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PowerShares DWA Financial Momentum Portfolio ETF (PFI)

- NYSEARCA
  • Oct. 7, 2013, 3:52 PM
    • Among banks and credit card names, FBR favors those picking up new teams/market share - namely Signature Bank (SBNY -1.4%) and Discover (DFS) - as well as those trading near book value, like HomeStreet (HMST -0.6%). PNC Financial remains a favorite for its strong growth prospects, as well as servicers like Nationstar (NSM +0.2%), Walter Investment (WAC -2.3%), and New Residential (NRZ -0.3%).
    • Those most exposed to a protracted government shutdown are smaller community banks in the D.C. area like Eagle Bancorp (EGBN -1.4%), and Cardinal FInancial (CFNL -0.2%). Capital One (COF -1.9%) - by dint of its Chevy Chase acquisition - would also feel a pinch.
    • On mREITs (REM -0.1%), the team expects Q3 book values to increase slightly, but warns its estimates are based on relatively static portfolios - "but for most names, portfolios are anything but that." With all the volatility, most mREITs may have hedged away the recent MBS rally. Starwood Property Trust (STWD) remains FBR's best idea thanks to its commercial real estate exposure.
    • Financials ETFs: XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
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  • Sep. 30, 2013, 2:02 PM
    • Headline risk and falling long-term interest rates (flattening the yield curve) are behind S&P Equity Strategy Group's downgrade of the financial sector (XLF -0.6%) to Neutral. The team's estimate of earnings growth is expected to slow to 5.6% next year from 11.4% in 2013.
    • S&P needs to take a number for its downgrade as the earnings estimate cuts are flying all over the place over the last two weeks. The big banks have made little secret that mortgage and trading slowdowns are going to deliver a big hit to Q3 earnings.
    • Other relevant ETFs: IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ, KBE, KRE.
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  • Sep. 25, 2013, 9:43 AM
    • Speaking at BAML's Banking and Insurance Conference in London, Deutsche Bank (DB -1.6%) co-CEO says the bank expects a "significant" drop in Q3 trading revenue.
    • The announcement isn't unexpected, and follows a similar warning from Citigroup over the weekend, numerous other rumblings from investor conferences this month, and Jefferies' already reported ugly (from a trading standpoint) Q3.
    • Previous: FICC trading revenue has been slipping for years and should be in analyst models by this point.
    • Banks (KRE -0.6%), (KBE -0.4%) again are leading the market decline.
    • Financials ETFs: XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
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  • Sep. 23, 2013, 10:23 AM
    | 2 Comments
  • Sep. 16, 2013, 2:18 PM
    | 6 Comments
  • Sep. 11, 2013, 7:46 AM
    | 9 Comments
  • Sep. 10, 2013, 3:38 PM
    • U.S. Bancorp (USB +1%) is among those making significant accounting changes - moving bonds from the "available-for-sale" bin into "held-to-maturity." The move gives lenders near-term capital relief, but forces them to hold onto the paper no matter what.
    • U.S. Bancorp's held-to-maturity portfolio ballooned to $34.7B or 46% of its investment portfolio in Q2, up from just $1.5B in 2010. The bank did it to cope with new capital regulations, but is now stuck with billions in low-yielding assets as rates begin to rise - the weighted-average yield on the held-to-maturity portfolio is just 1.89% compared to 2.72% in the available-for-sale portfolio.
    • Texas bank Cullen Frost (CFR +0.2%) was forced to do likewise as regulators seemed "incapable" of removing a requirement to subtract paper losses on securities from capital ratios, according to the bank finance chief. "That was absolutely ridiculous for a bank like ours," which never had any funding issues, says CIO Bill Sirakos.
    • The bottom line: The banks made their arrangements with the federales a long time ago. They're just going to have to deal with it.
    • Financial ETFs: XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ, KBE.
    | 1 Comment
  • Sep. 9, 2013, 12:23 PM
    | 2 Comments
  • Sep. 6, 2013, 12:13 PM
    • "The probability of it happening again in our lifetime is as close to zero as I could imagine," Morgan Stanley (MS +0.8%) CEO James Gorman tells Charlie Rose in what hopefully won't be added to the list of ill-timed boners from captains of industry.
    • He cites different management at financial firms, higher capital ratios, and changes int he business mix - "it's dramatic." Among Morgan Stanley's own steps is the purchase of Smith Barney from Citigroup in the hope of a steady stream of fee business.
    • "The largest financial institutions in the U.S. are as healthy now as they have ever been."
    • Financial ETFs: XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
    | 2 Comments
  • Aug. 19, 2013, 11:17 AM
    • A new round of Fed stress tests found all 18 participating banks need to improve their capital planning.
    • The 2014 CCAR process - in which banks will submit their capital return plans for Fed approval - begins this fall. In addition to last year's 18 participants will be another 12 firms with at least $50B in assets.
    • Source: Press release.
    • Full study.
    • Related ETFs: KBE, XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
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  • Aug. 16, 2013, 11:37 AM
    • The Fed approves a final rule requiring 70 financial companies to pony up $440M annually for the cost of expanded central bank supervision.
    • The Dodd-Frank act not only mandated new regulatory oversight of banks, it required the banks to pay for the expansion. The assessment applies only to those companies with more than $50B in assets.
    • Relevant ETFs: XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
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  • Jul. 2, 2013, 12:28 PM
    Banks with a heavy reliance on mortgage originations catch a break with new capital rules approved by the Fed today. The central bank decided not to increase risk-weightings for mortgages, citing new underwriting rules as well as other pending rules as the reasons. Small banks also get good news as any trust preferreds issued prior to 2010 are grandfathered in as acceptable capital.
    | 2 Comments
  • Jun. 25, 2013, 11:58 AM
    Looking for relative strength? With the S&P 500 off nearly 5% since May's end and the big-cap focused Financial Sector SPDR (XLF) down 5%, the Regional Banking ETF (KRE) is about flat as higher rates hold the promise of better margins. Within the KRE, those stocks looking the best technically to Frank Zorilla are ASBC, BBT, MTB, HBAN, HOMB, RF, ZION.
    | 4 Comments
  • Jun. 18, 2013, 3:04 PM
    Rising interest rates should be good for bank (XLF) income statements, but maybe bad for bank balance sheets, opines Fitch. Higher long rates mean wider margins which is good for earnings, but securities backing bank capital levels have large unrealized gains attached - gains which could disappear and turn into losses as rates rise. Basel III rules, of course, have yet to be finalized so the ultimate impact is not yet clear.
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  • Jun. 17, 2013, 8:26 AM
    "Higher rates without meaningful economic growth are bad for banks (XLF), says FBR's Paul Miller, making a counterpoint to last week's line of bank executives welcoming the recent increase in interest rates. KBW's Chris Mutascio is also skeptical, noting short-term rates driving loan pricing could stay flat while assets pegged to long-term yields lose value.
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  • May 31, 2013, 3:21 PM
    Large-cap banks are poised for multiple expansion, says Sterne Agee, as discussions with managements along with data points from recent investor presentations suggest business in Q2 is doing better than expectations. The team is recommending a basket of C, JPM, MS, and GS. In a similar vein, they like a basket of "discounted regionals" - PNC, MTB, RF, USB, and STI.
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PFI Description
The PowerShares DWA Financial Momentum Portfolio (Fund) is based on the DWA Financials Technical Leaders Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to identify companies that are showing relative strength (momentum), and is composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges. The Fund and the Index are rebalanced and reconstituted quarterly.
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Sector: Financial
Country: United States
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