000 ETF (IWM -1.6%), the ProShares Ultra Russell 2000 (UWM -3%), the iShares Core S&P 500 ETF (IVV -0.7%) and the ProShares Ultra S&P 500 (SSO -1.5%).
- Good Harbors was the largest single holder of three of those funds as of the end of March, and the 2nd largest holder of the fourth.
- As it sold the equity ETFs, Good Harbors appeared to be buying two mid-to-long-dated Treasury bond ETFs, the iShares 7-10 Year Treasury Bond Fund (IEF +0.3%) and the ProShares Ultra 7-10 Year Treasury ETF (UST +0.7%), with both having volumes many multiples higher than normal.
- Good Harbors was also a seller of small caps and a buyer of Treasurys in early May, says the Journal, which earlier this year reported traders growing accustomed to waiting for the firm's monthly rebalance.
- ETFs: IWM, IJS, TZA, TNA, UWM, VB, IJR, SLY, EES, VBR, RWJ, VBK, URTY, SCHA, TWM, IWO, IWN, IJT, RWM, SRTY, DWAS, SAA, VTWO, JKL, RZV, SLYG, SLYV, VIOO, SDD, SBB, RZG, JKJ, RSCO, VTWG, UKK, VIOG, TILT, FYX, FNDA, VIOV, XSLV, FYT, SKK, JKK, EWRS, TWOK, PXSV, VTWV, SMLV, UVT, SJH, PXSC, IESM, FYC, VLU, PXSG
May 20, 2014, 10:06 AM
- The Russell 2000 (IWM -1.2%) has returned to leadership as markets move into the red in mid-morning action. The S&P 500 (SPY -0.3%), DJIA (DIA -0.4%), and Nasdaq 100 (QQQ) are faring better.
- Among S&P 500 sectors, the retailers are getting hammered, with weak results/outlooks at Dick's and Staples making news today.
- ETFs: IWM, TZA, TNA, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, DWAS, SAA, VTWO, VIOO, SDD, SBB, JKJ, RSCO, FYX, XSLV, EWRS, TWOK, SMLV, PXSC
May 15, 2014, 12:40 PM
- Coming in the same week when the Dow and S&P 500 hit new record highs, the Russell 2000 (IWM -1.6%) today tumbled into correction territory, now off 10.2% since its record high hit on March 4.
- The Dow (DIA -1%) and S&P (SPY -1.2%) haven't suffered a correction since 2011 H2, though the Nasdaq fell into correction in November 2012 (the tech index fell nearly 10% from March through mid-April this year, but bounced).
- The question at hand is whether the large-cap averages will follow the Russell. or continue to go their own way to new records.
- Small-cap ETFs: IWM, TZA, TNA, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, DWAS, SAA, VTWO, VIOO, SDD, SBB, JKJ, RSCO, FYX, XSLV, EWRS, TWOK, SMLV, PXSC
May 14, 2014, 11:20 AM
- The Dow and S&P are at all-time highs, but what are tumbling small caps and Treasury yields trying to say? Off nearly 1% today, the Russell 2000 (IWM) has returned to flat on the week after gaining about 2.5% on Monday. It's down roughly 9% from the March high.
- The 10-year Treasury yield, meanwhile, is off a big seven basis points today to 2.54% - its lowest print since October. A dovish monthly inflation report from England is helping, as are ideas the ECB is prepping even easier monetary policy to be announced at its June meeting. Ignored is today's PPI index showing a 0.6% jump in wholesale prices in April vs. expectations for just a 0.2% bump. TLT +1.1%
- ETFs: TBT, TLT, TMV, TBF, EDV, TTT, TMF, ZROZ, SBND, TLH, DLBS, VGLT, UBT, TLO, TENZ, LBND, TYBS, DLBL
- ETFs: IWM, TZA, TNA, UWM, VB, IJR, SLY, RWJ, URTY, SCHA, TWM, RWM, SRTY, DWAS, SAA, VTWO, VIOO, SDD, SBB, JKJ, RSCO, FYX, XSLV, EWRS, TWOK, SMLV, PXSC
May 8, 2014, 3:31 PM
- Making the rounds across trading desks is this chart showing the Russell 2000 (IWM -1%) this week closing below its 200-day moving average for the first time since November 2012.
- BAML's Macneil Curry adds a couple of additional technical ideas, noting Tuesdays this year have typically been positive, but not this week, and the Russell 2000 looks to be completing a 4-month head-and-shoulders top.
- The small cap index is now off 5.3% YTD vs. a 1.6% gain for the S&P 500. It's also now fallen below the S&P on a Y/Y basis, up 13.3% vs. the big cap's 14.9% gain.
- ETFs: IWM, IJS, TZA, TNA, UWM, VB, IJR, SLY, EES, VBR, RWJ, VBK, URTY, SCHA, TWM, IWO, IWN, IJT, RWM, SRTY, DWAS, SAA, VTWO, JKL, RZV, SLYG, SLYV, VIOO, SDD, RZG, SBB, RSCO, JKJ, VTWG, FYX, UKK, TILT, VIOG, FNDA, XSLV, VIOV, FYT, SKK, EWRS, JKK, TWOK, PXSV, VTWV, UVT, SMLV, SJH, IESM, VLU, PXSC, FYC, PXSG
Apr. 28, 2014, 1:20 PM
- A familiar pattern repeats as a sharp selloff in small caps (IWM -1.8%) and tech momentum names lead the broader decline in equities. The Nasdaq (QQQ -1%) is managing a sizable dip even as Apple gains 3%. Down 4.4% today, Facebook is back to about flat YTD, Twitter -4% on the session, is lower by 37% YTD. The iShares Biotech ETF (IBB -2.6%) has moved into the red for the year.
- Leading S&P 500 (SPY -0.4%) decliners are Bank of America -5.6% after suspending its capital plan, and Google -1.9%.
- What sector's working today? Consumer staples (XLP +0.8%). Proctor & Gamble +1.5%, Altria +2.3%, Pepsi +1.6%, Phillip Morris +1%.
- Index ETFs: SPY, QQQ, SH, IWM, TZA, TNA, SSO, SDS, PSQ, VOO, IVV, SPXU, UWM, UPRO, TQQQ, VB, SPXL, QID, IJR, RSP, SQQQ, SLY, QLD, RWJ, RWL, EPS, URTY, SCHA, TWM, RWM, SRTY, DWAS, BXUB, SAA, QQEW, VTWO, QQQE, TRND, VIOO, SFLA, SDD, QQXT, SBB, BXUC, RSCO, SPLX, JKJ, FYX, BXDB, XSLV, TNDQ, EWRS, TWOK, SMLV, PXSC
- Consumer staples ETFs: XLP, VDC, FXG, RHS, FSTA, PSL, PSCC
Apr. 28, 2014, 8:35 AM
- "It's hard to find a bargain out there," says Fidelity fund manager John Roth, as - even with two sharp small-cap selloffs this year - the Russell 2000 (IWM) is down only 3.5%, and still trades at a lofty 19.1x earnings. At the start of 2013, the index's P/E was 15.1, and the average since 1994 is 16.9. After trimming positions in Q1, Roth's New Millenium Fund holds just 12% of assets in small caps vs. an average of 19% from 2008-2013.
- Manager of the $240M Wasatch Small Cap Value Fund, Jim Larkings is keeping cash towards the higher end of his typical 2-8% of AUM. He's finding some value in those small caps reeling due to the broader selloff in high-growth tech, but "The real darlings aren't even close to value territory."
- Individual investors, however, continue to be believers, pouring $3.1B into small cap mutual funds to add to $16.4B in inflows last year.
- ETFs: IWM, IJS, TZA, TNA, UWM, VB, IJR, SLY, EES, VBR, RWJ, VBK, URTY, SCHA, TWM, IWO, IWN, IJT, RWM, SRTY, DWAS, SAA, JKL, VTWO, RZV, SLYG, SLYV, VIOO, SDD, RZG, SBB, RSCO, JKJ, UKK, VTWG, FYX, TILT, VIOG, FNDA, XSLV, VIOV, FYT, SKK, JKK, EWRS, TWOK, PXSV, VTWV, UVT, SMLV, SJH, IESM, VLU, PXSC, FYC, PXSG
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