Tag Archives: etf
Paris Attack Put These Sector ETFs In Watch
Friday the thirteenth made itself literal in Paris when it encountered the worst terror attack in Europe in over a decade. A chain of Islamic State-backed terrorist attacks killed around 130 people in the city and left hundreds injured that night. As a payback and pledge to establish a terror-free world, France launched several air raids and bombed Islamic State targets – especially in Raqqa – in Syria. This was the most hostile anti-terrorism strike by France against this Islamic group ISIS. As expected, the entire risk-pro global investing backdrop took a beating after the annihilation and is yet to return to its prior shape. However, among all asset classes and sectors, there are a few which stand to gain from this horrible incident, while other are likely to be badly hit. Below we highlight some sectors which are in focus after the Paris attack. Defense The defense sector should benefit from France’s retaliation to ISIS in Syria. Along with the terror-stricken France, several of its western allies shared this mission. Washington has strengthened its strikes in ISIS-heavy regions and destroyed 116 ISIS oil trucks in Eastern Syria. Russia also joined hands with the West, probably to show vengeance against its plane crash in Egypt. The Islamic State of Iraq and the Levant’s Sinai Branch had taken responsibility of this incident. Defense stocks gained post Paris attack on November 13 and might see further expansion as such geo-political risks are favorable for weapon manufacturers and defense contractors. In any case, defense stocks have tested all-time highs ever since the ‘ rise of Islamic State in Iraq and Syria.’ Since the major global superpowers are likely to pursue an combined attack against ISIS militants, investors should watch aerospace and deference ETFs, namely iShares US Aerospace and Defense ETF (NYSEARCA: ITA ), SPDR S&P Aerospace & Defense ETF (NYSEARCA: XAR ) and PowerShares Aerospace & Defense Portfolio (NYSEARCA: PPA ) for gains. Cyber Security Cyber security is a red hot area at present. While technology has been a great boon to mankind, it has lugged with it the ills of ‘cyber-crime’. Enterprises and government agencies constantly face cyber-attacks and are always in the want of rigorous cyber security to keep hackers at bay. Several government databases store susceptible national information that should be kept safe from terrorist invasion. After the serial Paris assault avoided the eye of national intelligence, the need for enhanced security both online or offline has become a prerequisite. In fact, the topic trending the most now is whether governments should have access to technology that preserves the confidentiality of people’s ‘communications and transactions’, for the sake of national security . Needless to say, these talks would put cyber security stocks and the related ETFs, namely PureFunds ISE Cyber Security ETF (NYSEARCA: HACK ) and First Trust NASDAQ CEA Cybersecurity ETF (NASDAQ: CIBR ) in focus in the coming days. Hospitality Since tourism and hospitality sectors are hit hard when a terror attack takes place in a certain place, France will also bear the same fate. Not only France, big American and European cities which are basically the soft targets of ISIS might see a fallback in their tourism and hotel industry. Notably, the tourist industry accounts for about 8% of the French economy. Thanks to this fear for tourism, already big U.S.-based hotel chains that have considerable exposure in Europe as well, witnessed a retreat in their share prices. Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT ), Marriott International Inc. (NASDAQ: MAR ), Hyatt Hotels Corporation (NYSE: H ) and Wyndham Worldwide Corporation (NYSE: WYN ) lost about 7%, 5%, 3.6% and 5%, respectively, in the last five days (As of November 17, 2015). Not only hotels, since travelers are likely to abandon cruise trips, the apprehensive stocks of Carnival Corporation (NYSE: CCL ) and Royal Caribbean Cruises Ltd. (NYSE: RCL ) shed about 5% each in the last five trading sessions. Notably, consumer discretionary ETF PowerShares DWA Consumer Cyclicals Momentum Portfolio (NYSEARCA: PEZ ) invests over 25% in Hotels, Restaurants & Leisure and over 11% in Airlines, while another product PowerShares Dynamic Leisure and Entertainment Portfolio (NYSEARCA: PEJ ) invests about 5% each in Carnival and the online travel company Expedia (NASDAQ: EXPE ), and about over 10% in two airlines. Investors might thus view these two ETFs for potential losses. Airlines Needless to say, lower tourism means lower air travel. Though the impact of the attack is likely to be short-lived, travelers might take some more time to get back to their previous euphoria, shrugging off all fears. The Russian plane crash in October also point to this fact. The pure play Airline ETF U.S. GLOBAL JETS ETF (NYSEARCA: JETS ) could thus see losses in the coming days. JETS lost over 2.6% in the last five days (as of November 17, 2015). Original Post
Prudential Launches Global Absolute Return Bond Fund
By DailyAlts Staff Prudential Investments has a reputation for being a “blue-chip” or conservative asset manager – it even has the word “prudent” right in its name. With those who suggest unconstrained or absolute-return bond funds are inherently imprudent or especially risky, Prudential would beg to differ – the firm’s lineup of so-called “nontraditional” bond funds recently extended to three with the launch of the Prudential Global Absolute Return Bond Fund (MUTF: PAJAX ). The Prudential Global Absolute Return Bond Fund is essentially the international version of the well-established Prudential Absolute Return Bond Fund (MUTF: PADAX ). Both funds have an “absolute return” mandate, which means they pursue long-term positive returns, regardless of market conditions. What makes the new fund different is that it keeps at least 40% of its assets invested in foreign securities, including those from emerging markets. Prudential’s new fund is managed by Michael Collins, Robert Tipp, and Arvind Rajan, all of whom are managing directors at the firm. Mr. Collins is also Prudential’s Senior Investment Officer, while Mr. Tipp is Chief Investment Strategist and Head of Global Bonds, and Mr. Rajan is Head of Global Macro. Together, the three portfolio managers invest the new fund’s assets in a wide variety of asset classes – including bonds and other debt instruments, mortgage- and asset-backed securities, currencies, and derivatives – in pursuit of its investment objectives. They also target the fund’s “dollar-weighted effective duration” at -5 to +5 years. As stated earlier, this is at least the third nontraditional bond fund in Prudential’s lineup – the others include the Prudential Unconstrained Bond Fund (MUTF: PUCAX ) and the previously mentioned PADAX. PUCAX, which launched on July 9 of this year, had respective one- and three-month returns of +2.02% and -0.59%, through October 31, ranking in the top 8% and 36% Morningstar’s Nontraditional Bond category for the respective periods. PADAX, which debuted in March of 2011, returned +0.93% and -0.52%, respectively for the one and three months ending October 31, but a more impressive +1.27% (annualized) for the three years ending this most recent Halloween. Shares of the new Prudential Global Absolute Return Bond Fund are available in A (PAJAX), C (MUTF: PAJCX ), Q (MUTF: PAJQX ), and Z (MUTF: PAJZX ) classes. A and C shares have respective net-expense ratios of 1.20% and 1.95%, while Q and Z shares both have fees of 0.95%. Both A and C shares have minimum initial investments of $2,500, while Q and Z shares have no minimum for qualifying investors. For more information, view a copy of the fund’s prospectus . Past performance does not necessarily predict future results.