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ETFs In Focus With Continued Emerging Market Asset Outflow

Emerging markets have been struggling for quite some time now. China’s economic problems are at the heart of the emerging markets’ woes. This along with weak emerging market currencies, a strong U.S. dollar and falling oil prices have resulted in a massive sell-off in emerging market stocks for quite some time now. Last week was particularly disastrous for emerging market ETFs as outflows from these funds were approximately $1.17 billion, according to data put together by Bloomberg . Last week’s outflow along with outflow of $2.12 billion in the week before that brings total outflow till January third week to $3.9 billion. Outflows of this magnitude have not been witnessed since August 2015. As per etf.com, iShares MSCI Emerging Markets (NYSEARCA: EEM ) alone recorded net outflows of approximately $1.4 billion in the week ended January 22. According to Bloomberg, China and Hong Kong witnessed the biggest outflow, primarily from stock funds. Withdrawal from China and Hong Kong funds reached $328.1 million last week, compared with redemptions of $146.8 million in the previous week. After a series of downbeat data flows from China, investors are now skeptical of the country’s ability to deliver above-par growth numbers. Meanwhile, the recent currency devaluation has not helped its case. While it can be argued that a weaker currency may help strengthen China’s sagging economy given its high exports, the popularity of dollar-denominated debt among domestic companies in China will make it more expensive to service the obligations. These factors are encouraging investors to flee from China in order to avoid further losses. Taiwan experienced the second biggest outflow, all from stock funds. Investors pulled back $185.1 million from this country’s ETFs last week, piling upon the $302.8 million witnessed in the previous week. As the Taiwanese economy thrives on exports, investors could be exiting the market on fears of it losing out to China on currency competitiveness. Below we highlight three broader emerging market ETFs that have considerable exposure in China and Taiwan. These ETFs are expected to remain in focus if outflows from emerging markets continue in the coming days. BLDRS Emerging Markets 50 ADR ETF (NASDAQ: ADRE ) – 43% weight in China This ETF tracks the BNY Emerging Markets 50 ADR Index, which is capitalization-weighted and comprises approximately 50 emerging market-based depositary receipts. The fund has the highest exposure to China (43%), followed by Taiwan (14.5%). It has amassed roughly $108.6 million in its asset base while it trades in a volume of roughly 15,459 shares a day. It charges 30 bps in fees from investors per year and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. SPDR S&P Emerging Asia Pacific ETF (NYSEARCA: GMF ) – 44.5% weight in China This ETF follows the S&P Asia Pacific Emerging BMI Index and offers exposure to the emerging economies of the region. It is a large cap centric fund, with the top two sectors – financials and information technology – collectively accounting for more than half of the portfolio. From a country look, the Chinese firms dominate the portfolio at 44.5%, followed by Taiwan (20.4%) and India (18.3%). The ETF has amassed $347.4 million in its asset base with average daily volume of 86,146. It charges 49 bps in annual fees. The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. SPDR S&P Emerging Markets Dividend ETF (NYSEARCA: EDIV ) – 29% weight in Taiwan This ETF provides exposure to the stocks from emerging market countries that offer high dividend yields by tracking the S&P Emerging Markets Dividend Opportunities Index. Taiwan accounts for 29% of the portfolio while South Africa and Brazil round off the next two countries with double-digit allocation each. It has accumulated $204.7 million in its assets base and trades in average daily volume of roughly 123,646 shares. It charges 49 bps in fees per year and carries a Zacks Rank #3 with a Medium risk outlook. Original Post

Buy-Ranked Large Cap Value ETFs In Focus

The start of 2016 was extremely rocky for the broader stock market, especially given the persistent slowdown in China and the collapse in oil prices. Subsequently, weak corporate earnings, a strong dollar, sluggishness in other emerging markets, uncertain timing of the next interest rate hike, and a spate of negative U.S. economic data added to the long list of woes. In particular, the global headwinds have started to hurt the U.S. economy as GDP for the fourth quarter grew at a slower pace of 0.7% after having advanced 2% in the third quarter and 3.9% in the second. With this, the rate of economic expansion in 2015 is same as that of 2.4% in 2014. While strong job growth, an improving housing market, and bumper auto sales continued to fuel growth in the economy throughout the year, falling oil prices and a strong dollar hurt consumer and business spending. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew 2.2%, down from 3% recorded in the third quarter while business spending contracted 2.5% after rising 9.9% in the third quarter. Moreover, the International Monetary Fund (IMF) recently warned that the global economy is on the verge of another financial meltdown and subsequently slashed the global growth forecast for the third time in less than a year. The agency now expects the global economy to grow 3.4% this year and 3.6% in the next, both down 0.2% from the previous estimates. Earlier this year, the World Bank also cut its growth forecast for the global economy to 2.9% for this year from its previous projection of 3.3%, citing that the slowdown in China, which is one of the big emerging market countries, and a worse-than-expected slowdown in Brazil and Russia have worsened the already bleak global economic outlook. Amid these headwinds and uncertainties, investors should focus on large cap stocks, which tend to be the most stable in an adverse economic scenario, while at the same time offering capital appreciation in a booming market. Further, honing in on value securities in this capitalization level ensures safety to investors. Value investing includes stocks with strong fundamentals – earnings, dividends, book value and cash flow – that trade below their intrinsic value and are undervalued by the market. Why Value Investing Is A Better Play Value stocks often overreact to both positive and negative news, resulting in share price movement that does not reflect the company’s true long-term fundamentals. This creates buying opportunities in such stocks at depressed prices and shows potential for capital appreciation when the stock finally reflects its true market price. As a result, value stocks have the potential to deliver higher returns and exhibit lower volatility compared to growth and blend counterparts. In fact, these stocks outperform the growth ones across all asset classes when considered on a long-term investment horizon, and are less susceptible to trending markets. Given this, investors may want to consider a nice large cap value play in the current volatile market environment. While looking at individual companies is certainly an option, a look at the top-ranked ETFs in this space could be a less risky way to tap into the same broad trends. Top-Ranked Large Cap Value ETF in Focus We have found a number of ETFs with a Zacks ETF Rank of 2 (Buy) in the large cap value space expected to outperform in the months to come (see all the Top-Ranked ETFs here ). While all these top-ranked ETFs are likely to outperform, the following five funds could be good choices to play the space. These products have potentially superior weighting methodologies, which could allow them to lead the large cap value space in the coming months. Vanguard Value ETF (NYSEARCA: VTV ) This fund seeks to track the CRSP US Large Cap Value Index, which measures the performance of the largest U.S. value stocks. With AUM of $17.6 billion and an expense ratio of 0.09%, VTV is one of the cheapest funds in this space. Volume is also solid exchanging around 1.7 million shares per day, on average. The product holds 328 stocks, which are well spread across each component, as none of these holds more than 4.3% share. Here again, financials takes the top spot with one-fourth share, while healthcare, industrials, consumer goods and technology round off to the next four spots with a double-digit allocation each. The ETF has shed 4.9% in the year to date time period. Vanguard Mega Cap Value ETF (NYSEARCA: MGV ) This ETF provides exposure to 160 stocks by tracking the CRSP US Mega Cap Value Index. It is pretty well spread out across components, as none of the firms holds more than 5% of assets. From a sector look, about one-fourth of the portfolio is dominated by financials, while healthcare, information technology, industrials and energy round off the top five with double-digit allocation each. MGV has AUM of $1 billion and average daily volume of 62,000 shares. It charges 9 bps in annual fees from investors and has lost 4.6% so far this year. Schwab U.S. Large-Cap Value ETF (NYSEARCA: SCHV ) This fund tracks the Dow Jones U.S. Large Cap Total Stock Market Index, holding 342 stocks in its basket. None of the securities accounts for more than 4.6% of total assets. Additionally, the product is well spread out across sectors, with financials, consumer staples, information technology, and healthcare accounting for double-digit exposure each. SCHV has amassed assets worth $1.7 billion and trades with volume of around 268,000 shares a day, on average. It charges a low expense ratio of 0.07% and is down 4.1% so far this year. PowerShares Dynamic Large Cap Value Portfolio ETF (NYSEARCA: PWV ) This fund tracks the Dynamic Large Cap Value Intellidex Index, which seeks to provide capital appreciation while maintaining value exposure. The index applies a 10-factor style isolation process and then evaluates stocks on price momentum, earnings momentum, quality and management action. This approach results in a basket of 50 securities, each holding less than 4% of total assets. About one-fourth of the portfolio is allotted to financials, followed by 15.3% to information technology, 12.5% to consumer staples and 10.5% to energy. The fund has amassed $912.4 million in its asset base, while it sees solid volume of 143,000 shares a day, on average. It charges 57 bps in fees per year and has lost 3.7% this year (see all the Large Cap Value ETFs here ). iShares Morningstar Large-Cap Value ETF (NYSEARCA: JKF ) With AUM of $280.5 million, this product tracks the Morningstar Large Value Index. Holding 84 securities, the fund is moderately concentrated on the top firms, with none holding more than 6.51% of assets. From a sector look, financials, energy, consumer staples, and industrials are the top sectors with double-digit exposure each. The ETF charges 25 bps in annual fees and trades in light volume of nearly 16,000 shares a day. It has shed 3.8% in the year to date time frame. Bottom Line Value stocks generally outperform during periods of muted market performance, which we are seeing currently. Investors are taking flight to safety given global slowdown concerns and geopolitical tensions. Therefore, the above-mentioned products have lost less that the broad U.S. market fund (NYSEARCA: SPY ) and the growth fund (NASDAQ: QQQ ). As such, investors shouldn’t forget the value space and should take a closer look at a few of the attractive value ETFs in this segment for excellent exposure and some outperformance in the months ahead. Original Post

Complete List Of 101 ETP Closures In 2015

A total of 101 U.S.-listed exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) had their listings removed in 2015, one shy of the record 102 closures in 2012. Of the 2,405 U.S. exchange-traded products (“ETPs”) launched since 1993, when the industry began, only 1,845 remain, making the lifetime death toll 560 (475 ETFs and 85 ETNs). This puts the historical mortality rate at 23.3%, up from 21.6% a year ago. It’s getting tougher to survive out there. Click to enlarge A significant, but uncelebrated, milestone was achieved in 2015: the lifetime death toll reached 500 . Broken down by major categories, the 101 closures of 2015 consisted of 11 sector, 14 style and strategy, 21 global and international, 12 bond, 10 inverse, 17 leveraged and inverse, 12 commodity, and four currency products. Slicing another direction reveals 79 of the closures were ETFs and 22 were ETNs. Nine of the shuttered ETFs were actively managed funds. Percentage-wise, ETN closures were more significant. During 2015, there were only a dozen launches, and ETNs declined from 211 to 201. This is the largest-ever annual decline of ETNs, and the number of active listings remains well below the peak of 218 established in mid-2012. Closures affected 20 brands and sponsors. Three firms completely exited the business by closing their entire product lines. The Royal Bank of Scotland (NYSE: RBS ) closed all 13 of its ETNs, Russell closed its one remaining ETF after shutting down the other 25 back in 2012 , and Source closed its one and only U.S.-listed ETF. As an ETF sponsor, Source lasted less than seven months in the U.S. market and now holds the record for the shortest sponsor lifespan. Sponsors and brands with the highest closure quantities for the year included BlackRock iShares (19), ProShares (19), RBS ETNs (13), Deutsche X-trackers (7), Invesco PowerShares (6), and AdvisorShares (6). Assets in these closed products averaged $25.4 million, for a total of $2.57 billion. However, a large portion can be attributed to the three target-maturity ETFs with their planned maturity and liquidation dates. These were the Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (NYSEARCA: BSJF ) at $469 million, the Guggenheim BulletShares 2015 Corporate Bond ETF (NYSEARCA: BSCF ) at $363 million, and the iShares iBonds Sep 2015 AMT-Free Muni Bond ETF (NYSEARCA: IBMD ) at $89 million. Strategic closures also had an impact on the numbers. The decision by RBS to exit the business left $827 million on the table, including $488 million in the RBS U.S. Large Cap Trendpilot ETN (NYSEARCA: TRND ) and $144 million in the RBS US Mid Cap Trendpilot ETN (NYSEARCA: TRNM ). Deutsche Bank (NYSE: DB ) bet the farm on currency hedging and closed most of its non-hedged products, including two with assets of more than $40 million each. The Invesco-DB partnership appeared to come to an end when all of the PowerShares ETNs issued by DB were closed and liquidated. With the exception of out-of-the-blue strategic closure decisions, ETF Deathwatch continues to do a good job of identifying the zombie ETFs and warning investors of potential fund closures. Of the 101 liquidated products, 79 were on ETF Deathwatch when their terminations were announced. Excluding the strategic decisions mentioned above, just nine of the closures were not on ETF Deathwatch. Many of those had assets above $25 million, which suggests the current criteria may not be strict enough. Ages of the liquidated products ranged from less than seven months for the Source EUROSTOX 50 ETF (NYSEARCA: ESTX ) to 7.9 years for a dozen of the ProShares ETFs. In all, 21 of the products were more than seven years old, suggesting that sponsors had been willing to subsidize these funds for many years before giving up hope of them ever becoming profitable. Given the increasingly competitive landscape, it’s not clear sponsors will exhibit such patience going forward. The interactive table below is currently sorted by product name. ETF and ETN Closures of 2015 # Ticker Name Last Day Deathwatch Notes 1 AGLS AdvisorShares Accuvest Global Long Short ETF 08/07/2015 Yes 1 2 ACCU AdvisorShares Accuvest Global Opportunities ETF 01/09/2015 1 3 HDGI AdvisorShares Athena International Bear ETF 01/09/2015 Yes 1 4 GGBP AdvisorShares Gartman Gold/British Pound ETF 01/26/2015 Yes 1 5 GLDE AdvisorShares International Gold ETF 01/26/2015 Yes 1 6 DBIZ AdvisorShares Pring Turner Business Cycle ETF 10/02/2015 Yes 1 7 CSMB CS X-Links 2x Monthly Merger Arbitrage Liquid Index ETN 07/02/2015 Yes 8 CSMN CS X-Links HOLT Market Neutral Global Equity ETN 07/02/2015 Yes 9 TDD Deutsche X-trackers 2010 Target Date ETF 05/18/2015 Yes 10 TDH Deutsche X-trackers 2020 Target Date ETF 05/18/2015 11 TDN Deutsche X-trackers 2030 Target Date ETF 05/18/2015 12 TDV Deutsche X-trackers 2040 Target Date ETF 05/18/2015 13 TDX Deutsche X-trackers In-Target Date 05/18/2015 Yes 14 UTLT Deutsche X-trackers Regulated Utilities 09/09/2015 Yes 15 SUBD Deutsche X-trackers Solactive Investment Grade Subordinated Debt 09/09/2015 Yes 16 SYTL Direxion Daily 7-10 Year Treasury Bull 2x 10/20/2015 Yes 17 MATL Direxion Daily Basic Materials Bull 3x 10/20/2015 Yes 18 BAR Direxion Daily Gold Bull 3x 06/19/2015 Yes 19 MDLL Direxion Daily Mid Cap Bull 2x 10/20/2015 Yes 20 BCHP EGShares Blue Chip 10/30/2015 Yes 21 BRXX EGShares Brazil Infrastructure 10/30/2015 Yes 22 AGOL ETFS Physical Asian Gold Shares 08/12/2015 23 BRAF Global X Brazil Financials 10/08/2015 Yes 24 AZIA Global X Central Asia & Mongolia Index 10/08/2015 Yes 25 GURX Global X Guru Small Cap Index 10/08/2015 Yes 26 JUNR Global X Junior Miners 10/08/2015 Yes 27 BSCF Guggenheim BulletShares 2015 Corp Bond 12/30/2015 2 28 BSJF Guggenheim BulletShares 2015 HY Corp Bond 12/30/2015 2 29 HFIN Horizons S&P Financial Sel Sec Covered Call 03/20/2015 Yes 30 IFAS iShares Asia Developed Real Estate 08/21/2015 Yes 31 MONY iShares Financials Bond 08/21/2015 Yes 32 FCHI iShares FTSE China 08/21/2015 33 IBMD iShares iBonds Sep 2015 AMT-Free Muni Bond 09/01/2015 2 34 ENGN iShares Industrials Bond 08/21/2015 Yes 35 AAIT iShares MSCI All Country Asia Info Tech 08/21/2015 Yes 36 AXJS iShares MSCI All Country Asia x-Japan SmallCap 08/21/2015 Yes 37 EWAS iShares MSCI Australia Small-Cap 08/21/2015 Yes 38 EWCS iShares MSCI Canada Small-Cap 08/21/2015 Yes 39 EMDI iShares MSCI Emerging Markets Cons Discretionary 08/21/2015 Yes 40 ESR iShares MSCI Emerging Markets Eastern Europe 08/21/2015 41 EEME iShares MSCI Emerging Markets EMEA 08/21/2015 Yes 42 EMEY iShares MSCI Emerging Markets Energy Sector 08/21/2015 Yes 43 EGRW iShares MSCI Emerging Markets Growth 08/21/2015 Yes 44 EVAL iShares MSCI Emerging Markets Value 08/21/2015 45 EWHS iShares MSCI Hong Kong Small-Cap 08/21/2015 46 EWSS iShares MSCI Singapore Small-Cap 08/21/2015 Yes 47 IFNA iShares North America Real Estate 08/21/2015 48 AMPS iShares Utilities Bond 08/21/2015 49 QEM Market Vectors MSCI Emerging Markets Quality 09/18/2015 Yes 50 QDEM Market Vectors MSCI Emerging Markets Quality Dividend 09/18/2015 Yes 51 QXUS Market Vectors MSCI International Quality 09/18/2015 Yes 52 QDXU Market Vectors MSCI International Quality Dividend 09/18/2015 Yes 53 BARL Morgan Stanley S&P 500 Crude Oil ETN 01/29/2015 Yes 54 FIVZ PIMCO 3-7 Year U.S. Treasury Index 09/23/2015 Yes 55 TENZ PIMCO 7-15 Year U.S. Treasury Index 09/23/2015 56 FORX PIMCO Foreign Currency Strategy Active 09/23/2015 Yes 1 57 ITLT PowerShares DB 3x Italian T-Bond Futures ETN 02/24/2015 58 UUPT PowerShares DB 3x Long USD Idx Futures ETN 02/24/2015 59 UDNT PowerShares DB 3x Short USD Idx Futures ETN 02/24/2015 Yes 60 ITLY PowerShares DB Italian T-Bond Futures ETN 02/24/2015 Yes 61 DEFL PowerShares DB US Deflation ETN 02/24/2015 Yes 62 INFL PowerShares DB US Inflation ETN 02/24/2015 Yes 63 FINF ProShares Short 30 Year TIPS/TSY Spread 01/08/2015 Yes 64 GDAY ProShares Ultra Australian Dollar 06/18/2015 Yes 65 UKW ProShares Ultra Russell Midcap Growth 01/08/2015 Yes 66 UVU ProShares Ultra Russell Midcap Value 01/08/2015 Yes 67 UKF ProShares Ultra Russell1000 Growth 01/08/2015 Yes 68 UVG ProShares Ultra Russell1000 Value 01/08/2015 Yes 69 UKK ProShares Ultra Russell2000 Growth 01/08/2015 Yes 70 UVT ProShares Ultra Russell2000 Value 01/08/2015 Yes 71 UWC ProShares Ultra Russell3000 01/08/2015 Yes 72 UINF ProShares UltraPro 10 Year TIPS/TSY Spread 01/08/2015 Yes 73 SINF ProShares UltraPro Short 10yr TIPS/TSY Sprd 01/08/2015 Yes 74 SDK ProShares UltraShort Russell Midcap Growth 01/08/2015 Yes 75 SJL ProShares UltraShort Russell Midcap Value 01/08/2015 Yes 76 SFK ProShares UltraShort Russell1000 Growth 01/08/2015 Yes 77 SJF ProShares UltraShort Russell1000 Value 01/08/2015 Yes 78 SKK ProShares UltraShort Russell2000 Growth 01/08/2015 Yes 79 SJH ProShares UltraShort Russell2000 Value 01/08/2015 Yes 80 TWQ ProShares UltraShort Russell3000 01/08/2015 Yes 81 TLL ProShares UltraShort Telecommunications 09/14/2015 Yes 82 TCHI RBS China Trendpilot ETN 07/06/2015 Yes 83 DRGS RBS Global Big Pharma ETN 07/06/2015 Yes 84 TBAR RBS Gold Trendpilot ETN 07/06/2015 85 TNDQ RBS NASDAQ 100 Trendpilot ETN 07/06/2015 86 TWTI RBS Oil Trendpilot ETN 07/06/2015 Yes 87 RGRA RBS Rogers Enhanced Agriculture ETN 07/06/2015 Yes 88 RGRC RBS Rogers Enhanced Commodity Index ETN 07/06/2015 Yes 89 RGRE RBS Rogers Enhanced Energy ETN 07/06/2015 Yes 90 RGRI RBS Rogers Enhanced Industrial Metals ETN 07/06/2015 Yes 91 RGRP RBS Rogers Enhanced Precious Metals ETN 07/06/2015 Yes 92 ALTL RBS US Large Cap Alternator ETN 07/06/2015 Yes 93 TRND RBS US Large Cap Trendpilot ETN 07/06/2015 94 TRNM RBS US Mid Cap Trendpilot ETN 07/06/2015 95 ONEF Russell Equity 01/26/2015 Yes 1 96 ESTX Source EURO STOXX 50 04/10/2015 97 VRD SPDR Nuveen S&P VRDO Municipal Bond 03/18/2015 Yes 98 KME SPDR S&P Mortgage Finance 03/18/2015 Yes 99 GMFS SPDR S&P Small Cap Emerging Asia Pacific 03/18/2015 Yes 100 USMI United States Metals 03/18/2015 Yes 101 EU WisdomTree Euro Debt 02/11/2015 Yes 1 Showing 1 to 101 of 101 entries Notes : 1) actively managed, 2) reached planned maturity. All exchange traded notes are identified with “ETN” as part of their name description.