Tag Archives: year

5 ETF Outperformers With 20% Plus Gains Year To Date

It was a tough year for the U.S. markets, as most of the major benchmarks are struggling to register healthy gains this year. Several concerns, including sluggish global growth, a dramatic slide in oil prices and a stronger dollar, continued to hurt the performances of the benchmarks throughout the year. Though many of the ETFs followed the overall trend of the market movement, some of them took recourse to an alternative path. Major Lingering Concerns The continuing plunge in oil prices is one of the major concerns this year. The absence of a justifiable motive to reduce oil production from the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries, including Russia, and weak global demand continued to weigh on oil prices. Moreover, the fact that Iran will start exporting oil next year when international sanctions are lifted, and a lower-than-expected fall in the U.S. production raised further concerns. Separately, global growth worries, including that in the world’s second-largest economy, dampened investor sentiment throughout the year. A flurry of dismal Chinese economic data released over the period increased concerns that the economy might fail to reach its 7% target this year. Though GDP growth in the third quarter for the U.S. was revised upward in the latest estimate released by the Commerce Department, the overall economic picture remained disappointing. Another main concern that had a negative impact on markets is the strengthening dollar. A stronger dollar dragged down the earnings performance of the major companies with significant international exposure. Also, strong labor market conditions and a slow upward movement of inflation rate raised the prospects of a lift-off this month, which further had a negative impact on investor sentiment. 5 ETFs Bucking the Trend Despite these concerns, some of the ETFs performed impressively to register solid returns and gained investor attention this year. In this section, we have highlighted 5 ETFs that returned at least 20% in the year-to-date frame and are poised to end the year on a positive note. Market Vectors ChinaAMC SME-ChiNext ETF (NYSEARCA: CNXT ) This fund provides exposure across 101 securities by tracking the SME-ChiNext 100 Index. Nearly 25.5% of total assets are allocated to the top 10 holdings. Sector-wise, Information Technology takes the top spot at 32.8%, while Industrials and Consumer Discretionary take the next two positions. CNXT has amassed $56.5 million in its asset base, while it sees moderate volume of around 125,000 shares a day. The ETF has an expense ratio of 0.66%, and has a Zacks Rank #3 (Hold). It returned 42% in the year-to-date frame. WisdomTree Japan Hedged Health Care ETF (NYSEARCA: DXJH ) This fund follows the WisdomTree Japan Hedged Health Care Index, holding 57 stocks in its portfolio. The product is largely concentrated in the top 10 firms that collectively make 61.6% of the basket. The ETF has been able to manage $22.9 million in its asset base, and is lightly traded with more than 14,000 shares per day. It charges 48 bps in annual fees and expenses. DXJH has a Zacks Rank #1 (Strong Buy) and returned 37.8% in the year-to-date frame. ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) This fund provides exposure across 81 securities by tracking the Poliwogg Medical Breakthroughs Index. Nearly 39.2% of the total assets are allocated to its top 10 holdings. Sector-wise, Biotechnology takes the top spot at 74%, with the rest of the assets invested in Pharmaceuticals. SBIO has amassed $169.5 million in its asset base, while it sees moderate volume of around 149,000 shares a day. The ETF has 0.50% in expense ratio and has a Zacks Rank #2 (Buy). It returned 26.7% in the year-to-date frame. First Trust DJ Internet Index ETF (NYSEARCA: FDN ) This fund follows the Dow Jones Internet Composite Index, holding 41 stocks in its portfolio. The product is largely concentrated in the top 10 firms that collectively make 61% of the basket. The ETF has been able to manage $4.9 billion in its asset base, and is moderately traded with more than 598,000 shares per day. It charges 54 bps in annual fees and expenses. The ETF has a Zacks Rank #2 (Buy) and returned 24.8% in the year-to-date frame. PowerShares NASDAQ Internet Portfolio ETF (NASDAQ: PNQI ) This fund provides exposure across 94 securities by tracking the Nasdaq Internet Index. Nearly 61% of the total assets are allocated to its top 10 holdings. Sector-wise, Internet Software % Services takes the top spot at 56%, while Internet & Catalog Retail takes the next position. PNQI has amassed $260.8 million in its asset base, while it sees light volume of around 24,000 shares a day. The ETF has 0.60% in expense ratio and has a Zacks Rank #2 (Buy). It returned 22.7% in the year-to-date frame. Original Post

4 Sector ETFs On Sale

A string of woes have held back the U.S. market this year, with the S&P 500 adding just about 2.5% so far. Global growth issues, Fed lift-off worries and a surging greenback are coming in the way of the markets’ outperformance. While many may hope for a sharp revival in the market in 2016 following such a slow year, Goldman Sachs’ latest prediction points to the same story next year. Considering dividends, Goldman estimates stocks to return merely 3% next year. The renowned investment banker also raised overvaluation concerns over the U.S. market. This statement very well motivates investors to search for a value sector, if there is any left at all. A value play is especially required given the broad-based revenue weakness noticed in Q3, not only among multinationals but also within small-cap companies. After all, the low valuation might lead investors to some quality sector buys at best prices. No doubt, with all the major indices trading at around all-time highs, it is hard to find value plays at home. But for those investors ardently seeking undervalued sectors, there are still a few hidden treasures out there. While several indicators are used to find out any stock or sector’s valuation status, price-to-earnings ratio or P/E has been the most widespread. We have identified four sector picks having the lowest forward P/E ratio for next year’s earnings in the pack of 16 S&P sectors classified by Zacks and detail the related ETFs to play those sectors’ undervalued status. Auto – First Trust NASDAQ Global Auto ETF (NASDAQ: CARZ ) The U.S. automotive industry is on high gear. A strong labor market, persistently lower energy prices, increasing aging vehicles on road and a still-low interest rate environment made the first half of 2015 the best six months in a decade for auto sales. Though the Fed is poised to raise key interest rates in December, it will opt for a slower rate hike trajectory. So, auto loans are presently feared to get pricy. Despite strong fundamentals, the sector has a P/E ratio of 9.9 times for 2015 and 8.8 times for 2016, the lowest in the S&P universe, as per the Zacks Earnings Trend issued on November 18. Investors should note that the P/E of the auto industry trades at a 43.8% discount to the current year P/E of S&P and 45.7% discount to the next year P/E. The space is down 12.1% so far this year, implying that the auto stocks are yet to capitalize on the sector’s momentum. Investors should note that there is only one pure play CARZ in the space that provides global exposure to nearly 40 auto stocks by tracking the Nasdaq OMX Global Auto Index. CARZ has a Zacks ETF Rank #2 (Buy) and is up 1.4% so far this year (as of December 1, 2015). Transportation – iShares Dow Jones Transportation Average Fund (NYSEARCA: IYT ) This is yet another sector which failed to make the most of improving economic activities. The sector’s pricing is down 13.2% year to date. While a strong dollar will definitely play foul with the profits of big transporters, tailwinds including a stepped-up economy and cheap fuel are still in fine fettle. This raises optimism on the future of the transportation sector. This is especially true as total earnings of the sector were up 22.5% in Q3 while revenues declined 1.3%. This is much better than Q2 earnings growth of 9.4% and revenue decline of 1.9% for the same period. Revenues are forecast to grow from the first quarter of 2016. The current and the next year P/Es for the sector are 12.2 times each, reflecting a 30.7% and 24.7% discount to the S&P 500, respectively. One way to play this trend is with IYT, which tracks the Dow Jones Transportation Average Index that holds 20 stocks in its basket. The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook. The fund is off 10% so far this year (as of December 1, 2015). Finance – SPDR S&P Regional Banking ETF (NYSEARCA: KRE ) With the looming prospect of a lift-off, all eyes will be on financial stocks and ETFs. While the operating backdrop of financial stocks has improved a lot from the recession-cursed phase, a potential rising rate environment is another positive for the financial ETFs. The space has a current-year P/E of 13.6 times, reflecting a 22.7% discount to the S&P while its next year P/E stands at 12.8 times, a 21% discount to the S&P 500’s 2016 P/E. The space has lost 1.7% so far this year (as of November 27, 2015). While there are plenty of financial ETFs, investors can take a look at Zacks #2 ETF KRE. The bank fund is up 12.4% so far this year. Utilities – PowerShares S&P SmallCap Utilities ETF (NASDAQ: PSCU ) Utilities will be hurt by the Fed lift-off as this sector underperforms in a rising rate environment. But the space is expected to score positive earnings growth from the second quarter of 2016. The space has a current-year P/E of 15.7 times, reflecting a 10.8% discount to the S&P while its next year P/E stands at 15.3 times, a 5.6% discount to the S&P 500’s 2016 P/E. The space has lost 13.4% so far this year (as of November 27, 2015). However, investors should note that utility is a risky bet at this point of time. We thus highlight the small-cap utility ETF as small-cap stocks deal more with the reasonably expanding U.S. economy and also offer less exposure to the greenback. PSCU is up 4.1% so far this year (as of December 1, 2015). Original Post

Feast With These Stocks And ETFs On Thanksgiving

We are barely a few hours away from Thanksgiving Day which kick starts the one month-long holiday season. While most Americans warm up for their annual shopping gala on the fourth Thursday of November every year – which goes by giving thanks for all good things in life – the day mainly calls for celebratory meals with family and friends, at home or outside. This year, savings on gas stations thanks to cheap oil prices, an improving job market and still-contained inflation should lay a copious spread on the Thanksgiving table. How Pricey Are Thanksgiving Meals This Year? The national average cost of a Thanksgiving feast last year tallied $49.41 , as per the American Farm Bureau Federation. Though the Farm Bureau survey indicated that this cost stayed the same or somewhat declined from the prior year and moved along the consumer price index, ‘the average cost of Thanksgiving dinner for 10 people’ will likely cross $50 for the first time in 2015 since the agency started following the data. The spike in the price of turkey, the focus of the dining table, thanks to a supply crunch caused by bird flu is mainly behind the expected rise in cost. But, industry experts also believe that on an inflation-adjusted basis, prices are quite reasonable. Moreover, this year, consumers can also import fruits , vegetables, wines and cheeses at cheaper prices thanks to a soaring greenback. Yields of corn, wheat and soybeans are also abundant. As per USDA ‘s projection in October, all food price index is up 1.7% so far in 2015, below the 20-year historical average of 2.6%. Food away from home inflation is 2.5% this year against the 2.7% historical average while food at home inflation is just 1.1%, drastically lower than the historical average of 2.6%. In any case, restaurant industry sales are projected to peak in 2015 with a record high of $709.2 billion, representing the sixth successive year of real expansion in restaurant sales, per National Restaurant Association. If online sales are considered, Thanksgiving Day is expected to see an 18% year-over-year rise to $1.6 billion. It will be the ‘fastest growing online sales day for the second consecutive year’, per Adobe . So food and beverage companies are pinning their hopes on this Thanksgiving for huge profits. This is a key business-boosting occasion for these stocks and the related ETFs. Let’s take a look at the stocks and ETFs investors can gobble up for some gains throughout the holiday season. Stock Picks B&G Foods Inc. (NYSE: BGS ) The company makes and markets packed and easy-to-store food and household products. Its products basket carries hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, Mexican-style sauces, pickles, peppers, salad dressings, dry soups, puffed corn and rice snacks and many more. The list clearly indicates why the stock should be a hit on Thanksgiving. B&G has a Zacks Rank #1 (Strong Buy) and is up over 23% so far this year (as of November 24, 2015). Constellation Brands Inc. (NYSE: STZ ) The company, along with its subsidiaries, brews and markets beer, wine, and spirits in North America, Mexico, New Zealand and Italy. Wine’s compatibility with turkey at Thanksgiving dinner has put this company in focus. Constellation Brands has a Zacks Rank #2 (Buy) and a Growth score of ‘A’. STZ is up over 44% so far this year. The Kroger Co. (NYSE: KR ) Kroger, with its subsidiaries, operates as a retailer in the U.S. and abroad. It is the manufacturer and processor of food that is sold in its supermarkets. Kroger has a Zacks Rank #2, a Growth score of ‘B’ and a Value Score of ‘B’. KR is up about 16% so far this year. Ruth’s Hospitality Group Inc. (NASDAQ: RUTH ) The restaurateur’s Chris Steak House concept is among the bunch of eateries, which will remain open on Thanksgiving. The Florida-based company has a Zacks Rank #2 and a Value score of ‘A’. The stock is up over 15%. ETF Picks PowerShares Dynamic Food & Beverage Portfolio ETF (NYSEARCA: PBJ ) This product offers exposure to the stocks that are engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies. The $244.3-million ETF puts about 5% weight in Starbucks (NASDAQ: SBUX ), PepsiCo (NYSE: PEP ), Kroger, Mondelez (NASDAQ: MDLZ ) and Sysco (NYSE: SYY ) each. PBJ charges 58 bps in fees and is up 7.4% in the year-to-date frame (as of November 24, 2015). PBJ has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. The Restaurant ETF (NASDAQ: BITE ) This is a new ETF that gives investors access to the ‘food-away-from’ industry. No stock accounts for more than 3.09% weight of the 45-stock portfolio. At present, McDonald’s (NYSE: MCD ) takes the top spot. BITE charges 75 bps in fees. Market Vectors-Agribusiness ETF (NYSEARCA: MOO ) This $963-million ETF gives investors exposure to the overall performance of the global agribusiness industry. The U.S. makes up over half of the basket. Stocks like Monsanto (NYSE: MON ) and Syngenta (NYSE: SYT ) take over 8% each in the fund. MOO charges 57 bps in fees and is down 7.8% so far this year. Consumer Staples Select Sector SPDR ETF (NYSEARCA: XLP ) This is the most popular consumer ETF with about $7.8 billion of assets. The fund charges 14 bps in fees per year from investors. Food & Staples Retailing takes over 24% of the basket followed by beverages with over 21% weight. Food products take about 15.8% of the fund. XLP is up about 2.4% and has a Zacks ETF Rank #3 with a Medium risk outlook. Original Post