Tag Archives: mutual funds

Van Eck Partners With Merk On Deliverable Gold ETF

By DailyAlts Staff The Van Eck family of funds is well-known for its popular Market Vectors Gold Miners ETF (NYSEARCA: GDX ) and Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ ) exchange-traded funds. Its mutual fund, the Van Eck International Investors Gold Fund (MUTF: INIVX ), rounded out Van Eck’s precious-metals offerings – until recently. On October 26, the firm announced it had begun to act as the marketing agent for the Merk Gold Trust, now known as the Van Eck Merk Gold ETF (NYSEARCA: OUNZ ). Physical Delivery of Gold Despite the name-change, the fund is keeping its “OUNZ” ticker symbol, which is also how investors commonly refer to it. OUNZ was originally launched by Merk President and CIO Axel Merk and his team, who sought to give investors a liquid and cost-efficient way to buy and hold gold, while also giving them the option of taking physical delivery , if and when desired. To date, OUNZ is the only gold ETF that provides this option – and it’s patented. “Through OUNZ, investors may buy gold with the ease of an ETF, but also have the option to take delivery of their gold when they want, where they want, in the form they want,” said Van Eck CEO Jan van Eck, in a recent statement. “We’re pleased to be teaming up with Merk Investments to offer the fund to more investors.” Natural Partnership Van Eck has a long history of gold investing. GDX was the first gold-mining ETF on the market, and before that, the Van Eck International Investors Gold Fund was the first gold mutual fund. These distinctions made Van Eck a “natural partner” for Merk, according to Mr. Merk. “Van Eck’s long and storied history in gold investing makes them a natural partner for us as we continue to educate investors about OUNZ and the role that physical gold exposure can play in a portfolio,” he said. “Our unique approach to providing investors with the opportunity to redeem their shares for physical gold coupled with Van Eck’s deep knowledge base, marketing acumen and outstanding reputation make this a very exciting partnership.” OUNZ originally launched in May 2014 . Through October 27, 2015, the ETF had lost 10.4% since its inception. The SPDR Gold Trust ETF (NYSEARCA: GLD ) – which also tracks the price of physical gold – lost 10.3% over the same period. Past performance does not necessarily predict future results.

New Buy-Write Mutual Fund Aims To Outperform BXM Index

By DailyAlts Staff The CBOE S&P 500 Buy-Write Index (“BXM”) is a benchmark designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. So-called “buy-write” strategies involve buying a stock or portfolio of stocks (in the case of the BXM, it is the S&P 500 Index itself), and “writing” (or selling) call options on those securities. The objective of BXM and all buy-write strategies is to generate attractive risk-adjusted returns with lower volatility and less tail risk than long-only equity investments by generating income from the sale of call options. This isn’t a free trade however, as the seller of a call option caps the upside of the underling equity investment. Thus, when the underlying equity portfolio is experiencing strong returns, the buy-write portfolio can lag. This has certainly been the case over the past five years when the S&P 500 Index has had a strong run: (click to enlarge) Source: CBOE. Data as of November 6, 2015. However, when equity market returns are flat to slightly positive, or even negative, buy-write strategies can perform well, as we have seen this year on a year-to-date basis: (click to enlarge) With the outlook for equity market returns being relatively subdued, now may be a good time to consider a hedged equity strategy, such as a buy-write fund. Actively Manged Buy-Write Strategies While the BXM is a passively invested index, many buy-write funds take a more active approach (see Options Based Funds Outperform with Lower Volatility for more details on this category of funds). Thus, for investors interested in buy-write strategies with the potential to outperform BXM and possibly the S&P 500 Index, an actively managed fund is the right choice. And the good news is that one new fund is now available: the IRON Equity Premium Income Fund (MUTF: CALIX ). The IRON Equity Premium Income Fund’s objective is to provide risk-adjusted returns that best those of BXM. While BXM provides passive investment exposure, the IRON Equity Premium Income Fund utilizes an actively managed options overlay strategy. It is IRON’s belief that buy-write returns can be enhanced by “opportunistically writing” and actively managing options on underlying securities, rather than “unnecessarily writing options” and thus capping performance during bull markets, as passive strategies might. One of the greatest risk to buy-write strategies is that underlying stocks are “called” away during periods of greater-than-expected capital appreciation, thus limiting upside participation. Multiple Strategies to Add Value In addition to using a systematic approach to select options with appropriate expiration dates and lower odds of being exercised, IRON also utilizes proprietary “roll strategies” as part of its ongoing, active management of the fund’s options portfolio. Much of the fund’s performance depends on the performance of its underlying securities – the securities it holds and on which it writes calls – since the fund doesn’t overwrite or use leverage to sell more options than it could cover in the event of the options being exercised. Shares of the IRON Equity Premium Income Fund are available in A ( CALIX ) and I (MUTF: CALLX ) shares, with respective net-expense ratios of 1.45% and 1.10%. Both share classes require minimum initial investments of $10,000, and minimum subsequent investments of $1,000.

Best And Worst Q4’15: All Cap Blend ETFs, Mutual Funds And Key Holdings

Summary The All Cap Blend style ranks third in Q4’15. Based on an aggregation of ratings of 60 ETFs and 585 mutual funds. QDEF is our top-rated All Cap Blend style ETF and RMUIX is our top-rated All Cap Blend style mutual fund. The All Cap Blend style ranks third out of the twelve fund styles as detailed in our Q4’15 Style Ratings for ETFs and Mutual Funds report. Last quarter , the All Cap Blend style ranked third as well. It gets our Neutral rating, which is based on an aggregation of ratings of 60 ETFs and 585 mutual funds in the All Cap Blend style. See a recap of our Q3’15 Style Ratings here. Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all All Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 8 to 3796). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the All Cap Blend style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 (click to enlarge) * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Seven ETFs are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 (click to enlarge) * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Jensen Quality Value Fund ( JNVIX and JNVSX ) is excluded from Figure 2 because its total net assets are below $100 million and do not meet our liquidity minimums. The FlexShares Quality Dividend Defensive Index ETF (NYSEARCA: QDEF ) is the top-rated All Cap Blend ETF and the Royce Special Equity Multi-Cap Fund (MUTF: RMUIX ) is the top-rated All Cap Blend mutual fund. Both earn a Very Attractive rating. The State Street SPDR SSgA Risk Aware ETF (NYSEARCA: RORO ) is the worst-rated All Cap Blend ETF and the Chou Opportunity Fund (MUTF: CHOEX ) is the worst-rated All Cap Blend mutual fund. RORO earns our Dangerous rating and CHOEX earns our Very Dangerous rating. Cisco Systems (NASDAQ: CSCO ) is one of our favorite stocks held by RMUIX and earns our Very Attractive rating. Since 2005, Cisco has grown after-tax profits ( NOPAT ) by 7% compounded annually. Over this same timeframe, Cisco has consistently earned a return on invested capital ( ROIC ) above 14% and currently earns a top quintile ROIC of 16%. Despite the strong fundamentals, CSCO shares are up only 1% year-to-date. At its current price of $28/share, Cisco has a price-to-economic book value ratio ( PEBV ) of 0.8. This ratio implies that the market expects Cisco’s NOPAT to permanently decline by 20%. This expectation seems unlikely considering the steady profit growth throughout the company’s history. If Cisco can grow NOPAT by 5% compounded annually for the next five years , the stock is worth $38/share today – a 36% upside. Sears Holding Corps (NASDAQ: SHLD ) is one of our least favorite stocks held by CHOEX and earns our Dangerous rating. Since 2011, Sear’s NOPAT has fallen from $668 million to -$1.1 billion in 2015. The company’s ROIC followed suit as it fell from 3% to a bottom quintile -7% over the same timeframe. While many investors may be aware of the problems that caused SHLD to fall over 50% in the past two years, they may not realize just how high the expectations baked into the current stock price remain. To justify its current price of $24/share, Sears must immediately achieve 3% pre-tax margins (a level last seen in 2008) and grow revenue by 4% compounded annually for the next 11 years . This expectation seems awfully optimistic given that Sears hasn’t grown revenue at all since 2007. Figures 3 and 4 show the rating landscape of all All Cap Blend ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs (click to enlarge) Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds (click to enlarge) Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Thaxston McKee receive no compensation to write about any specific stock, style, or theme.