Tag Archives: china

BlackRock Seeks To Ride The Gold ETF Rally

Sluggish growth in China since the beginning of the year, the oil market turbulence and concerns over global growth slowdown have lifted the demand for safe-haven assets like gold. The weakness in the global financial markets has helped the precious metal to recover its sheen in 2016. Gold has gained more than 16% year to date. The jump in gold prices was also supported by plunging interest rates on a global scale. With the Fed not expected to raise interest rates in the near term, the rally is expected to continue. Given the tailwinds, it’s not surprising that BlackRock (NYSE: BLK ) has chosen to increase its stake in gold. But what’s surprising is that to do so, it has opted for a competitor’s ETF, the SPDR Gold Trust ETF (NYSEARCA: GLD ), instead of its own product, the iShares Gold Trust ETF (NYSEARCA: IAU ). As per the SEC filing , BlackRock has increased its holding in GLD to 13%, worth almost $4 billion. This is a massive increase from a 5% stake disclosed in a regulatory filing last month. GLD is the largest and most popular ETF in the gold space, with AUM of $31.3 billion and average daily volume of about 8.1 million shares. The fund reflects the performance of the price of gold bullion. Its expense ratio comes in at 0.40%. The fund currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. In comparison, IAU has AUM of $7.7 billion and trades in solid volume of more than 7.5 million shares a day, on average. The ETF charges 25 bps in annual fees. Like GLD, this ETF offers exposure to the day-to-day movement of the price of gold bullion and carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. BlackRock’s gold ETF made headlines earlier this month when it had to temporarily suspend creations. As per a Reuters report, it sold $296 million in shares of the exchange-traded fund without properly registering them with the SEC. After recognizing the slip, BlackRock stopped selling new shares of the fund. Though this is not the first time an asset manager has invested in a competitor’s product and included it in the portfolio, BlackRock’s choice of increasing its holding in GLD emphasizes the craze for gold in the market. While IAU has a lower expense ratio as compared to GLD, GLD trades in much higher volumes, keeping the bid/ask spread low, and has a much larger asset base. Original Post

Oracle Beats On Earnings, Ups Buyback: Tech ETFs In Focus

After the closing bell yesterday, tech bellwether Oracle (NYSE: ORCL ) reported mixed third-quarter fiscal 2016 results. The company beat the Zacks Consensus Estimate for earnings but missed on revenues due to negative currency translations and persistent weakness in traditional software sales. Additionally, Oracle boosted its share buyback program by $10 billion (see: all the Technology ETFs here ). Oracle Q3 Earnings in Focus Earnings per share came in at 59 cents (accounting for stock-based compensation), a penny ahead of the Zacks Consensus Estimate. Revenues declined 3.4% year over year to $9.01 billion and were below our $9.17 billion estimate. While the company’s long process of shifting to the Web-based cloud computing business is paying off, it is unlikely to make up for the decline in the software business. Additionally, a strong dollar is continuously posing challenges to the company’s performance. Excluding the impact of unfavorable currency rates, revenues would have grown 1%. Cloud software platform sales climbed 57% from the year-ago quarter and accounted for 6% of the total revenue. Notably, Oracle is selling more cloud software platforms than any other company in the world, providing it an edge over the software ace Salesforce.com Inc. (NYSE: CRM ). For the fiscal fourth quarter, the world’s largest database software maker expects revenues to be down 2% to up 1% in constant currency and earnings per share between 82 cents and 85 cents. The lower end of the earnings guidance is well above the Zacks Consensus Estimate of 78 cents, reflecting some optimism in the company’s future growth. Currency headwind is expected to impact 2% growth in revenues and dilute earnings per share by a couple of cents. Impressed by solid cloud computing growth and an earnings beat, the Board of Directors of Oracle authorized additional repurchase of as much as $10 billion of stock under its existing buyback program. As per Bloomberg, it is the first expansion of the repurchase plan since September 2014 (read: Face-Off: Dividend Growth & Buyback ETF ). As a result, Oracle shares climbed as much as 5.4% in after-hours trading. Smooth trading is expected to continue in the days ahead given that the stock has a Zacks Rank #3 (Hold) and a solid Industry Rank in the top 27%, suggesting room for upside. Given this, ETFs with the highest allocation to this software giant will be in focus in the days ahead. Investors should closely monitor the movement in these funds and avoid these if the stock drags them down: iShares North American Tech-Software ETF (NYSEARCA: IGV ) This ETF provides exposure to the software segment of the broader U.S. technology space by tracking the S&P North American Technology-Software Index. The fund holds a basket of 58 securities with Oracle taking the top spot at 9.3% of total assets. It is quite popular with AUM of $639.1 million while volume is moderate as it exchanges nearly 201,000 shares a day. The product charges 48 bps in annual fees and has lost 6.3% so far this year. IGV has a Zacks ETF Rank of 1 or ‘Strong’ rating with a High risk outlook. First Trust ISE Cloud Computing Index ETF (NASDAQ: SKYY ) This fund provides exposure to cloud computing securities by tracking the ISE Cloud Computing Index. Holding about 34 stocks in the basket, Oracle takes the fifth spot at 4.2% of assets. Software firms dominate this ETF, accounting for 37.5% share while Internet software services (16.7%) and communication equipment (13.5%) round off to the next two sectors. The product has been able to manage $531.3 million in its asset base while sees good volume of about 102,000 shares a day. It has 0.60% in expense ratio and has a Zacks ETF Rank of 2 or ‘Buy’ rating with a High risk outlook. First Trust NASDAQ Technology Dividend Index ETF (NASDAQ: TDIV ) This fund provides exposure to the dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed about $482.9 million in its asset base while trades in volume of around 83,000 shares per day. The ETF charges 50 bps in annual fees. In total, the fund holds about 96 securities in its basket. Of these firms, ORCL takes the seventh position, making up roughly 4.0% of the assets. In terms of industrial exposure, the fund is widely spread out across semiconductor and semiconductor equipment, diversified telecommunication services, technology hardware, storage & peripherals, and software. The fund has added 3.2% so far this year. PureFunds ISE Big Data ETF ( BDAT ) This product targets the niche corner – the big data and analytics industry – in the broad technology space. The fund follows the ISE Big Data Index, holding 32 securities in its basket. Of these, ORCL takes the sixth spot with 4% allocation. The U.S. firms dominate the portfolio with 81% share while Germany, Israel, Canada, and China make up for a decent exposure. The fund has accumulated $1 million in its asset base so far and charges a bit higher fee of 0.75%. Average daily volume is paltry at nearly 1,000 shares and BDAT is down 13.8% in the year-to-date timeframe. Link to the original post on Zacks.com

Inside NANR: The Most Successful New ETF Of 2016

Oil price volatility has put energy sector ETFs in focus since the start of this year. After tumbling to a 13-year low in mid February, oil has made an impressive comeback surging nearly 47% over the past one-month period. Robust performance was driven by improving demand/supply trends, which are rebuilding investors lost confidence in the rebalancing of the oil market. This is especially true given signs of falling production in the U.S. and the Organization of the Petroleum Exporting Countries (OPEC), hopes of a deal by major oil producers to freeze oil output at the January level, receding fears of a recession in the U.S., and signs of stabilization in China and the other developed economies (see: all the energy ETFs here ). Additionally, oil drilling activity in the U.S. has fallen to the lowest level since at least 1940 reflecting that U.S. output will continue to decline in the coming weeks. A slew of capital spending cuts last year and another round of major cuts this year added to the strength and will continue to curb oil production and reduce global supply. All these suggest that the oil market might bottom out after two years of persistent decline. However, volatility persists given increasing production in Iran, a strong dollar and weak global economic growth. Given the uncertain backdrop for oil, investors are seeking well-balanced exposure to the basket of natural resources companies instead of just energy sector allocation. And this drive has made the new ETF – SPDR S&P North American Natural Resources ETF (NYSEARCA: NANR ) – immense popular and successful so far this year. This fund offers exposure to the natural resources companies in the energy, materials and agriculture industries. This is because it has been getting the first-mover advantage and has accumulated $817 million in AUM in just three months of debut while surging 17.2% in the same period. Average daily volume is solid as it exchanges nearly 570,000 shares in hand (read: 5 Very Successful ETF Launches of 2015 ). Given this, it might be worth it to shed some light on this ETF and its holdings for those who are unfamiliar with the product, but are thinking about jumping in on the product. Below we highlight some of the key details regarding NANR, which made it one of the fastest-growing and most-successful ETFs of this year. NANR in Focus The ETF tracks the S&P BMI North American Natural Resources Index, charging investors 35 bps in fees and expenses. Holding 61 securities in its basket, it is highly concentrated on the top two firms – Exxon Mobil (NYSE: XOM ) and Chevron (NYSE: CVX ) – with over 9% share each. Other firms hold no more than 6.15% of assets. Materials make up for half of the portfolio, closely followed by 44.3% in energy and the rest in consumer staples. The product has a certain tilt toward large cap and value stocks as about more than two-third of the portfolio falls in the large-cap category while about half of it is classified as value picks. The combination of large-cap value securities has the potential to deliver higher returns and reduce overall volatility in the portfolio. In addition, these securities tend to outperform when considered on a long-term investment horizon and are less susceptible to trending markets. As such, these provide safety and could be the perfect choice for investors concerned about oil price volatility and its negative impact on the sector. In terms of performance, NANR has gained 15.6% year to date, easily outpacing the ultra-poplar Energy Select Sector SPDR ETF (NYSEARCA: XLE ) and the Materials Select Sector SPDR ETF (NYSEARCA: XLB ) . Investors should note that both these funds have plenty of holdings similar to NANR. Despite this, XLE and XLB are up just 3.4% and 2.3%, respectively. Link to the original article on Zacks.com