Tag Archives: investing

Reasons To Bet On Gold Mining ETFs Now

Gold Mining ETFs have been firing on all cylinders lately thanks to the dual favor by a dovish Fed and an aggressive China. The Fed seems to be in no hurry to hike interest rates this year and has hinted at just two hikes this year dampening the greenback and propelling the broader commodities including gold. In fact, a volatile market outlook, which is making places for safe-haven assets like gold and a sagging dollar, led the gold bullion to rally hard this year. Gold bullion ETF SPDR Gold Shares (NYSEARCA: GLD ) has surged 18.3% so far this year (as of April 11, 2016), enjoying the largest first-quarter gain in three decades. Along with the underlying metal gold, gold mining ETFs also put up great gains as these often trade as leveraged plays on gold. Plus, Chinese gold miners are hunting for lucrative foreign acquisitions thanks to lower gold prices so that they can acquire assets at a bargain, as per Wall Street Journal. Wall Street Journal also reported that “if cash-rich Chinese gold miners embark on an asset-buying spree, China could reduce its dependency on other international producers for supplies and increase its heft in global gold markets. Since many global gold mining companies are facing hard times due to years of low gold prices, these are appearing as lucrative acquisition targets of Chinese buyers. China is the world’s top gold consumer, accounting for about one-third of the global demand. So, its interest in gold acquisition is self-explanatory. In 2015, Barrick Gold Corporation (NYSE: ABX ) offloaded a 50% interest in Barrick (Niugini) Limited (BNL) to Chinese mining company Zijin Mining Group Co. Ltd. ( OTCPK:ZIJMF ) for a total cash consideration of $298 million. Apart from Zijin, another company Zhaojin Mining Industry Co. Ltd. ( OTCPK:ZHAOF ) is mulling over the idea of an overseas gold mining acquisition, as per Wall Street Journal. Several gold mining ETFs hit a 52-week high on April 11. Among them, we highlight five ETFs below that exhibited strong pricing gains. The Weighted Alpha of most of these ETFs hovered around positive 50 , indicating the possibility of further gains. Global X Gold Explorers ETF (NYSEARCA: GLDX ) The fund seeks to match the performance and yield of the Solactive Global Gold Explorers Index. The $39.2-million ETF charges 65 bps in annual fees and has a dividend yield of 7.58% (as of April 11, 2016). First Mining Finance ( OTCQB:FFMGF ), Seabridge Gold (NYSE: SA ), and Oceanagold Corp. ( OTCPK:OCANF ) command the top three positions in the basket. Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ ) This one tracks the Market Vectors Junior Gold Miners Index, which provides exposure to small- and medium-capitalization companies that generate at least 50% of their revenues from gold and/or silver mining. The $1.97-billion product charges 55 basis points in annual fees with a paltry annual dividend yield of 0.46%. B2Gold Corp. (NYSEMKT: BTG ), Alamos Gold Inc. (NYSE: AGI ) and Centamin PLC ( OTCPK:CELTF ) occupy the top three positions in the 49-stock fund. ALPS Sprott Junior Gold Miners ETF (NYSEARCA: SGDJ ) SGDJ seeks to deliver exposure to the Sprott Zacks Junior Gold Miners Index. Each stock’s weighting in the index is based on two factors, namely revenue growth and price momentum. The $34.3-million ETF charges investors 57 basis points on an annual basis. Among individual holdings, Sibanye Gold Ltd. (NYSE: SBGL ), Detour Gold ( OTCPK:DRGDF ) and Tahoe Resources (NYSE: TAHO ) occupy top three spots in the fund. iShares MSCI Global Gold Miners (NYSEARCA: RING ) The fund seeks the MSCI ACWI Select Gold Miners Investable Market Index. The $103-million ETF charges 39 basis points a year. The fund currently has 29 companies in its basket, with the top stocks being Barrick Gold Corp. ( ABX ), Newmont Mining Corp. (NYSE: NEM ) and Goldcorp Inc. (NYSE: GG ). Sprott Gold Miners ETF (NYSEARCA: SGDM ) SGDM tracks the Sprott Zacks Gold Miners Index, which is a rules-based index that assigns weighting to a stock on the basis of fundamental factors like revenue growth and balance sheet strength. This $173-million ETF charges 57 bps in fees. The fund currently holds 25 stocks. Among individual holdings, Franco-Nevada Corporation (NYSE: FNV ), Goldcorp Inc. ( GG ) and Agnico Eagle (NYSE: AEM ) comprise 40% of the portfolio. Original Post

UnitedHealth Solid Q1 Earnings Put These ETFs In Focus

The largest U.S. health insurer, UnitedHealth Group (NYSE: UNH ), reported solid first-quarter 2016 results. The company continued its long streak of earnings beats. Earnings per share came in at $1.81, surpassing the Zacks Consensus Estimate by 9 cents and the year-ago earnings by 17%. Revenues rose 25% year over year to $44.5 billion, broadly in line with the Zacks Consensus Estimate of $44.7 billion. The company reported medical care ratio of 81.7%, up 30 basis points year over year, thanks to the extra calendar day of service in the quarter. Growth was broad based, with a 54% increase in revenues for Optum, the health services business (see all the Healthcare ETFs here ). Based on solid first-quarter results and business trends, UnitedHealth raised its earnings guidance to $7.75-7.90 per share for 2016 from $7.60-7.80 per share projected earlier. The Zacks Consensus Estimate of $7.85 per share is within the guided range. The company expects revenues to be approximately $182 billion in 2016, which is in line with the current Zacks Consensus Estimate. As a result, the stock jumped 4.8% in the last two trading days (as of April 20, 2016), following the earnings announcement. The stock currently has a Zacks Rank #2 (Buy) with a Value Style Score of “A”. This underscores its potential to outperform in the weeks ahead. In its conference call, UnitedHealth stated that it would pull out of the majority of public exchanges owing to smaller overall market size and a higher risk profile within this market segment. Next year, the company plans to remain in only a few of the states and will not carry any financial exposure from the exchanges into 2017. ETFs in Focus Investors may want to take a closer look at the ETFs having the largest allocation to this health insurance giant, as UNH has shown encouraging trading following its earnings. For those, the iShares U.S. Healthcare Providers ETF (NYSEARCA: IHF ) could especially be on their radar, as UNH takes the top spot in the fund’s portfolio at 12.9% share. IHF This ETF provides exposure to 49 companies offering health insurance, diagnostics and specialized treatment by tracking the Dow Jones U.S. Select Healthcare Providers Index. About 45% of the portfolio is dominated by managed care firms, while healthcare services (26.5%) and healthcare facilities (23.3%) round off the top three. The fund has amassed $709.6 million in its asset base, while volume is good at about 112,000 shares per day, on average. It charges 44 bps in annual fees and expenses, and added 1.9% in the last two trading days following the UNH earnings release (as of April 20, 2016). The product has a Zacks ETF Rank of 1 or “Strong Buy” rating with a Medium risk outlook. Other ETFs Other healthcare ETFs, like the Health Care Select Sector SPDR ETF (NYSEARCA: XLV ) – 4.6%, the iShares U.S. Healthcare ETF (NYSEARCA: IYH ) – 4.3%, the PowerShares DWA Healthcare Momentum Portfolio ETF (NYSEARCA: PTH ) – 3.8%, the Fidelity MSCI Health Care Index ETF (NYSEARCA: FHLC ) – 3.9% and the Vanguard Health Care ETF (NYSEARCA: VHT ) – 4.1%, also have a decent exposure to UnitedHealth. Apart from the healthcare space, UNH is among the top 10 holdings in some large cap ETFs, such as the SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA ) and the PowerShares Dynamic Large Cap Growth Portfolio ETF (NYSEARCA: PWB ), with exposure of 4.9% and 3.4%, respectively. However, these products will be less impacted by the movement of UNH share price. Original Post