Author Archives: Scalper1

6 ETFs To Play In Q1

The year 2016 unfolded amid a myriad of woes and huge uncertainty. The woes stemmed mainly from the developed foreign economies due to growth issues and uncertainties in the homeland emanating from the speculation over the speed and quantum of the Fed rate hike throughout 2016. The Fed enacted a meager hike at the tail end of 2015 and as of now, the investing world is expecting four more hikes in 2016, if everything goes well. However, things could change any point of time along with global or domestic market occurrences (read: ETF Tactics for a Rate-Proof Portfolio ). The broader global indices were mostly in red in 2015 snapping the bull market trend seen in earlier years. Now, all eyes will be on how the year 2016 fares on the bourses. Let’s not move too further ahead and instead focus on the prospective ETF winners of the first quarter of 2016. To do this, we have relied on both seasonality of the asset class and the earnings performance of the equity sectors. iShares U.S. Financials ETF (NYSEARCA: IYF ) The operating environment for financial companies is presently benign thanks to the Fed liftoff. In a rising rate environment, financial companies’ net interest margin should also rise. In any case, U.S. banks are in a better shape right now (read: Guide to the 7 Most Popular Financial ETFs ). Finance is expected to be a growth driver in the fourth-quarter 2015 earnings season which is already underway. The sector is expected to score the second-best earnings growth of 6.8%. Finally, as per Equity Clock, the financial sector, especially the banks, enjoy seasonality in the first quarter of every year. iShares Transportation Average ETF (NYSEARCA: IYT ) Equity Clock also reveals that the first quarter is beneficial for airlines and railroads with seasonality kicking in from the end of January and extending till early May. Plus, stepped-up economic activities and cheap fuel are still there to drive up transportation stocks. The transportation sector is expected to report 12.1% growth in earnings on just a 1% decline in revenues. One way to play this trend is with IYT. The ETF tracks the Dow Jones Transportation Average Index, giving investors exposure to a small basket of close to 25 securities. Utilities Select Sector SPDR ETF (NYSEARCA: XLU ) Gas utilities are normally in demand in the cold-stricken first quarter. Though utilities are likely to be on the downside following the Fed liftoff, but no material hike in the long-term interest rates since then made the sector a winner last one month compared with several glamorous and in-vogue sector ETFs like the Consumer Discretionary Select Sector SPDR ETF (NYSEARCA: XLY ) and the Technology Select Sector SPDR ETF (NYSEARCA: XLK ) . The fund added 0.3% in the last one month (as of December 31, 2015) while XLY and XLK were down over 4.2% and 3.4%, respectively, during the same timeframe. Market Vectors Retail ETF (NYSEARCA: RTH ) According to Equity Clock , seasonal strength for the consumer discretionary sector stretches from October 17 to April 12. The sector is expected to post earnings growth of 2.4% in Q4, much better than the consumer discretionary sector’s expected earnings decline of 4.8%. Its sales expectation is also steady at 6.4% for Q4, again better than 1.4% growth expected from the consumer discretionary space. More jobs and cheaper fuel should help these sectors to grow. PowerShares DB USD Bull ETF (NYSEARCA: UUP ) The greenback is yet another asset which enjoys the tailwind of seasonality in the first quarter, per analysts. In any case, this U.S. dollar ETF lost over 1.2% in the last one month (as of December 31, 2015) giving the product a leeway for rally. The key logic behind the ascent as per Investopedia is that investors must have repatriated money at the yearend, resulting in a weaker dollar and then again bet on the dollar in the New Year. Also, in 2016, the U.S. dollar should have one more reason – U.S. policy tightening – to celebrate. iShares Russell 2000 ETF (NYSEARCA: IWM ) Small-cap stocks are the barometer of domestic economic health. So, when the U.S. economy shifted gear in December and experienced policy normalization, most eyes moved to small-cap stocks in order to cash in on the U.S. economic growth momentum. Plus, Russell 2000 has a history of rallying in January and February, as per Equity Clock. In any case, if dollar gains strength, investors will definitely bet on small-cap stocks as larger caps are more vulnerable to the dollar strength. Link to the original article on Zacks.com

China Tech Stocks Hammered Again On Fears Of Slowdown

Turmoil in China stocks continued Thursday as a sharp devaluation of the yuan triggered a selloff in U.S.-traded China tech stocks for the second day this week. Among those taking hits, Alibaba (BABA), Baidu (BIDU) and Weibo (WB) shares were all down 6%, while NetEase (NTES) and JD.com (JD) were down 5% in afternoon trading on the stock market today. China’s CSI 300 Index, which tracks blue chip stocks on the Shanghai and Shenzhen markets, plunged

AlphaCentric Converts Hedge Fund Into New Managed Futures Mutual Fund

Managed futures funds provide investors with exposure to commodities, currencies, stocks, and bonds by investing in a range of securities, including futures, forwards, swaps and ETFs. Due to the trend following, long/short nature of their investment strategies, these funds have very low correlation to traditional asset classes. As markets continue to be volatile and correlations between asset classes continue to increase, managed future funds are gaining more and more interest. In fact, this category of funds has been the most popular single-strategy category of liquid alternative funds over the past year, pulling in $8.5 billion of assets over the twelve month period ending November 30, 2015, according to data from Morningstar. New AlphaCentric Fund While managed futures funds were available exclusively to high-net worth individuals and institutions in the past, today there more than 50 managed futures funds available as ’40 Act mutual funds, and on December 18, AlphaCentric and Integrated Managed Futures Corp (“IMFC”) added another to the growing roster: the AlphaCentric/IMFC Managed Futures Strategy Fund (MUTF: IMXAX ). Sub-advised by IMFC, the new fund differentiates itself from its peers by pursuing its investment objective of capital appreciation through IMFC’s proprietary investment program, which attempts to identify investment opportunities with limited downside and potentially large rewards. This investment program removes subjectivity and human emotion from the day-to-day decision-making process. The fund’s assets are allocated across asset classes using IMFC’s multi-factor models, which consider momentum, yield, value, relative buying power of different currencies, commodity cost of production and supply/demand statistics, price-to-earnings and -book ratios, the difference in yield between issuers or financial instruments, and more. The fund also maintains large cash positions as part of its investment strategy. Fund Details The AlphaCentric/IMFC Managed Futures Strategy Fund is available in three classes: A ( IMXAX ), C (MUTF: IMXCX ), and I (MUTF: IMXIX ). The Class I shares have been created through the conversion of a hedge fund (the Attain IMFC Macro Fund LLC) and will take on the performance track record of that fund dating back to March 10, 2014. The investment management fee for all shares of the fund is 1.75%, and the respective net-expense ratios are 2.24%, 2.99%, and 1.99%. The minimum initial investment for all three share classes is $2,500. Integrated Managed Futures Corp. will serve as the sub-advisor to the fund. Roland Austrup, Robert Koloshuk, and John Lukovich are listed in the fund’s prospectus as its portfolio managers. For more information, view a copy of the fund’s prospectus . Jason Seagraves contributed to this article.