Tag Archives: investing

3 Best-Rated Diversified Bond Mutual Funds To Keep An Eye On

Diversified bond mutual funds provide excellent opportunities to investors looking for steady returns with a relatively low level of risk. These funds provide exposure to a wide range of market sectors, thus reducing sector-specific risks. A relatively higher level of liquidity also makes diversified bond funds more attractive. Meanwhile, investing in diversified bond funds is preferred to investing in individual bonds, as building a portfolio of the second type may prove more expensive than the former. Below, we share with you three best-ranked diversified bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all diversified bond mutual funds, investors can click here . PIMCO Income Fund A (MUTF: PONAX ) seeks maximum current income. The fund invests a minimum of 65% of its assets in fixed-income securities from a wide range of sectors. These securities may include options, futures contracts and swap agreements. PONAX may invest not more than half of its assets in securities that are rated below investment grade. It has a three-year annualized return of almost 4%. As of December 2015, the fund held 4022 issues, with 7.76% of its total assets invested in Irs Usd 2.75000 06/17/15-10y Cme. Nuveen Preferred Securities Fund A (MUTF: NPSAX ) invests a major portion of its assets in preferred securities. The advisor invests a minimum 25% of its assets in the preferred securities of companies primarily involved in financial services. NPSAX invests a minimum of half of its assets in securities rated investment grade. It is a non-diversified fund and has a three-year annualized return of 4.3%. The fund has an expense ratio of 1.06%, as compared to the category average of 1.37%. PIMCO Fixed Income Shares C (MUTF: FXICX ) seeks to maximize total return with preservation of capital. It invests the majority of its assets in fixed-income securities, including corporate debt obligations, inflation-indexed securities of corporate bodies and structured notes. The fund allocates its assets throughout the globe. It has a three-year annualized return of 0.9%. Curtis A. Mewbourne has been the fund manager of FXICX since 2009. Original Post

Microsoft Decides to Support U.S.-EU Data Privacy Shield

Microsoft CorporationMSFT became the first U.S. tech company to publicly support the Privacy Shield, a new transatlantic data transfer deal struck by the U.S. Department of Commerce and European Commission. The new deal is aimed at providing greater security

Pain Or Gain Ahead For Bank ETFs?

The going has been tough for bank ETFs for quite some time now mainly due to the twin attacks of a delay in further Fed rate hikes after a liftoff in December and the energy sector lull. Moreover, UBS Group AG’s (NYSE: UBS ) moderate earnings for the fourth quarter of 2015 triggered a sell-off in banking stocks because the bank pointed to several macroeconomic headwinds and geopolitical issues that will bother its operations in the near term. Not only banking stocks, broad-based risk-on sentiments took a backseat in the first quarter of 2016. Now, with the earnings season impending and the broader markets rebounding, albeit slowly, let’s catch a glimpse of the looming headwinds and tailwinds to the banking sector. Headwinds Tightening Yields: The benchmark U.S. 10-year Treasury note yield slipped to 1.76% on April 6, 2016 (down 48 since the start of the year) while the yield on the short-term Treasury note (one year of maturity) fell to 0.55% on the same day (down just 6 bps since the beginning of 2016). The narrowing gap between the short and long-term yields has been a cause of concern for the backing sector (read: Bank ETFs Hurt by the Dovish Fed ). In fact, in early March, the spread between the two-year and 10-year Treasury yields tapered the most since 2009. Narrowing spread between long- and short-term rates hurts net interest margin, which a key metric for the banking sector. Energy Sector Exposure: U.S. banks have significant exposure to the long-ailing energy sector where chances of credit default are higher. In February, the S&P cut its outlook on several regional banks with the highest energy sector exposure citing a likely increase in non-performing assets. Among the biggies, Wells Fargo (NYSE: WFC ) reported around $42 billion oil and gas credit in February. The situation is the same for JPMorgan (NYSE: JPM ), the energy loan of which accounts for 57% of the investment-grade paper. JPMorgan has ‘ set aside $600 million’ for loan losses emanating from the energy, metals and mining sectors. Panama Papers Scandal: The leaked documents from Panama Law firm Mossack Fonseca & Co. revealing global business leaders and officials moving money to international tax havens may take a toll on bank stocks. Banks may now face more stringent scrutiny and litigation issues to arrest means of evading taxes. Tailwinds Increased Activity: Having described the stress situation, we would like to note that fears of a 2008-like recession or financial market crash are perhaps exaggerated. The lower interest rates should boost capital market activities and benefit banks in other ways. After all, bank stocks have gained their lost ground in the U.S. in a rock-bottom interest rate environment (see all Financials ETFs here). Compelling Valuation: The finance sector has a current-year P/E of 12.6 times, reflecting a 27.6% discount to the S&P while its next-year P/E stands at 11.5 times, reflecting a 25.3% discount to the S&P 500. Such an intriguing valuation might also help the sector to score gains as and when favorable industry dynamics hit the space. ETF Impact All in all, bank stocks are on the fence with pain and gain on either side, though downside risks look higher at the current level. So, investors seeking a financial sector exposure can have a look at the following ETFs: The PowerShares KBW Bank Portfolio ETF (NYSEARCA: KBWB ) , with considerable exposure to Wells Fargo, JPMorgan and US Bancorp (NYSE: USB ). The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook. SPDR S&P Bank ETF (NYSEARCA: KBE ) also has similar holdings; but it holds stocks in an equal-weighted manner. No stock accounts for more than 2.19% of the fund and diversifies stock-specific risks pretty well. KBE has a Zacks ETF Rank #3 with a High risk outlook. SPDR S&P Regional Banking ETF (NYSEARCA: KRE ) takes into account companies that do business as regional banks or thrifts. KRE also has a Zacks ETF Rank #3. iShares MSCI Europe Financials Sector Index ETF (NASDAQ: EUFN ) measures the combined equity market performance of the financial sector of developed market countries in Europe. The fund has a Zacks ETF Rank #3. Link to the original post on Zacks.com