Tag Archives: feeds

Beat An Index Fund: 10 Ways You Can Outperform The Market

By Rupert Hargreaves It’s no secret that active investment managers have always struggled to outperform indexes, and this knowledge has sparked an explosion in the demand for low-cost index-tracking products. While this approach does ensure that your returns will be similar to those of the index, it also stops you from beating the market. If you have the time to conduct detailed investment research yourself, there’s no need to consign yourself to these average returns. Beating the index (whichever one you’re following) is possible if you’re willing to put in the effort, and this is something Tweedy, Browne recently looked at in one of their investing booklets titled, ” 10 Ways To B eat An Index: How Tweedy, Browne Strives to Provide Value Above the Index Return .” Click to enlarge 10 ways to beat an index Choose stocks with appealing investment characteristics that have produced market-beating returns in the past. Cover the entire market universe: Do not eliminate stocks from the research process that are either too big or too small. Significant undervaluation offer occurs among smaller companies that aren’t covered by Wall Street. Statistics and specifics: Conduct one-at-a-time specific company research that generates value-related, forward-looking information as well as insights that are not available elsewhere, coupled with statistical thinking about investments that is likely to lead to above-market returns on a diversified basis. No index mimicking: Focus on stocks with robust prospective return characteristics rather than attempting to beat the index by mimicking its composition. Stay as fully invested as possible: Research has shown that 80-90% of investment returns have occurred in spurts that amount to 2-7% of the total length of time of the holding period. The rest of the time the returns have been small. To quote Tweedy, Browne, “With stocks, you have to be in to win”. Keep turnover low: Low turnover reduces commission and tax costs as a percentage of the portfolio’s overall value. Keep transaction costs low (see above). Act like an owner: Follow Benjamin Graham’s advice that by buying shares you are buying a stake in the business, not a lottery ticket. Focus, focus, focus: Pay attention to your existing investments as well as potential new investments. Be aware of any changes in underlying business fundamentals and the competitive environment. Continuous improvement: When it comes to investing, you can never know enough, and by increasing your knowledge of investment characteristics and patterns associated with above-market returns, you’ll be able to understand what works in various market conditions and be prepared for any developments the market may choose to throw your way. Constantly sifting through the vast volumes of information out there on equities and equity markets will help you gain awareness of the best strategies, investments, opportunities, and indicators that are available to help you optimise your performance grow your wealth and beat the index. Disclosure: None.

Alternative ETFs To Gain On First Solar’s Q4 Beat

Leading U.S. solar-panel manufacturer First Solar (NASDAQ: FSLR ) reported its fourth-quarter 20 15 results after the closing bell yesterday. The company beat our estimates on earnings and revenues, but lowered its sales guidance for 20 16 that remains much above our estimate. Earnings per share came in at $ 1.60, which comfortably surpassed the Zacks Consensus Estimate of 80 cents, but declined 15.3% from the year-ago quarter. Revenues decreased 6.5% year over year to $942 million, but edged past our estimate of $93 1 million. For 20 16, the company maintained its earnings per share guidance of $4.00-4.50, but slashed its revenue outlook to $3.8-4.0 billion from $3.9-4. 1 billion. The midpoints of both the guided earnings and revenues are much higher than the current Zacks Consensus Estimate of $4. 10 and $3.78 billion, respectively. Shares of this thin-film solar PV maker rose 2.9% in the after-market hours. The stock currently has a Zacks #3 (Hold) with a solid Value Style Score of B and a robust industry rank in the top 6%, suggesting a bright near term. ETFs in Focus Following the earnings beat, the ETFs having larger allocations to this solar giant have been in focus and could make great plays over the coming days. Below we have highlighted them: Market Vectors Solar Energy ETF (NYSEARCA: KWT ) This fund manages $ 14.4 million in its asset base and provides global exposure to 29 solar stocks by tracking the Market Vectors Global Solar Energy Index. Here, FSLR takes the top spot with a 10% allocation. In terms of country exposure, U.S. and China account for the top two countries with 34.9% and 24.9% share, respectively, closely followed by Taiwan ( 18.3%). The product has an expense ratio of 0.65% and sees a paltry volume of about 2,000 shares a day. The ETF has lost 23% in the year-to-date time frame. First Trust NASDAQ Clean Edge Green Energy Index ETF (NASDAQ: QCLN ) This fund provides exposure to the U.S. clean energy companies across a wide range of industries, including solar power, biofuels, advanced batteries, as well as the installation of new technological systems. It tracks the NASDAQ Clean Edge Green Energy Index and manages assets worth $65.5 million. It charges 60 bps in fees per year while the volume is light at nearly 24,000 shares. In total, the product holds 45 securities with FSLR being the top firm, accounting for 9.6% of its basket. From a sector look, technology firms dominate this ETF, accounting for nearly 30% of assets while oil & gas companies take another one-fourth share. QCLN has shed 16% so far this year and has a Zacks ETF Rank of 3 with a High risk outlook. Market Vectors Global Alternative Energy ETF (NYSEARCA: GEX ) This ETF provides global exposure to stocks that are primarily engaged in the business of alternative energy by tracking the Ardour Global Index. The fund holds about 3 1 stocks in its basket with an AUM of $84. 1 million while charging 62 bps in fees per year. Average daily volume is paltry for this fund at around 8,000 shares. First Solar occupies the fourth position in the basket with an 8.6% share. From a sector perspective, industrials takes the largest share at 47. 1% while information technology (29.7%) and utilities ( 13.4%) round off the next two spots. In terms of country exposure, the fund is skewed toward the U.S. with a 50.8% share followed by Denmark and China. The ETF has lost 12.4% in the same period. iShares S&P Global Clean Energy Index ETF (NASDAQ: ICLN ) This fund provides global exposure to 3 1 clean energy stocks, including solar, wind and other renewable sources, by tracking the S&P Global Clean Energy Index. Out of these, FSLR occupies the top spot at 7.62% of assets and charges 48 bps in annual fees and expenses. It has amassed just $75.3 million in its asset base while volume is also light at about 38,000 shares. U.S. and China take the top two spots in terms of country exposure with 24.7% and 23.5% share, respectively. The ETF is down about 16.4% in the year-to-date time frame. Guggenheim Solar ETF (NYSEARCA: TAN ) This ETF follows the MAC Global Solar Energy Index, holding 29 stocks in the basket. First Solar occupies the top position with 7.7% share. American firms dominate the fund’s portfolio with nearly 55.9% share, followed by China ( 17.9%) and Hong Kong ( 15%). The product has amassed $22 1.6 million in its asset base and trades in solid volume of more than 196,000 shares a day. It charges investors 70 bps in fees per year. The fund has lost 28.3% in the year-to-date time frame and has a Zacks ETF Rank of 3 or “Hold” rating with a High risk outlook. Original post

How Big Is Managed Futures’ AUM, Exactly?

By The Alts Team We tweeted the other day that Managed Futures mutual funds had seen 20 straight months of inflows, and that got us to thinking it was high time to do our annual look at how many assets there are under management in the managed futures industry. Now, for those who don’t know – we have a bit of a problem with the usual numbers reported as assets under management in the space by BarclayHedge, who include the world’s largest hedge fund Bridgewater in the managed futures asset total. In our opinion, this does a disservice to investors, vendors, and business people in the industry trying to gauge the size of the space and where they fit into it. Add to that the fact that Winton is a $30 Billion+ manager who tends to dominate the asset raising in the space, and it’s not too big of a stretch to say the majority of assets as reported by BarclayHedge are from just two firms (Bridgewater and Winton). That’s led us to pick apart the numbers a bit and report what the “real” assets and asset growth look like without those two stalwarts (one of which is not managed futures based at all). Without further ado, here’s what the rest of the space looks like: What about the Growth in assets: Here’s where things get interesting, because while stripping out Bridgewater and Winton in years past showed a shrinking industry (the “field”) without those two big dogs, 2015 showed quite the opposite. The so-called “field” added around $18 Billion in 2015 (22% growth), although we can see from the graphic that assets are still down from their 2008 levels with the growth just negative since then. Assets of “the field” grew by 22% in 2015. Assets of “the field” is still down $4 Billion since ’08. “The field” raised $22 Billion in the final 3 quarters of ’15. AQR is, for now, a member of our ‘field’, but at $10.9 Billion and $2.6 billion raised in 2015, may need to be split out in the near future. What’s the takeaway? The larger takeaway is that investors who seemingly forgot about the 2008 financial crisis and how well managed futures do in such periods are starting to remember where they put the diversification keys… and are starting to put real money to work with real managers , not just the Wintons and AQRs of the world – who need more assets like a hole in the head. Here’s to more growth ahead, not just from investors allocating funds, but from the managers multiplying those funds via their trading strategies as well.