Category Archives: etf

Inside Dynamic Europe ETF By First Trust

Ongoing policy easing and hopes for further stimulus have put the spotlight on European stocks and their related ETFs. Recently, one of the renowned ETF issuers, First Trust, introduced a product in the U.S. targeting Europe. The launched product – the First Trust RiverFront Dynamic Europe ETF (NASDAQ: RFEU ) – hit the market on April 13. Below, we highlight the product in detail: RFEU in Focus The fund provides exposure to European companies through investments in common stock, depositary receipts and real estate investment trusts, and forward foreign currency exchange contracts. It is an actively managed fund and does not track any index. The fund employs a dynamic currency hedging strategy by using forward foreign currency exchange contracts and currency spot transactions to hedge the fund’s currency exposure either partially or fully. RiverFront is the sub-advisor to the fund and is responsible for managing the portfolio. The fund advisor will perform top-down analysis of liquidity, investability and data availability to narrow the investable universe down to roughly fifty specific country and regional geographic markets. Then, on the basis of both quantitative and qualitative factors, stocks are selected. RFEU is a well-diversified fund, where Anheuser-Busch InBev (NYSE: BUD ) takes the top spot with 4.15% weight, followed by Unilever (NYSE: UL ) and Siemens ( OTCPK:SIEGY ) with over 3% exposure each. The rest of the stocks don’t account for more than 2.6% of the portfolio individually. In total, the fund holds about 296 stocks. Sector-wise, Consumer Staples gets the highest exposure with 18.2% of the portfolio. Industrials, Consumer Discretionary, Financials and Healthcare also get double-digit exposure in the basket. As far as country exposure goes, France (21.1%) gets the top priority, while Germany (19.7%), United Kingdom (17.9%) and Spain (10.3%) take up the next three positions. The fund charges about 83 bps in fees. As per ETF.com , RFEU has already amassed $25.8 million in its asset base. The fund is up 1.3% in the last 10 days (as of April 25, 2016). How Does it Fit in a Portfolio? RFEU is a good choice for investors seeking capital appreciation through exposure to European stocks. Additionally, the ETF will also provide diversification benefits to investors. Meanwhile, in March, the ECB came up with a more intensified economic stimulus and opted for multiple rate cuts and the expansion of its quantitative easing program to boost the economy. Monthly asset purchases were raised to EUR 80 billion from EUR 60 billion previously. So, the launch of the new ETF targeting this market seems well timed. ETF Competition The newly launched ETF will have to face competition from Europe-focused ETFs like the Vanguard FTSE Europe ETF (NYSEARCA: VGK ). VGK is one of the most popular ETFs in the space, with an asset base of $14.1 billion and average trading volume of 5.1 million shares. The fund tracks the FTSE Developed Europe All Cap Index and charges 12 basis points as fees, which is much lower than the aforementioned product. The iShares MSCI EMU ETF (BATS: EZU ) is another popular fund in the space, with an asset base of $12.8 billion and trades in a good volume of more than 8 million shares a day. The fund tracks the MSCI EMU Index. The fund charges 47 basis points as fees (see all European Equity ETFs here ). Apart from these, RFEU could also face competition from the iShares Europe ETF (NYSEARCA: IEV ) tracking the S&P Europe 350 Index. The fund has an asset base of $2.7 billion and volume of almost 835,000 shares a day. It has an expense ratio of 60 bps. Thus, the newly launched fund is costlier than the popular ETFs in the space. So, to garner investors’ money, the fund needs to sell its actively managed strategy and hope for some outperformance over traditional benchmarks as well. Original Post

Facebook Q1 Eases Tech Woes After Apple, Microsoft, Alphabet Flop

During a tough earnings season for tech companies like Apple ( AAPL ), Alphabet ( GOOGL ), Microsoft ( MSFT ), Netflix ( NFLX ) and Twitter ( TWTR ), Facebook ( FB ) stood out from the pack Wednesday with a first-quarter report that crushed expectations. The social-networking leader’s Q1 revenue jumped 52% year over year to $5.38 billion, topping the consensus estimate of $5.26 billion. Earnings per share minus items surged 83% to 77 cents, above the consensus estimate of 62 cents. Growth in the top and bottom lines accelerated for the third consecutive quarter. Facebook stock shot 9% higher in extended trading, after closing up 0.1%. Among other metrics in its Q1 report, Facebook said daily active users climbed 16% to 1.09 billion on average. Monthly active users rose 15% to 1.65 billion, and mobile monthly active users increased 21% to 1.51 billion. Mobile advertising revenue represented approximately 82% of total ad sales in Q1, up from 73% a year earlier and in line with estimates. The latest advances come amid a broader effort to enhance the user experience and continue to grow revenue. As part of its video monetization strategy, Facebook has been methodical in rolling out video ads, including on its photo- and video-sharing app Instagram. In the past year, Facebook also has been more aggressive expanding advertising on Instagram and offering better analytics and measurement tools for advertisers. And the company also boosted its video ad platforms, creating new ad formats and ad buying options, with enhanced targeting capabilities. That strategy appears to be paying off. Facebook now has 3 million advertisers, up from 2 million six months ago. Facebook didn’t provide specific numbers on Oculus Rift shipments, which began late last month, and said it won’t have a material impact on 2016 revenue. But CEO Mark Zuckerberg was upbeat about virtual reality on a conference call, saying “We see virtual reality as the next big computing platform, and we’ll continue to make investments in that area.” Facebook also said Wednesday its board of directors approved a proposal to create a new class of non-voting capital stock. If approved, the company intends to issue two shares of Class C capital stock as a one-time stock dividend for each outstanding share of Class A and Class B common stock. Facebook said the proposal would allow Zuckerberg to maintain his long-term vision for the company, mitigate succession risk and potential future voting dilution, while also enabling him to pursue his goals of giving away 99% of his shares “to advance human potential and promote equality via the Chan Zuckerberg Initiative.” “I’ll be able to keep founder control of Facebook so we can continue to build for the long term, and Priscilla and I will be able to give our money to fund important work sooner,” Zuckerberg said in a statement. The Q1 report caps a heady month for Facebook, during which Zuckerberg unveiled his roadmap at Facebook’s annual F8 Developer Conference. He emphasized pushing Facebook’s Messenger chat platform deeper into the business world with chatbots, enhancing Live video with virtual reality, and expanding the social network to remote regions of the world. Analysts believe the monetization strategy of Messenger will closely follow that of Instagram, with both platforms seen becoming multibillion-dollar businesses. “We had a great start to the year,” said Zuckerberg in a statement. “We’re focused on our 10-year roadmap to give everyone in the world the power to share anything they want with anyone.”