Tag Archives: apple

Here’s Why Apple Should Be More Like Netflix

Loading the player… Amid slowing iPhone sales, Apple ( AAPL ) should take a page from Netflix’s ( NFLX ) playbook and go with the subscription model, according to a Bernstein report out Wednesday. With the cost of owning and using an iPhone averaging at about $3 a day, Bernstein says Apple could offer its products to customers as a bundled monthly service instead of single purchases of more than $700 every few years. The analyst believes customers could get more services from an Apple subscription bundle at a cheaper cost than their Internet and cable bills. Apple shares closed up 1.2% in above-average volume after testing support at the 10-day line in Tuesday’s session. The stock still has a lot of recovering to do after crumbling to its lowest level in nearly two years just last week, in the wake of the company’s disappointing quarterly earnings report. Apple is 28% below its all-time high reached in April 2015. Meanwhile, Netflix is looking to retake its 10-day line, an area the stock has struggled to stay above in the aftermath of its disappointing Q2 subscriber addition guidance about a month ago. Shares are trading 32% below their all-time high reached last December, but finished 2.1% higher Wednesday. Another big tech company benefiting from the subscription model is Amazon ( AMZN ). The e-commerce giant’s Amazon Prime service costs $99 dollars a year and is growing in popularity. Amazon also recently rolled out a monthly Prime membership for $10.99 a month and a video-only subscription for $8.99 a month. Amazon is looking for support at its 10-day line. The stock tried to climb back above the 700 price level in intraday trade but reversed lower by the afternoon, then ended up 0.3% at 697.45. Shares are 3% below their all-time high reached last week and extended 16% past a cup-with-handle buy point it initially cleared just a few weeks before the company’s latest quarterly report.

Catch These Poland ETFs On The Upswing

Poland’s currency zloty, bonds and stocks gained on Monday (May 16, 2016) as Moody’s reaffirmed its long-term credit rating for the country at A2. And unsurprisingly two ETFs tracking the country – the iShares MSCI Poland Capped ETF (NYSEARCA: EPOL ) and the VanEck Vectors Poland ETF (NYSEARCA: PLND ) – jumped 3.4% and 3%, respectively. Poland, one of the outperformers in the EU, has been lagging in recent months thanks to growth slowdown in the emerging markets. Eurozone troubles also continue to weigh on the country. Still, as per IMF forecasts, the country’s GDP growth rate is expected to touch 4% in 2016 as compared to 3.6% in 2015 building investors’ confidence in the country. Headwinds Remain Although Poland did not get a downgrade from Moody’s, the rating agency revised its outlook for the country to negative from stable. The agency cited several reasons for the change in outlook including fiscal risks arising from a substantial increase in current expenditures, uncertainty as to offsetting revenue measures and the government’s intention to lower the retirement age. Another factor affecting the outlook was the risk of deterioration in the investment climate thanks to unpredictable policies and legislations. The President’s office has recently presented a proposal to implement a law converting Swiss franc mortgages into zlotys. The International Monetary Fund (IMF) has criticized this proposal and stated that the country’s financial system along with credit and economic growth will stand to suffer if the country goes ahead with its plan to convert foreign-currency denominated mortgages. The IMF has also warned that the increase in government expenditure would lead to a rise in budget deficit to 2.8% in 2016. The rising budget deficit could even cross 3% in 2017, breaching the European Union’s budgetary rules. Instead, the IMF has encouraged the Polish government to follow policies that are market friendly. Despite these concerns, investors who believe that Poland is poised for a turnaround could catch the Poland-focused ETFs. Both the ETFs carry a favorable Zacks ETF Rank of 3 or ‘Hold’ rating, suggesting room for upside. EPOL in Focus EPOL has about $173.4 million in AUM and an average daily volume of 274,000 shares. The product tracks the MSCI Poland IMI 25/50, charging 63 basis points a year from investors. With 40 stocks in its basket, this fund puts as much as 46.1% of its total assets in the top five holdings, suggesting high concentration risk. Financials actually makes up roughly half of the portfolio with 44.7% exposure. Energy and materials round off the top three sectors with exposure of 17.3% and 9.6% respectively. Shares of EPOL fell roughly 5.4% in the last one-month period ended May 16, 2016. PLND in Focus The fund looks to track the VanEck Vectors Poland Index and has 26 securities in its basket, charging investors 60 basis points a year in fees. The fund has 36.4% of its total assets in the top five holdings. PLND also puts heavy focus on financials, with as much as 37.1% exposure, followed by a 14.1% allocation to energy, 12.7% coverage in utilities and 11.4% in consumer discretionary. PLND sees a paltry volume of around 13,000 daily, while the ETF lost more than 5.8% in the last 30 days. Original Post

Inside Guggenheim’s U.S. Large Cap Optimized Volatility ETF

Low volatility exchange-traded products are in vogue this year due to global growth worries. Be it in China or in several developed economies, fears of a slowdown are widespread. The U.S. earnings picture is also in shambles with a moderation in GDP growth. Oil price, though recoiled from the pit of crisis, is nowhere near full-fledged recovery (read: Low Volatility ETFs Still in Play ). With no definite clues of sustained recovery in the market, edgy investors may want to invest in safe or low volatile products. The current low volatility ETF suite is performing well and probably this is why Guggenheim recently added a new one to the low volatility investing list. The name of the product is the U.S. Large Cap Optimized Volatility ETF (NYSEARCA: OVLC ) . Let’s dig a little deeper. OVLC in Focus The fund looks to track the Guggenheim U.S. Large Cap Optimized Volatility Index, which gives exposure to the advantages of low-volatility investing while “attempting to outperform these strategies during market rallies .” In short, the fund has been launched to act as a defense for most of the time but be more ‘aggressive when the market is rewarding risk characteristics’, per the issuer. This strategy results in the fund holding a basket of 93 stocks with Apple (NASDAQ: AAPL ), AT&T (NYSE: T ) and Procter & Gamble (NYSE: PG ) as the top three holdings with a total allocation of 7.28%. Sector-wise, the fund has double digit weight in Consumer Staples (19.97%), Health Care (18.02%), Financials (13.23%), Utilities (12.76%), Information Technology (12.20%) and Consumer Discretionary (11.69%). The fund charges 30 bps in fees. The underlying index is rebalanced on a quarterly basis. How Does It Fit in the Portfolio? The fund is a good choice for investors looking to play a volatile market. As per the issuer, it uses the S&P 500 index as its selection universe and then applies a proprietary formula to compute the risk-to-reward returns for the trailing 12-month period and figure out each stock’s volatility and correlation to the other stocks in the basket. The strategy is mainly ‘risk- controlled ‘ in nature but reacts to varying market conditions. Unlike low volatility products that normally underperform in bull markets, OVLC may play an aggressive role when risk-on sentiments are prevailing. Needless to say, if the proposed model works out, this ETF can be a great choice for risk-averse investors. ETF Competition Given that the fund seeks to lower portfolio volatility, it might face competition from other low volatility products in the space. The PowerShares S&P 500 Low Volatility Portfolio ETF (NYSEARCA: SPLV ) has an asset base of $7.17 billion. The fund charges 25 basis points as fees. The iShares MSCI USA Minimum Volatility ETF (NYSEARCA: USMV ) is another fund in the space with an AUM of $12.9 billion and a fee of 15 basis points. But the real competition is likely to come from the SPDR SSgA Risk Aware ETF (NYSEARCA: RORO ) that looks to offer capital gains and competitive returns with respect to the broad U.S. equity market (read: Beyond Miners, 5 ETFs Crushing the Market to Start Q2 ). Link to the original post on Zacks.com