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3 Mid Cap Growth ETFs To Buy For Q4

Increasing uncertainty pertaining to the China turmoil, global growth worries, slumping commodities and timing of the interest rates hike in the U.S. are general concerns. In this backdrop that has lasted for quite some weeks now, the broader U.S. market has trapped itself in a nasty web of trading. While the U.S. economy is on a firmer footing, calling for a rates hike sometime later in the year, the fundamentals in other developed and developing markets are deteriorating. This is especially true given the slowdown in Japan, sluggishness in Europe, technical recession in Canada and weak growth in emerging markets. Additionally, investors are wary of third-quarter earnings, which are expected to drop 5.8% on 3.9% lower revenues for the S&P 500 index, as per the Zacks Earnings Trends . Moreover, the ongoing battle over the funding for Planned Parenthood between Republicans and Congress could lead to the possible shutdown of the federal government at the end of the month. All these conditions are increasing the volatility in the market, putting the stocks’ returns at risk. However, the bullish sentiment for U.S. stocks remains intact given the substantial improvement in the economy and a healing job market. In such a scenario, investors seeking to participate in the growing economy, but are worried about uncertainty, should consider mid-cap stocks in the basket form. Why Mid Caps? While large companies are normally known for stability and smaller ones for growth, mid caps offer the best of both the worlds, allowing growth and stability in portfolios simultaneously. These middle-of-road securities are arguably safer options and have the potential to move higher in turbulent times, especially if political issues or financial instability creeps into the picture. Further, honing in on growth securities in this capitalization level allows investors to earn more returns. This is because growth stocks refer to those high quality stocks that are likely to witness revenues and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in rocketing share prices. There are currently a number of ways to tackle this overlooked part of the market segment through ETFs, giving exposure to various styles including broad, value and growth. With such a large number of choices, it may be difficult to choose the right funds. After all, many of these products target the same securities though they have different tilts, weighting schemes or focus for their portfolios. How to Pick Right ETFs? One way to narrow down the list is to utilize the Zacks ETF Rank. This system looks to find the best ETFs in a given market segment based on a number of factors such as industry outlook and expert surveys; and then apply ETF-specific factors (like expense ratios and bid/ask spreads). And given the rise of the outlook for mid caps of late, it shouldn’t be too surprising that a few have moved to the top Zacks ETF Rank of 1 (Strong Buy) from Zacks ETF Rank 2 (Buy) or 3 (Hold) in the latest ratings’ update. Below, we have highlighted these three surging funds in brief detail for investors seeking a way to make a great play on the overlooked mid cap growth space in basket form: Vanguard Mid-Cap Growth ETF (NYSEARCA: VOT ) This fund follows the CRSP US Mid Cap Growth Index. Holding 177 securities in its basket, it is highly diversified across each component with none holding more than 1.5% share. In terms of sector exposure, industrials occupies the top position at 19.3%, followed by consumer services (19.2%), technology (14.7%), and consumer goods (14.2%). The product has managed nearly $3.4 billion in its asset base and trades in moderate volume of around 177,000 shares. Expense ratio came in at 0.09%. VOT has lost 1.6% in the year-to-date timeframe. iShares Morningstar Mid-Cap Growth ETF (NYSEARCA: JKH ) With AUM of $217.4 million, this product tracks the Morningstar Mid Growth Index. In total, it holds 204 mid cap securities with none accounting for more than 1.53% of assets. Information technology, industrials, consumer discretionary, health care and financials are the top five sectors with double-digit exposure each. The ETF charges 30 bps in annual fees and trades in a light volume of less than 5,000 shares a day. It has shed 2.2% so far this year. Vanguard S&P Mid-Cap 400 Growth ETF (NYSEARCA: IVOG ) This ETF tracks the S&P MidCap 400 Pure Growth Index, charging investors 20 bps in fees per year. It has amassed $379.3 million in its asset base while sees a light volume of less than 13,000 shares. The fund holds 229 stocks with a well-diversified portfolio as each firm holds no more than 1.4% of total assets. However, it is skewed toward financials with one-fourth share while information technology, consumer discretionary, industrials and health care round of the top five. The ETF has gained 1.6% in the year-to-date timeframe. Link to the original article on Zacks.com

Q4 Outlook For Oil And Gas ETFs

Crude Oil The free fall in oil prices have made energy the most talked-about sector of the entire market in 2015, apart from the fact that its performance has been the worst. Year-to-date, The Energy Select Sector SPDR ETF (NYSEARCA: XLE ) has posted a loss of 20%. On the other hand, the broad-based Dow Jones Industrial Average and the S&P 500 index shed just 8% and 5%, respectively, over the same period. As of now, crude prices are trading just above the key psychological level of $40-a-barrel after hitting a new 6-1/2 year low of $37.75 recently. This, despite a short spike that saw the commodity scale a year-high of $61.43 per barrel in June. (Read: 4 Ways to Short the Energy Sector with ETFs ) Oil is facing the heat on several fronts. Perhaps, the most important of them pertains to the mounting worries about China’s crude demand. In particular, the Asian giant’s currency devaluation has stoked speculation about soft economic growth in the world’s No. 2 energy consumer. What’s more, in the absence of production cuts from OPEC, the effects of booming shale supplies in North America and a stagnant European economy, not much upside is expected in oil prices in the near term. Moreover, a stronger dollar has made the greenback-priced crude more expensive for investors holding foreign currency. The Iranian nuclear framework agreement, which has the potential to release more of the commodity in the already oversupplied market, has put the final nail in the coffin. As it is, with inventories near the highest level during this time of the year in 80 years at least, crude is very well stocked. On top of that, OPEC members (like Saudi Arabia) have made it clear time and again that they are more intent on preserving market share rather than attempting to arrest the price decline through production cuts. Therefore, the commodity is likely to maintain its low trajectory throughout 2015. (Read: Still Believe in Goldman’s $20 Oil, Go Short with These ETFs ) This has forced the oil companies and associated service providers to make deep cost cuts by reducing their workforce. Oilfield services behemoths like Halliburton Co. (NYSE: HAL ), Schlumberger Ltd. (NYSE: SLB ) and Weatherford International plc (NYSE: WFT ) were the first to respond to the worsening situation, announcing substantial redundancies earlier in the year. Of late, they have been joined by integrated majors including Royal Dutch Shell plc (NYSE: RDS.A ) and Chevron Corp. (NYSE: CVX ). In the medium-to-long term, while global oil demand will be driven by China – which continues to be the main catalyst to liquids consumption growth despite the current slowdown – this will be more than offset by sluggish growth prospects exhibited by Asian and the European economies. In our view, crude prices in the next few months are likely to exhibit a sideways-to-bearish trend, mostly trading in the $40-$50 per barrel range. As North American supply remains strong and demand looks underwhelming, we are likely to experience a pressure in the price of a barrel of oil. Natural Gas Over the last few years, a quiet revolution has been reshaping the energy business in the U.S. The success of ‘shale gas’ – natural gas trapped within dense sedimentary rock formations or shale formations – has transformed domestic energy supply, with a potentially inexpensive and abundant new source of fuel for the world’s largest energy consumer. With the advent of hydraulic fracturing (or “fracking”) – a method used to extract natural gas by blasting underground rock formations with a mixture of water, sand and chemicals – shale gas production is now booming in the U.S. Coupled with sophisticated horizontal drilling equipment that can drill and extract gas from shale formations, the new technology is being hailed as a breakthrough in U.S. energy supplies, playing a key role in boosting domestic natural gas reserves. As a result, once faced with a looming deficit, natural gas is now available in abundance. Statistically speaking, the current storage level – at 3.261 trillion cubic feet (Tcf) – is up 473 Bcf (17%) from last year and is 127 Bcf (4%) above the five-year average. Expectedly, this has taken a toll on prices. Natural gas peaked at about $13.50 per million British thermal units (MMBtu) in 2008 but fell to sub-$2 level in 2012 – the lowest in a decade. Though it has recovered somewhat, at around $2.70 now, the commodity is still way off the heights reached seven years back. In fact, natural gas been trading range bound over the last couple of quarters with investors looking for direction. It has been stuck between $2.50 and $3 per MMBtu over the past 5 months. In response to continued weak natural gas prices, major U.S. producers like Chesapeake Energy Corp. (NYSE: CHK ), Cabot Oil & Gas Corp. (NYSE: COG ) and Range Resources Corp. (NYSE: RRC ) have all taken significant cost-cutting measures, including a reduction in their capital expenditure budgets for the year. With production from the major shale plays remaining strong and the commodity’s demand failing to keep pace with this supply surge, natural gas prices have been held back. Even the summer cooling demand has been of little help. What’s more, with improved drilling productivity offsetting the historic decline in rig count, and expectations of tepid heating demand with the imminent arrival of soft late-summer temperature, we do not expect gas prices to rally anytime soon. Playing the Sector Through ETFs Considering the turbulent market dynamics of the energy industry, the safer way to play the volatile yet rewarding sector is through ETFs. In particular, we would advocate tapping the energy scene by targeting the exploration and production (E&P) group. This sub-sector serves as a pretty good proxy for oil/gas price fluctuations and can act as an excellent investment medium for those who wish to take a long-term exposure within the energy sector. While all oil/gas-related stocks stand to move with fluctuating commodity prices, companies in the E&P sector tend to be the most important, as their product’s values are directly dependent on oil/gas prices. (See all Energy ETFs here ) SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA: XOP ) Launched in June 19, 2006, XOP is an ETF that seeks investment results corresponding to the S&P Oil & Gas Exploration & Production Select Industry Index. This is an equal-weighted fund consisting of 73 stocks of companies that finds and produces oil and gas, with the top holdings being HollyFrontier Corp. (NYSE: HFC ), Tesoro Corp. (NYSE: TSO ) and PBF Energy Inc. (NYSE: PBF ). The fund’s expense ratio is 0.35% and pays out a dividend yield of 1.98%. XOP has about $1,472.9 million in assets under management as of Sep 10, 2015. iShares Dow Jones US Oil & Gas Exploration & Production ETF (NYSEARCA: IEO ) This fund began in May 1, 2006 and is based on a free-float adjusted market capitalization-weighted index of 74 stocks focused on exploration and production. The top three holdings are ConocoPhillips (NYSE: COP ), Phillips 66 (NYSE: PSX ) and EOG Resources Inc. (NYSE: EOG ). It charges 0.45% in expense ratio, while the yield is 1.77% as of now. IEO has managed to attract $403.5 million in assets under management till Sep 10, 2015. PowerShares Dynamic Energy Exploration and Production (NYSEARCA: PXE ) PXE, launched in Oct. 26, 2005, follows the Energy Exploration & Production Intellidex Index. Comprising of stocks of energy exploration and production companies, PXE is made up of 30 securities. Top holdings include Phillips 66, Valero Energy Corp. (NYSE: VLO ) and Marathon Petroleum Corp. (NYSE: MPC ). The fund’s expense ratio is 0.64% and the dividend yield is 2.20%, while it has got $92.9 million in assets under management as of Sep 10, 2015. Original Post

Playing With PIIGS: ETFs That Is

There are still pockets of weakness among the PIIGS (Portugal, Ireland, Italy, Greece and Spain),. Not surprisingly, the worst performer of the quintet has been GREK. Over the past two and a half months, yields on the benchmark Italian government bond have fallen about 65 basis points. By Todd Shriber, ETF Professor There are still pockets of weakness among the PIIGS (Portugal, Ireland, Italy, Greece and Spain), the countries previously and some still known as Europe’s problem children, but investors should not outright shun opportunity with the PIIGS. These Little PIIGS Went To Market Entering Tuesday, just two of the five PIIGS’ single-country exchange-traded funds – the iShares MSCI Ireland Capped ETF (NYSEARCA: EIRL ) and the iShares MSCI Italy Capped ETF (NYSEARCA: EWI ) – were higher on a year-to-date basis. Not surprisingly, the worst performer of the quintet has been the Global X FTSE Greece 20 ETF (NYSEARCA: GREK ) , which among other issues, has recently dealt with another market classification demotion and another national election. Although it is down more than 10 percent year-to-date, the iShares MSCI Spain Capped ETF (NYSEARCA: EWP ) is seen as one of the strongest individual PIIGS’ ETFs alongside EIRL, the Ireland ETF. “As for the Spanish ETF, it is valued at around 1.35 times book value, 20 basis points below the global average. The dividend yield of this ETF stands at around 3.8 percent, compared to the global benchmark average of 3.16 percent, according to Morningstar,” reported Barron’s . The European Central Bank’s rendition of quantitative easing, unveiled earlier this year, has reportedly been a boon for commercial real estate deals in Portugal and Spain. Should that trend continue, it could and should benefit EWP, an ETF that allocates nearly 42 percent of its weight to financial services stocks. That is more than two and a half times larger than EWP’s second-largest sector weight. Spanish stocks are also inexpensive. EWP’s P/E ratio is just below 16, implying a discount to the S&P 500 and the EURO STOXX 50 Index. Compelling valuations are one reason why investors have pumped $256.6 million into EWP this year. Over the past two and a half months, yields on the benchmark Italian government bond have fallen about 65 basis points, as some investors have warmed to the notion that lower oil prices and the weak euro will bolster Italian stocks while lifting the eurozone’s third-largest economy out of a recession. EWI, the largest Italy ETF trading in New York, entered Tuesday up 9.2 percent this year. “Gross domestic product is seen expanding 0.9 percent in 2015, up from 0.7 percent projected by the government in April, and then in 2016 more than the 1.3 percent previously forecast,” Bloomberg reported, citing Prime Minister Matteo Renzi. Investors have added $274.1 million to EWI this year. Only GREK has seen larger inflows among the PIIGS single-country ETFs. Another ETF Option For the investor that does not want to make a single-country bet on the PIIGS, the new Deutsche X-trackers MSCI Southern Europe Hedged Equity ETF (NYSEARCA: DBSE ) is an interesting option. DBSE, which debuted last month , is the closest fund on the market today to a true PIIGS ETF. Looking a little closer, DBSE is essentially a combination Spain/Italy ETF, as the countries combine for 95 percent of the fund’s weight; however, that country mix could prove advantageous going forward. Disclaimer: Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.