Category Archives: etf

Top And Flop Country ETFs Of Q1

The international stock markets had a rough run in the first quarter of 2016, with the Vanguard FTSE All-World ex-US ETF (NYSEARCA: VEU ) losing 0.6%, thanks to deflationary worries in the developed market, oil price issues, the Chinese market upheaval and its ripple effects on the other markets (see all World ETFs here ). While these issues made the country ETF losers’ list long, the space was not bereft of winners either. Several countries’ stock markets performed impressively in this time frame on country-specific factors. Plus, a soggy greenback boosted the demand for emerging market investing, increasing foreign capital inflows into those countries. In fact, the lure of international investing may be seen in the second quarter too, as the Fed is likely to opt for a slower-than-expected interest rate rise. Overall, Latin America won the top three winners’ medals, while the losers were scattered across the world. Investors may wish to know the best- and worst-performing country ETFs of the first quarter. Below, we highlight the top- and worst-performing country ETFs for the January to March period. Leaders iShares MSCI All Peru Capped (NYSEARCA: EPU ) – Up 30.8% The Peruvian market was on a tear in the first quarter, courtesy of the sudden spurt in commodity prices. After a rough patch, metals like gold and silver finally got back their sheen this year on a lower greenback. Even copper returned positively, as evident from the 2.6% return by the iPath DJ-UBS Copper Total Return Sub-Index ETN (NYSEARCA: JJC ). Being a large producer of precious metals, Peru greatly benefited from this trend, offering the pure play EPU a solid 30.8% return. iShares MSCI Brazil Capped ETF (NYSEARCA: EWZ ) – Up 27.2% While the economic growth prospects of Brazil are weakening, heightened political chaos is pushing up its market. Brazilian stocks have generally reacted positively to any political drama related to president Dilma Rousseff. Speculation that Rousseff is incapable of dissuading the impeachment proceedings that have been called against her, and the prospect of a change in governance set the Brazil ETFs on fire. Global X MSCI Colombia ETF (NYSEARCA: GXG ) – Up 22% The Colombian economy is a major exporter of commodities, from the energy sector (oil, coal, natural gas) to the agricultural sector (coffee). It has also a strong exposure to the industrial metal production market. Thus, a rebound in the commodities market led to the surge in this ETF. Though from a year-to-date look oil prices are down, commodities bounced in the middle of the quarter. This might have given a boost to the Colombia ETF. Losers WisdomTree Japan Hedged Financials ETF (NYSEARCA: DXJF ) – Down 24.1% At its January-end meeting, the BoJ set its key interest rate at negative 0.1% to boost inflation and economic growth. The BoJ then hinted at further cuts in interest rates if the economy fails to improve desirably. However, the introduction of negative interest rates weighed on the financial sector, as these stocks perform favorably in a rising rate environment. Also, the currency-hedging technique failed in the quarter due to a falling U.S. dollar. This was truer for the Japan equities, as the yen added more strength by virtue of its safe-haven nature. The twin attacks dulled the demand for the hedged Japan financials ETF, which lost 24.1% in the quarter. Deutsche X-trackers MSCI Spain Hedged Equity ETF (NYSEARCA: DBSP ) – Down 21.6% The Spanish economy is bearing the brunt of deflationary threats despite the ECB’s massive policy easing. Consumer prices in Spain are likely to decline 0.8% year over year in March 2016, the same as in February, as per Trading Economics . This led the Spain ETF to lose 21.6% in the first quarter. SPDR MSCI China A Shares IMI ETF (NYSEARCA: XINA ) – Down 19.21% Since the first quarter was mainly about the nagging economic slowdown in China, most of the China ETFs had a tough time. Within the bloc, XINA lost the most in the quarter, shedding over 19%. Original Post

4 Best-Rated Franklin Templeton Mutual Funds

With around $763.9 billion assets under management, Franklin Templeton Investments is considered one of the well-known global investment management firms. Founded in 1947, the company offers investment management strategies and integrated risk management solutions to individuals, institutions, pension plans, trusts and partnerships. With over 650 investment professionals and offices in 35 countries, Franklin Templeton provides services in more than 180 countries. It manages a wide range of mutual funds across different categories, including both equity and fixed-income funds. Below, we share with you four top-rated Franklin Templeton mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all Franklin Templeton mutual funds, investors can click here . Franklin Corefolio Allocation Fund A (MUTF: FTCOX ) seeks growth of capital. It invests an equal portion of its assets in Franklin Flex Cap Growth Fund, Franklin Growth Fund, Mutual Shares Fund and Templeton Growth Fund. Funds in which FTCOX allocates its assets tend to invest in both domestic and foreign securities. The fund has a one-month return of 4%. T. Anthony Coffey is the fund manager of FTCOX since 2003. Templeton Global Bond Fund A (MUTF: TPINX ) invests a large chunk of its assets in bonds, including notes, bills and debentures. It primarily invests in debt securities of governments or those that are issued by government agencies. The fund invests in securities throughout the globe, and may allocate not more than 25% of its assets in securities that are considered below investment-grade. This is a non-diversified fund and has a one-month return of 2%. TPINX has an expense ratio of 0.88%, compared to the category average of 1.03%. Franklin Convertible Securities Fund A (MUTF: FISCX ) seeks maximum total return through appreciation of capital and high level of current income. The fund invests the lion’s share of its assets in convertible securities. Though FISCX may invest all of its assets in non-investment grade securities, it invests a maximum of 10% of its assets in unrated securities or those that are rated below B. It may also invest not more than 20% of its assets in securities including common and preferred stocks. The fund has a one-month return of 1.7%. As of December 2015, FISCX held 75 issues, with 2.55% of its assets invested in Tyson Foods (NYSE: TSN ). Franklin California Tax Free Income Fund A (MUTF: FKTFX ) invests a major portion of its assets in municipal securities that are rated investment-grade and exempted from federal alternative minimum tax as well as California personal income taxes. The fund may invest not more than 20% of its assets that are subject to the federal alternative minimum tax. A maximum of 35% of FKTFX’s assets may be invested in securities of the U.S. territories. It has a one-month return of 0.9%. FKTFX has an expense ratio of 0.58%, compared to the category average of 0.89%. Original Post

5 ETFs To Buy For Q2

After a terrible start to the year, the U.S. stock market made a stunning comeback in the last six weeks of the first quarter. This is especially true as the major U.S. bourses recouped all the losses after falling more than 14% (as of February 11) from their recent peak levels. Notably, both the S&P 500 and Dow Jones were in the green at the end of the quarter, having logged in 0.8% and 1.5% gains, respectively. The impressive rally was driven by a rebound in oil prices, a spate of upbeat U.S. economic data, extra easing policies in Europe and Japan, and stabilization in the Chinese economy. Additionally, the Fed’s dovish comments infused more optimism in the stock markets lately. The bullish trend is likely to continue at least in the second quarter given the substantial improvement in the economy, an accelerating job market, pick-up in inflation as well as increasing consumer confidence. Further, the Fed is not expected to raise interest rates anytime soon given the global growth concerns that should drive the U.S. stocks higher. Nevertheless, bouts of volatility will keep threatening the bulls. Some of the headwinds include relatively higher valuations, risk of earnings weakness like what we saw in the fourth quarter, and oil price instability. As the U.S. economy is leading the way amid global uncertainty, investors should focus on the domestic market. We have highlighted five picks for 2Q that should outperform and cost less than many other products. These funds have either a Zacks Rank of 1 (Strong Buy) or 2 (Buy). iShares MSCI USA Minimum Volatility ETF (NYSEARCA: USMV ) Low volatility products generate impressive returns or often outperform in an uncertain or a crumbling market while providing significant protection. This is because these funds include more stable stocks that have experienced the least price movement in their portfolio. As a result, low-volatility strategies appear safe in a turbulent market, and reduce losses in declining markets while generating decent returns when the markets rise. As such, USMV could be a great pick with an AUM of $11.3 billion and an expense ratio of 0.15%. It offers exposure to 168 U.S. stocks having lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. The fund is well spread across a number of securities with none holding more than 1.71% of assets. From a sector look, financials, health care, information technology and consumer staples take the top four spots with a double-digit allocation each. The fund trades in solid volume of 3 million shares a day and has gained 6.4% in the year-to-date time frame. It has a Zacks ETF Rank of 2. SPDR S&P Dividend ETF (NYSEARCA: SDY ) Dividend-focused ETFs have been riding high this year on investors’ drive for income amid heightened uncertainty in the stock market. This is because dividend paying securities are the major sources of consistent income when returns from the equity market are at risk. Dividend-focused products offer safety in the form of payouts and stability in the form of mature companies that are less immune to the large swings in stock prices. Further, longer-than-expected interest rates have made this corner a hot investment area. As a result, SDY seems an interesting choice for the second quarter. This is one of the popular and liquid ETFs in the dividend space with AUM of $13.2 billion and average daily volume of about 940,000 shares. This fund provides exposure to the 109 U.S. stocks that have been consistently increasing their dividend every year for at least 25 years. This can be done by tracking the S&P High Yield Dividend Aristocrats Index. Though the fund is slightly skewed toward the financial sector with 22.7% share, industrials, utilities, consumer staples, and materials make up for a nice mix in the portfolio with a double-digit allocation each. The fund charges 35 bps in fees per year and yields 2.51% in annual dividend. It has added 9.9% so far this year and has a Zacks ETF Rank of 2. Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY ) With the U.S. economy on a modest growth path and the spring season underway, the consumer discretionary sector is expected to get a boost. The auto industry is booming, the manufacturing industry seems to be stabilizing having ended a five-month declining streak with accelerated production and rising new orders, and the housing market is geared up for the spring buying fervor. Further, cheap financing will continue to entice consumers to buy more homes and avail auto loans, thereby propelling the stocks of this sector higher. While there are several options to play the surge in the sector, the ultra-popular XLY having AUM of $10.7 billion and average daily volume of around 8.2 million shares looks attractive. It tracks the Consumer Discretionary Select Sector Index and holds 88 securities with higher concentration on the top four firms at 30%. Other firms hold less than 4.9% share each. In terms of industrial exposure, media takes one-fourth share while specialty retail, internet retail, and hotels, restaurants & leisure round off the next three spots with a double-digit exposure each. The fund charges 14 bps in fees per year and has added 2% so far this year. It has a Zacks ETF Rank of 1. SPDR S&P Homebuilders ETF (NYSEARCA: XHB ) A solid labor market along with affordable mortgage rates will continue to fuel growth in a recovering homebuilding sector, creating a buying opportunity in homebuilders and housing-related stocks. In addition, slower and gradual rate hikes will not impede the growth prospect of the sector, at least in the second quarter. The most popular choice in the homebuilding space, XHB, follows the S&P Homebuilders Select Industry Index. In total, the fund holds about 37 securities in its basket with none accounting for more than 5.73% share. The product focuses on mid-cap securities with 65% share, followed by 27% in small caps. The fund has amassed about $1.5 billion in its asset base and trades in heavy volume of about 3.6 million shares. Expense ratio comes in at 0.35%. XHB has lost modestly 0.1% in the year-to-date timeframe and has a Zacks ETF Rank of 2. iShares 20+ Year Treasury Bond ETF (NYSEARCA: TLT ) Treasury bonds, in particular the long-term ones, are the biggest beneficiaries of lower interest rates. The longer the duration, the more sensitive the fund is to the changes in interest rates. As such, bonds having a higher duration will experience significant gains for as long as interest rates remain low. Additionally, long-term bonds will continue to get an impetus from the negative interest rates in the other developed world like Europe and Japan that made the U.S. bonds attractive to foreign investors. Given this, the ultra-popular long-term Treasury ETF – TLT – looks exciting for the second quarter. It tracks the Barclays Capital U.S. 20+ Year Treasury Bond Index, holding 32 securities in its basket. The fund focuses on the top credit rating bonds with average maturity of 26.61 years and effective duration of 17.77 years. It charges 15 bps in annual fees and exchanges about 8.7 million shares in hand per day. With AUM of $8.1 billion, TLT has gained 8.6% so far this year and has a Zacks ETF Rank of 2. Original Post