Tag Archives: capital-gains

Tuttle Tactical ETF Touts Combination Of Capital Gains And Yield

By DailyAlts Staff In today’s low-interest rate environment, coupon payments alone are unlikely to be enough to meet the objectives of yield-hungry investors. Income investors need a combination of yield and capital gains, going forward, and that’s exactly what the Tuttle Tactical Management Multi-Strategy Income ETF (NASDAQ: TUTI ) is designed to provide. In addition to current income, the Tuttle Tactical Management Multi-Strategy Income ETF is designed to provide tactically managed exposure to the markets. Launched jointly by ETF Issuer Solutions and Tuttle Tactical Management on June 10, the former is the ETF’s advisor and the latter is the sub-advisor. Tuttle CEO Matthew Tuttle is the fund’s portfolio manager. “The need for income investing strategies that can allocate tactically in the face of increasingly complex market conditions is clear,” said Mr. Tuttle, in a June 10 press release announcing the new ETF’s launch. “We believe that this ETF is debuting at a critical time for income-minded investors.” The Tuttle Tactical Management Multi-Strategy Income ETF will follow a rules-based investment approach using Tuttle Management’s four uncorrelated tactical models: Income Relative Momentum , which uses monthly relative strength to select one or more income ETPs; Dividend Counter-Trend , which invests in dividend-paying stocks when markets are trending lower intraday, and cash when markets are trending higher intraday; Dividend Tactical Fundamental Earnings , which invests in dividend ETPs when markets are trending higher on weekly models, while earnings are trending downward; and in cash when the reverse is true; and Dividend Absolute Momentum , which invests in dividend ETPs when markets are trending higher on weekly models, and in cash when markets are trending lower, in accordance with their relative strength. These models are based on Tuttle’s investment philosophy, which holds that markets move in recognizable short-term trends and countertrends; but that over the intermediate term, strong asset classes tend to stay strong, while weak asset classes tend to continue in weakness; and over the even-shorter term, markets are dominated by short-term disruptions and other noise. Tuttle’s models attempt to capture gains associated with these outlooks over varying time spans. “The bond market remains challenging for investors, and we know that interest rates will rise,” said Mr. Tuttle. “There is no doubt that the industry appetite for tactical solutions has picked up.” Mr. Tuttle also cited “strong interest” in his firm’s first ETF, the Tuttle Tactical U.S. Core ETF (NASDAQ: TUTT ), which debuted in February. William J. Smalley, President of ETF Issuer Solutions noted that ETF’s success in saying his firm is “very happy to have added TUTI to our listing of featured managers.” The expense ratio for the fund is 1.28%, inclusive of a 0.90% management fee. For more information, download a pdf copy of the fund’s prospectus .

5 Ways To Play Rising Rates With Hedged And Inverse ETFs

The recent U.S. labor market data yet again corroborated the sturdy U.S. economic growth. While weak wage growth has been bothering the investing world for quite some time, a better than expected average hourly earnings data finally wiped out investors’ fears. In this backdrop, most have started speculating a sooner than expected hike in the Fed interest rates, which have been at a rock-bottom level for long. Yields on 10-year Treasury notes crossed the 2% mark on February 10 for the first time after January 8, 2015. Fixed-income investing had enjoyed a great show in 2014 and so far in 2015, especially in the longer part of the yield curve. However, the prospect of rising rates and risks to capital gains of the bond holdings have left investors jittery about the safety of their portfolios and brought rate rise worries back on the table. Given the situation, many investors are definitely pulling their money out of the bond market. At a time like this when investors are extremely cautious about rising rate risks and stock market volatility, investments in U.S. bonds with significant protection against potential rising rates can be good bets. Some opportunistic investors could capitalize on this backdrop in the form of inverse ETFs too (read: Two Interest Rate Hedged ETF Launches from iShares ). iShares Interest Rate Hedged High Yield Bond ETF (NYSEARCA: HYGH ) This fund holds in its basket iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA: HYG ) while taking short positions in U.S. Treasury futures to diminish rising rate concerns. HYGH has a weighted average maturity of 4.60 years while its effective duration stays ultra-low at 0.32 years. HYGH is high yield in nature as evident from its 30-day SEC yield of 5.47%. HYGH charges 0.55% of expense ratio. The fund has added about 2% in the last five trading sessions (as of February 10, 2015) (see all the junk bond ETFs here). ProShares High Yield Interest Rate Hedged ETF (BATS: HYHG ) HYHG is another ETF, which has an interest rate hedge built into its strategy as it takes a short position in U.S. Treasury futures. Like HYGH, it also has a pretty high yield (and a modest expense ratio of just 50 basis points) of 5.9% in 30-Day SEC terms, indicating that this could be a safer bond and yield play for investors anxious about the possibility of rising rates. This $125.4 million ETF was up 1.9% in the last five trading sessions (as of February 10, 2015) (read: 5 Dividend ETFs to Buy for Income in 2015 ). ProShares Investment Grade-Interest Rate Hedged ETF (BATS: IGHG ) This investment grade fund too offers interest-hedge benefit to investors. The fund looks to track the Citi Corporate Investment Grade (Treasury Rate-Hedged) Index, which comprises long positions in USD-denominated investment grade corporate bonds issued by both U.S. & foreign domiciled companies while adopting short positions in US Treasury notes or bonds of approximate equivalent duration to the investment grade bonds. The index seeks to achieve an overall effective duration of zero. Its 30-Day SEC yield stands at 3.32% (as of February 10, 2015) while it charges 30 bps in annual fees. The fund was up 1.1% in the last five trading sessions (as of February 10, 2015). Barclays Inverse US Treasury Aggregate ETN (NASDAQ: TAPR ) The note provides investors a unique strategy to hedge against or benefit from the rising U.S. dollar interest rates by tracking the Barclays Inverse US Treasury Futures Aggregate Index. This benchmark employs a strategy, which follows the sum of the returns of the periodically rebalanced short positions in equal face values of each of the 2-year, 5-year, 10-year, long-bond and ultra-long U.S. Treasury futures contracts (read: Interest Rate Speculation: A Boon for TAPR ETF ). If the price of each Treasury futures contract increases or decreases by 1% of its face value, the value of the index would decrease or increase by 5% over the same period. The fund charges 43 bps in annual fees and trades in light volume of under 5,000 shares per day on average, ensuring additional cost in the form of a wide bid/ask spread. The fund has added about 16.6% in the last five trading sessions. iPath US Treasury 5-year Bear ETN (NASDAQ: DFVS ) The fund looks to track inverse movements in the yields from buying 5-year U.S. T-Notes. To do this, its underlying index tracks the returns of an investment in a weighted “short” position in relation to 5-year Treasury contracts. This $4.8 million ETF was up about 8.9% in the last five trading sessions. The fund charges 75 bps in fees. Bottom Line As a caveat, investors should note that these inverse products are suitable only for short-term traders as these are rebalanced on a daily basis (see: all the Inverse Bond ETFs here). Still, for ETF investors who are bearish on the bond market in the near term, any of the above products could make an interesting choice.

2015 Is A Growth Year For Technology Mutual Funds

The fourth quarter 2014 earnings season is the tale of two factors; Oil prices, and global economic shifts. The decline in oil has given the consumer more disposable income, but that income has yet to be seen positively impacting other sectors as it would be expected. Further, global economic shifts have caused the dollar to be stronger against other currencies. This is having a negative impact on international conglomerates, and most other companies that have a significant international exposure. The oil situation is the main culprit for the volatility due to the fact it impacts so many other segments of the world economy. Further, the decline in oil has given a slight rise of better performances in some other sectors due to consumers having more money in their pocket, but not as much as analysts initially thought. On the other side, the strengthening dollar is cutting into profits for international companies, causing negative revisions in 2015. But there is one segment that is showing double digit growth, but has no real dependence upon oil prices, or is adversely impacted by the stronger dollar; the Technology Sector. The Technology sector earnings growth is almost twice as much as the S&P 500 for Q4, and is expected to outperform the S&P 500 over the next three quarters after that (Q4 14 +12.4 vs. 6.4% for S&P 500, Q1 15 expected growth +6.4%, S&P 500 -2.1%, Q2 15 +3.8% vs. S&P 500 at -3.0%, Q3 15 +6.8% vs. S&P 500 at +0.6%). So with growth prospects outperforming the S&P 500 through Q3 15 it would be wise to look into the segment to see what Zack Ranked #1 Mutual Funds in the Technology sector are poised to capitalize on the expected growth levels in 2015. Using the Zacks Mutual Fund Rank, and then separating out funds with high expense ratios , and load fees we were able to identify 4 funds that are well positioned to capture the expected growth through FY 15. Technology Funds for 2015 Fidelity Select Electronics Portfolio (MUTF: FSELX ) a Zacks Rank #1 (Strong Buy) is designed to seek capital appreciation by investing at least 80% of assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers, electronic component distributors, and electronic instruments and electronic systems vendors. The fund offers dividends and capital gains twice a year in April and December. This fund allocates its capital between Large Cap Growth, Small Cap Value, and Foreign Stocks, and holds over 80% of their portfolio in the technology segment. The fund holds companies like Intel (NASDAQ: INTC ), Broadcom (NASDAQ: BRCM ), Texas Instruments (NASDAQ: TXN ), Samsung ( OTC:SSNLF ), and Qualcomm (NASDAQ: QCOM ). The current fund manager has been with the fund since 2009, and has shown solid gains for his (Stephen Barwikowski) clients. This tech fund has a very low expense ratio, 0.79, and has no front or back loaded fees. The minimal investment is $2,500. Past Performance: 1 year +38.37%, 3 year 25.89%, 5 year 16.36%. T. Rowe Price Global Technology Fund (MUTF: PRGTX ) a Zacks Rank #1 (Strong Buy) seeks long-term capital growth. The fund invests at least 80% of its net assets throughout the world in the common stocks of companies that generate a majority of their revenues from the development, advancement and use of technology. The fund’s holdings can range from small companies to blue chip firms with established track records. Dividends and capital gains, are declared annually in December. The fund allocates its capital between Large Cap Growth, Foreign stocks, and Intermediate Bonds. Further, the fund holds companies like Amazon (NASDAQ: AMZN ), Alibaba (NYSE: BABA ), Priceline.com (NASDAQ: PCLN ), and Qualcomm. This fund has a low expense ratio, 0.92, and does not have a front or back loaded fee. The minimal investment is $2,500. Past Performance: 1 year 24.0%, 3 year 27.44%, and 5 year 20.08%. T. Rowe Price Science And Technology Fund (MUTF: PRSCX ) a Zacks Rank #1 (Strong Buy) invests at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund objectives. This fund declares dividends annually in December. This fund allocates its capital between Large Cap Growth, Foreign Bonds, and Foreign Stocks. Further the fund holds companies like Amazon ( AMZN ), Altera (NASDAQ: ALTR ), Western Digital (NASDAQ: WDC ), and LinkedIn (NYSE: LNKD ). Like our other choices, this fund carries a very low expense ratio, 0.85, and is not front or back loaded. The minimal investment is $2,500. Past Performance: 1 year 12.59%, 3 year 19.79%, 5 year 14.76%. Fidelity® Select Software & Comp Portfolio (MUTF: FSCSX ) a Zacks Rank #1 (Strong Buy) seeks capital appreciation by investing at least 80% of assets in common stocks of companies principally engaged in research, design, production, or distribution of products or processes that relate to software or information-based services. The fund offers dividends and capital gains twice a year in April and December. This fund allocates its capital between Large Cap Growth stocks, Foreign Bonds, and Small Cap Growth Stocks. Further the fund holds companies like Microsoft (NASDAQ: MSFT ), Google (NASDAQ: GOOG ), Oracle (NYSE: ORCL ), Facebook (NASDAQ: FB ), and Adobe (NASDAQ: ADBE ). This fund carries a low expense ratio, 0.78, and is not front loaded but does have a back load of 0.75. The minimal investment is $2,500. Past Performance: 1 year 8.22%, 3 year 26.48%, 5 year 19.72%. Bottom Line With growth expectations outpacing the S&P 500 for the next three quarters, the Technology sector is an area to explore while many other sectors are being negatively impacted by outside economic forces. All four of these Technology Mutual Funds have large exposure to the Tech industry, and also have a portion of their position in foreign markets to hedge against the stronger dollar. A look into these 4 mutual funds may enable you to outpace the S&P 500 through most of 2015.