Tag Archives: etfs

The Best And Worst Of January: Managed Futures

Managed futures mutual funds and ETFs bounced back in January after having a tough month in December. In the first month of 2016, managed futures funds, including “CTAs” (commodity trading advisors), averaged gains of 2.05%. This, in a month when U.S. stocks, commodities and high-yield bonds all saw large drawdowns. Managed futures strategies have often been referred to as “crisis alpha”, and January’s performance shows why they have been labeled as such. Over the three years ending January 31, funds in the category generated average annualized returns of +3.36%. These returns were comprised of -1.79% annualized alpha and 0.58 beta relative to Credit Suisse Managed Futures Liquid TR USD Index. Top Performers in January The three best-performing managed futures mutual funds in January were: Equinox Funds dominated the managed futures category in January, occupying all three of the top spots. EBCIX, EQIPX, and MHFAX generated respective one-month gains of 6.81%, 6.17%, and 6.09% in January, greatly outperforming the category average of 2.05% Of the three funds, only MHFAX has been around for at least three years, and its three-year annualized returns through January 31 stood at +4.64%, ranking in the top 30% of the category. The fund’s three-year Sharpe ratio, a measure of risk-adjusted returns, was 0.51, compared to 0.34 for the category. Its three-year standard deviation, measuring volatility, stood at 9.69%, compared to the category average of 9.01%. MHFAX’s three-year alpha of -1.79% was equal to the category average, while its beta of 0.73 was higher than the category’s 0.58. Category leader EBCIX and #2 fund EQIPX launched in June 2014 and July 2015, respectively. EBCIX had one-year returns of 6.02% through January 31, ranking in the top 8% of the category. EQIPX was launched too recently for annual returns, but its six-month gains through January 31 stood at 4.69%, ranking in the top 6% of the category. Worst Performers in January The three worst-performing managed futures mutual funds in January were: TVTAX was by far January’s worst-performing managed futures fund, returning -7.02%. The fund, which launched in November 2014, had one-year returns of -13.93% through January 31, ranking in the bottom 7% of the category. Although they were the second- and third-worst performers in the category, FCMLX and DNASX’s January losses were considerably lighter than that of TVTAX, at 2.95% and 2.96%, respectively. Both FCMLX and DNASX launched long enough ago to have three-year returns, alphas, betas, Sharpe ratios, and standard deviations: FCMLX had three-year annualized losses of 2.61%, with a three-year alpha of -5.99%, beta of -0.03, a Sharpe ratio of -0.19, and standard deviation of 11.03%. DNASX’s respective stats were -1.42%, -1.09%, 0.42, -0.24, and 5.54%. Past performance does not necessarily predict future results. Jason Seagraves contributed to this article.

Retail ETFs To Watch Ahead Of Q4 Results

The Q4 earnings season has been weak across all sectors with growth harder to come by in a slowing global economy, a stronger U.S. dollar, and weakness in oil. In fact, Q4 may be the third quarter in a row of negative earnings growth. However, with about half of the Q4 reports yet to come, retail is faring better than many other sectors. Total earnings for the retail sector that has reported so far are up 6.8% on 11.8% revenue growth. Notably, revenue growth of this sector has been the best so far this season. This is especially true given the robust numbers from retailers like Whole Foods Market (NASDAQ: WFM ), Yum! Brands (NYSE: YUM ) and Michael Kors (NYSE: KORS ). The strength is likely to continue when the big retailers like Wal-Mart (NYSE: WMT ) and Nordstrom (NYSE: JWN ) reports earnings results tomorrow. Other major retailers such as Home Depot (NYSE: HD ), Macy’s (NYSE: M ), Lowe’s (NYSE: LOW ), Target (NYSE: TGT ), Gap Inc. (NYSE: GPS ), and Kohls (NYSE: KSS ) release earnings reports next week. Solid Trends Though consumer spending, which accounts for more than two-thirds of U.S. economic activity, moderated in the final quarter of 2015 buoyed by more savings, it started regaining momentum lately as consumers began to reap the benefits of a slow but recovering economy, better job and wage prospects, and a lower oil price. As a result, retail sales edged up 0.2% in January, better than the market’s expectation of 0.1% growth. Further, U.S. consumer confidence is improving, as measured by the Conference Board. The Consumer Confidence Index jumped to 98.1 in January from a revised 96.3 in December while the index of consumer expectations for the next six months climbed to 85.9 in January from 83. Moreover, the upside to this segment could be confirmed by the Zacks Industry Rank, as three-fifths of the industries falling under this segment have a solid Rank in the top 42% at the time of writing. ETFs to Buy Given encouraging fundamentals and a spate of earnings releases this week and in the next, investors should carefully watch the movement in retail stocks and could consider a broad play via ETFs in order to take advantage of the power-packed earnings releases seen so far and solid trends. For this, looking at some of the top-ranked retail ETFs having a Zacks ETF Rank of 1 (Strong Buy) or 2 (Buy) could be excellent picks as these funds have potentially superior weighting methodologies, which could allow them to outperform in the coming months. SPDR S&P Retail ETF (NYSEARCA: XRT ) This product tracks the S&P Retail Select Industry Index, holding 100 securities in its basket. It is widely spread across each component as none of these holds more than 1.48% of total assets. Small cap stocks dominate nearly three-fifths of the portfolio while the rest have been split between the other two market cap levels. In terms of sector holdings, apparel retail takes the top spot at one-fourth share while specialty stores, automotive retail and Internet retail also have double-digit allocations each. XRT is the most popular and actively traded ETF in the retail space with AUM of about $404.5 million and average daily volume of more than 4.3 million shares. It charges 35 bps in annual fees and gained 3.8% over the past one month. The fund has a Zacks ETF Rank of 1. Market Vectors Retail ETF (NYSEARCA: RTH ) This fund tracks the Market Vectors US Listed Retail 25 Index and holds about 26 stocks in its basket. It is a large cap centric fund and is heavily concentrated on the top 10 holdings with 64.1% of assets. The largest allocations go to Amazon.com (NASDAQ: AMZN ), Home Depot and Wal-Mart. Sector wise, specialty retail occupies the top position with less than one-third share, followed by double-digit allocation to Internet and catalogue retail, hypermarkets, drug stores, departmental stores and healthcare services. The fund has amassed $151 million in its asset base while average daily volume is moderate at about 77,000 shares. Expense ratio came in at 0.35%. The product lost 0.7% over the past one month and has a Zacks ETF Rank of 2. PowerShares Dynamic Retail Portfolio ETF (NYSEARCA: PMR ) This retail fund provides a diversified exposure across various market caps with 45% in large caps, 43% in small caps and the rest in mid caps. This is easily done by tracking the Dynamic Retail Intellidex Index. The fund has accumulated just $21.4 million in its asset base while it trades at a light volume of under 5,000 shares a day. The ETF charges 63 bps in fees per year. In total, the product holds 29 securities with none accounting for more than 6.12% of assets. In terms of industrial exposure, specialty retail takes the top spot at 48%, while food retail (19%) and drug stores (12%) round off the top three positions. PMR is relatively flat over the past one month and has a Zacks ETF Rank of 2. Original Post

4 Best-Rated Utility Mutual Funds For Stable Returns

Investors with a conservative mindset looking for stable current income would do well to consider utility funds. They are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times. In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also generated higher returns. Below, we will share with you 4 top-rated utility mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect these mutual funds to outperform their peers in the future. AllianzGI Global Water Fund A (MUTF: AWTAX ) seeks long-term capital growth. AWTAX invests a major portion of its assets in common stocks of companies that are represented in the S&P Global Water Index, the NASDAQ OMX US Water or Global Water Indices or the S-Network Global Water Index, or are involved in water-related activities. AllianzGI Global Water A is a non-diversified fund and has a three-year annualized return of 3.6%. Andreas Fruschki is the fund manager since 2008. Kinetics Alternative Income Fund C (MUTF: KWICX ) invests a large portion of its assets in the Alternative Income Portfolio, a series of Kinetics Portfolios Trust that holds a portfolio of primarily fixed-income securities. KWICX seeks to provide current income. Kinetics Alternative Income Fund C is a non-diversified fund and has a three-year annualized return of 1.3%. As of September 2015, KWICX held 327 issues, with 11.58% of its total assets invested in the iShares 1-3 Year Credit Bond. American Century Utilities Fund Inv (MUTF: BULIX ) seeks current income and capital appreciation. BULIX invests a major portion of its assets in equities related to the utility industry. BULIX’s portfolio is based on qualitative and quantitative management techniques. In the quantitative process, stocks are ranked on their growth and valuation features. American Century Utilities Fund is a non-diversified fund and has a three-year annualized return of 9.9%. BULIX has an expense ratio of 0.67% as compared to the category average of 1.25%. Putnam Global Telecommunication Fund B (MUTF: PGBBX ) invests a large portion of its assets in both mid and large capitalization companies across the world. PGBBX generally invests in securities of companies that are part of the telecommunication industry. Putnam Global Telecommunication B is a non-diversified fund and has a three-year annualized return of 6.5%. Vivek Gandhi is the fund manager since 2008. Original post