When Comcast launches a Web-based TV service this fall, first in Boston, it’ll be an acid test for another spin of the “skinny bundle” — a lower-priced TV package with limited channels. Apple (AAPL) will pay attention, analysts say, because its much-anticipated Web-TV service may resemble Comcast’s in some ways, if as expected it’s launched in 2016. The launch depends on whether Apple can negotiate streaming rights to live broadcast content, as
Emerging market equities seem to have gained some traction. The latest data from Bloomberg showed that emerging market ETFs experienced near $1 billion in net asset inflow last week ended October 9, driven mainly by movements in India, Mexico and Russia. This was a sharp rebound from the prior week ended October 2, when outflows from these funds more than doubled from the week-ago level. Inflows into emerging-market ETFs totaled $936 million last week, more than offsetting the $828 million in outflows over the previous two weeks. Stock funds gathered $982.4 million in assets but bond funds exhaled $46.4 million. Notably, the MSCI Emerging Markets Index rose 6.9% last week, the fastest pace since the week ended December 2, 2011. Per Bloomberg, India witnessed the biggest inflow with collections of $150.9 million, compared with an outflow of $25.4 million in the prior week. Stock funds accumulated $151.7 million while bond funds moved out $0.8 million. The huge inflow in Indian ETFs can be attributed to the Reserve Bank of India’s move to cut its key interest rate by 50 basis points (bps) to 6.75% in a bid to boost economic activity as well as the IMF forecast of India retaining the world’s fastest growing economy status. According to IMF, the Indian economy is expected to grow 7.3% in 2015, compared with 6.8% growth in China and 2.6% in the U.S. Mexico experienced the second biggest inflow. Investors added $135.9 million to this country’s ETFs last week, as compared to $35.3 million of redemptions in the previous week. Stock funds gained $141.4 million, while bond funds fell $5.5 million in the week. Latin America’s second biggest economy has been recovering from the oil price crash. Domestic strength, improving U.S. economy, decreasing unemployment rate and subdued inflation bode well for the Mexican economy. Russia recorded the third biggest movement with $133.9 million in inflows. Stock funds added $135.7 million while bond funds saw an outflow of $1.7 million last week. The surge in Russian ETFs can be attributed to the rebound in oil price and stabilization of the ruble, raising hopes that the nation’s economic situation may not deteriorate to the level apprehended. Below we highlight four emerging market ETFs that have experienced significant net asset inflow in the week ended October 9. Goldman Sachs ActiveBeta Emerging Markets ETF (NYSEARCA: GEM ) – $157.26 Million This recently launched smart beta ETF tracks the Goldman Sachs ActiveBeta Emerging Markets Equity Index, designed to generate returns by selecting equities based on four well-established attributes of performance – good value, strong momentum, high quality and low volatility. The fund has the highest exposure to Asia, ex-Japan (68%), followed by Europe, Middle East and Africa (18.3%) and Latin America (13.6%). About a quarter of the assets in its portfolio are tied to financial firms. The ETF has amassed roughly $184 million in its asset base while it trades in a volume of roughly 74,000 shares a day. It charges 45 bps in fees from investors per year. Vanguard FTSE Emerging Markets ETF (NYSEARCA: VWO ) – $139.29 Million This is the top asset grossing emerging market ETF, which follows the market-cap weighted FTSE Emerging Index that measures the performance of roughly 850 large and mid-cap companies in 22 emerging markets. This fund is highly focused on China (26.6%), followed by Taiwan (14.1%) and India (12.7%). Sector-wise, about a quarter of its total assets are related to financial services firms. VWO has garnered nearly $38 billion in assets and trades in a heavy volume of roughly 16 million shares per day. It charges 15 bps in annual fees and carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Market Vectors Russia ETF (NYSEARCA: RSX ) – $129.56 Million This ETF tracks the Market Vectors Russia Index, providing exposure to publicly-traded companies that are domiciled in Russia. The fund is heavily biased toward energy, followed by materials and financials. It has gathered around $2 billion in assets and trades in a hefty volume of nearly 12 million shares a day. It charges 63 bps in fees per year and carries a Zacks ETF Rank #4 (Sell) with a High risk outlook. iShares MSCI India (BATS: INDA ) – $119.14 Million INDA follows the MSCI India Index, which measures the performance of equity securities of the top 85% of companies in the Indian securities market. The fund gives the highest weight to the information technology sector, followed by financials and healthcare. It has garnered $3.8 billion in assets and trades in a solid volume of 2 million shares per day. It charges 68 bps in investor fees and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook. Original Post
Oil refiners could outperform in energy space. Widening spread between crude and refined products help support refiners. An ETF option that tracks some strengthening oil refineries. In the energy space, oil refiners and sector-related exchange traded fund could outpace the big oil and services names as refineries capitalize on the cheap crude oil and higher prices on refined products. Investors interested in tracking the oil refinery space can take a look at the Market Vectors Oil Refiners ETF (NYSEArca: CRAK ) , which began trading in August. CRAK has gained 3.6% over the past month. “Refiners have been the lone bright spot in the energy sector during the past year, handily outperforming every other subsector,” writes Allen Good, who is a senior equity analyst for Morningstar . “While oil prices have deteriorated, refining margins have improved, thanks to strength in gasoline margins due to key refinery outages and strong demand.” Gasoline demand, which is nearing its 2007 record high, and supply disruptions from refinery outages have bolstered gasoline margins about 50% this year. While we are at the end of the summer driving season, Good expects demand growth outside of normal seasonality, thanks to help from cheap oil prices. Good also projects improved earnings in the refining space as short-term investments. Oil refiners have not taken large, capital-intensive expansions or acquisitions. Instead, companies have capitalized on the availability of discount crude and natural gas or improving yields. “These projects typically require much less capital (processing capacity is much cheaper for light crude than heavy crude), have short payback periods, and generate attractive returns,” Good added. “Thanks to the completion of many of these projects, as well as improved operating performance, refiners can generate earnings growth in a flat-margin environment.” For example, Tesoro (NYSE: TSO ) shows ongoing improvement and is adding integration programs in California. HollyFrontier (NYSE: HFC ) is investing in improvement projects. Marathon Petroleum (NYSE: MPC ) added increased condensate processing, distillate production and exports. Western Refining (NYSE: WNR ) invested in logistics projects. CRAK includes a 5.5% tilt toward TSO, 5.0% in HFC, 6.9% in MPC and 3.4% in WNR. Refiners are also investing in midstream assets, which can provide earnings and achieve higher midcycle returns, with less volatility, Good said. Furthermore, many refiners have generated free cash flow, which have been returned to shareholders through dividends and share buybacks. While yields have remained relatively low, dividend growth is picking up. CRAK’s underlying index shows a 30-day SEC yield of 1.51%. Disclosure: None. Max Chen contributed to this article .