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6 ETFs With The Largest Exposure To Netflix

Summary 6 ETFs have more than 2% of total assets dedicated to Netflix. Some have exposure as high as 7%. Netflix plunged almost 9% on Thursday, thanks to an earnings report that missed on both revenue and subscriber growth estimates. The size of some of the ETFs listed is very small and thus may face liquidity and tradeability issues. Netflix (NASDAQ: NFLX ) made news this week when it delivered its third-quarter earnings report. The company reported disappointing revenue and subscriber growth, and as a result, the stock dropped over 8% on the day. NFLX has been a very popular momentum stock not just among individual investors, but by ETFs as well. There are 6 ETFs that currently have at least a 2% weighting in Netflix. Some are significantly higher than that, and any ETF that had a large exposure to Netflix on Thursday likely had trouble matching the broader market’s performance. Each of these ETFs is primarily technology and Internet focused, and as a result, is riskier than the average broad equity market fund. Keep in mind that these weightings can change over time, but if you’re looking for exposure to Netflix, these ETFs would be the place to start. PowerShares NASDAQ Internet Portfolio (NASDAQ: PNQI ) – 7.47% weighting While this ETF has the largest weighting of Netflix stock in its portfolio, it shouldn’t be too surprising given how concentrated this portfolio is. It has 95 positions in the portfolio, but the top 10 holdings account for 60% of the fund’s assets. In fact, NFLX is only the 5th largest holding. Despite its significant weight in Netflix, this ETF still performed comparably to the NASDAQ on Thursday. It was up 1.3% compared to the NASDAQ 1.8% gain. SPDR Morgan Stanley Technology ETF (NYSEARCA: MTK ) – 6.04% weighting In this ETF, Netflix is the top dog. With just 37 holdings, this fund is also concentrated but weightings tend to be distributed a little more evenly. This fund has the added benefit of also being one of the cheapest. Its 0.35% expense ratio falls well below the 0.59% average ETF ratio. The heavy Netflix weighting helped weigh down this ETF’s performance Thursday. It managed a gain of just 0.3% on a day when technology stocks as a whole moved broadly higher. First Trust DJ Internet Index ETF (NYSEARCA: FDN ) – 5.44% weighting Another concentrated technology ETF, this fund has nearly 60% of assets in its top 10, and Netflix is just the 3rd largest holding here. This fund is easily the largest among the ETFs on this list at nearly $3.6 billion in assets, so this fund will be the most liquid and easiest to trade. This ETF nearly matched the pace of the NASDAQ on Thursday, rising nearly 1.5%. First Trust ISE Cloud Computing Index ETF (NASDAQ: SKYY ) – 4.47% weighting As an ETF index provider, ISE is probably better known for the PureFunds ISE Cyber Security ETF (NYSEARCA: HACK ) that’s garnered over $1 billion in assets in a short period of time, but this fund is slowly gaining notoriety in its own right. This fund’s composition is fairly similar to the Dow Jones Internet Index Fund – concentrated and roughly equal weighted – but it’s significantly smaller and hasn’t performed nearly as well. This fund wasn’t hit terribly hard by its Netflix position as it still delivered a 1.5% gain on Thursday. Ark Web x.0 ETF (NYSEARCA: ARKW ) – 3.88% weighting Here’s where we start getting into the really small ETFs. This fund has just $12 million in assets and is very thinly traded. Typically, trading just a few hundred shares a day, liquidity is a significant issue, and the costs of trading may be too high. Despite the fact that ARKW is about a year old but hasn’t really caught on it still makes the list for its large position in Netflix. This is the only ETF on the list that was actually down on Thursday. Ark Innovation ETF (NYSEARCA: ARKK ) – 2.83% weighting This ETF also from the Ark Investment Management family is even smaller than the one listed above with just $8 million in assets. Pretty much everything mentioned above with the Web x.0 ETF applies here as well. This fund manages to eke out a tiny gain on Thursday based on just one 100 share trade.

5 ETFs Leading The Broad Market Rally

After the worst third-quarter performance in four years, the U.S. stock market showed an impressive comeback to start the new quarter, trumping global growth worries. This is especially true as the S&P 500 index and Dow Jones climbed 7.1% and 6.7%, respectively, in the first few days of the final quarter of 2015. The rally has been broad-based with most of the sectors moving up on subsiding volatility and none of the issues from Q3 currently overwhelming the market. In particular, the rising oil price has fueled optimism into the battered energy sector and a rebound is noticeable in the beaten-down healthcare stocks. Further, China, the major culprit of the market turmoil, is showing signs of stabilization and commodities are surging too. Moreover, the dismal job report for September and the latest Fed minutes suggest that cheap money flows will be in place for longer than expected. This seems good for the stocks as the near-zero rates have allowed the U.S. stock market to complete a spectacular six-year bull-run. If these weren’t enough, the final three months have been the strongest and extremely profitable for investors, if history is any guide. Since 1995, the S&P 500 posted an average gain of 5% , representing the best quarterly return. This is especially true as seasonality drives the stock market higher during this time period given the crucial holiday shopping season and an expected Santa Claus Rally. Though there have been winners in every corner of the space, several ETFs have easily crushed the broad market fund (NYSEARCA: SPY ) by wide margins. Below, we have highlighted five ETFs have been star performers since the start of the fourth quarter and look to offer a broad exposure across a number of sectors. PowerShares S&P 500 High Beta Portfolio (NYSEARCA: SPHB ) This fund tracks the performance of 100 stocks from the S&P 500 Index with the highest realized volatility over the past 12 months. It follows the S&P 500 High Beta Index and has amassed $78.4 million in its asset base. The ETF trades in good volume of more than 132,000 shares a day and charges 0.25% in expense ratio. The product is widely spread out across each security as none of these holds more than 1.75% of total assets. Mid-caps account for 51% of the portfolio, while large caps comprise the remaining. Small caps get just 2%. From a sector look, energy takes the top spot with one-fourth share, closely followed by information technology (18.6%), industrials (16.8%) and consumer discretionary (12.9%). SPHB had a strong run this quarter, gaining near double digits. PowerShares Russell 2000 Equal Weight Portfolio ( EQWS ) This fund provides equal-weight exposure to the small-cap segment of the broad U.S. stock market. It tracks the Russell 2000 Equal Weight Index, holding 1,928 stocks in the basket with each holding less than 0.3% of assets. The product is also widely spread across a number of sectors with industrials, information technology, energy, consumer discretionary and consumer staples taking double-digit allocation each. The ETF is often overlooked by investors as depicted by AUM of $13.5 million and average daily volume of under 1,000 shares. It charges 27 bps in fees per year from investors. The fund gained about 9.7% since the start of the fourth quarter and has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook. Guggenheim S&P SmallCap 600 Pure Value ETF (NYSEARCA: RZV ) This fund provides pure exposure to the small-cap value segment of the U.S. equity market by tracking the S&P SmallCap 600 Pure Value Index. It holds 157 stocks in its basket that are widely spread across components with none holding more than 2.0% of total assets. From a sector look, about one-fourth of the portfolio is tilted toward the top sector – industrials – while information technology, consumer discretionary, financials and energy round off the top five. The product has been able to manage $154.7 million in its asset base while trading in a paltry volume of about 14,000 shares a day on average. It charges 35 bps in fees per year from investors and added about 9.5% in the first few trading sessions of the fourth quarter. RZV currently has a Zacks ETF Rank of 3 with a High risk outlook. Direxion Value Line Mid- and Large-Cap High Dividend ETF (NYSEARCA: VLML ) This fund uses a unique strategy to provide investors exposure to the mid and large-cap stocks that are expected to pay above-average dividends. This is easily done by tracking the Value Line Mid- and Large-Cap High Dividend Yield Index, which selects stocks based on the criteria of the four-part Value Line, namely, Timeliness, Performance, Safety Ranks and the Financial Strength Rating. This approach results in a basket of 51 securities, with Archer-Daniels-Midland (NYSE: ADM ), Air Products & Chemicals (NYSE: APD ) and Avery Dennison (NYSE: AVY ) as the top three holdings. The fund is well spread across various sectors with double-digit exposure to industrials, materials, consumer discretionary, technology, financials and energy. It was introduced to the space in March and has accumulated about $4.8 million in AUM. Volume is paltry at about 300 shares a day while expense ratio came in a bit higher at 0.38%, suggesting an extra hidden cost for this fund. VLML is up 9.3% so far this quarter. First Trust Mid Cap Value AlphaDEX Fund (NYSEARCA: FNK ) This product offers exposure to the mid cap value sector of the U.S. equity market and employs the AlphaDEX stock selection methodology to select stocks from the S&P MidCap 400 Value Index. Holding 183 stocks in its basket, the fund provides a nice balance across each sector and securities, preventing heavy concentration. Industrials make up for the top sector at roughly 17.2% share while none of the securities hold more than 1.20% share in the basket. The ETF is relatively unpopular and illiquid in the mid cap space with AUM of $70.4 million and average daily volume of 13,000 shares. It charges a higher 73 bps in annual fees and has gained 8.8% in the same time frame. It has a Zacks ETF Rank of 3 with a Medium risk outlook. Bottom Line Investors should definitely look at these ETFs as these could continue their strong performances heading into the fourth quarter and lead the broad market rally. Original post .

Reaves Utility Income Fund: What To Make Of The Rights Offering

Reaves Utility Income Fund intends to do a rights offering. Forget about the minutia of the actual offering. Think – instead – about the reason for the offering. Reaves Utility Income Fund (NYSEMKT: UTG ) is one of my favorite closed-end funds, or CEFs, for those seeking utility exposure and dividend income. Its dividend history is nothing short of impressive and it has historically been a solid performer on a total return basis. That said, what should you make of the recent announcement of a rights offering? Impressive record One of the most notable aspects of UTG is its monthly distribution. Since the CEF first initiated a distribution in 2004, it has been increased eight times, most recently in December of last year. The distribution has never been cut, despite the fund living through the deep 2007 to 2009 recession. And, perhaps more impressive, the distribution has never included return of capital. Although the 6% or so distribution yield won’t excite those looking for 10% yields, it’s high enough to be meaningful and yet low enough to be sustainable. History has, so far, proven that out. Performance, meanwhile, is solid. The fund’s trailing 10-year return through September is an annualized 9% or so. That’s notably above Vanguard Utility ETF’s (NYSEARCA: VPU ) 6.6% annualized gain. Both numbers assume the reinvestment of distributions. To be fair, UTG’s mandate is broader than VPU’s, allowing it to invest in areas like oil, but the comparison provides at least a reasonable benchmark. That said, the more recent performance has been, well, not as good. UTG was down roughly 10% through September while VPU was down just 6.6% or so. It has been a bad year for utilities as well as some of the other areas in which UTG invests, so this doesn’t look like it’s an issue of management losing its way. Still, it’s not a good thing to see the value of an investment you own fall 10%. So why is UTG raising cash? Which might lead some investors to wonder why UTG recently announced a rights offering . Shareholders can get one right for every UTG share and buy a new share for every three rights they own. On the surface, this could look like a risky proposition since the fund is doing relatively poorly this year. If you are really cynical you might even suggest it’s a way to cover up a shortfall on the dividend front by spitting out the new cash as return of capital distributions. But step back and think bigger picture. Yes, UTG is doing poorly this year performance wise. Which, in turn, means its holdings aren’t doing so well, since UTG is nothing more than a pooled investment vehicle. If management believes this is an opportunity to buy good companies at depressed prices, its only option is to sell other holdings or raise more cash. But it can’t do that easily because it’s a closed-end fund. Thus, it has to go with a rights offering. In fact, the last time UTG did a rights offering was in 2012 . That was a relatively weak year for the fund, with a total return of around 5.8% compared to 2011’s over 14% gain (which was down from 2010’s 27% gain). In the CEF’s 2012 annual report it explained : “In August the Fund raised $144 million from a transferable rights offering. We view the rights transaction as a long‐term positive outcome for the Fund and its investors. The offering proceeds were invested principally in proven, current holdings of utility equities, increasing their portfolio weighting from just over 41% to 53%. The new investments enhanced the Fund’s current and potential future dividend yield. The outlook, after the offering, for Fund returns over the long term, gave us the confidence to announce in September the sixth increase in the monthly dividend rate since the Fund’s inception in 2004.” Essentially, the fund used the cash raised from the rights offering to buy more companies it knew well and believed were undervalued. It isn’t a stretch to think management is looking to do essentially the same thing this time around, too. If you are a Reaves shareholder this is probably a good deal for you. Will it be a good deal in the next six months? Maybe, maybe not. But longer term the CEF appears to be of the opinion that now is a good time to put money to work. And that should work out for you if you plan to stick around for some time.