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A New One Of A Kind Biotech ETF Hits The Market

Summary LifeSci Index Partners has just launched the BioShares Biotechnology Clinical Trials ETF. This ETF focuses on just those biotech firms with a primary product offering that is in a Phase 1, Phase 2 or Phase 3 clinical trial stage of development. Given that these companies have no current product sales, many of the stocks in this portfolio are essentially boom or bust propositions. This fund is the only one in the ETF universe that offers exclusive focus to these clinical trial firms. Biotechnology stocks have soared this past year – the iShares Nasdaq Biotechnology Index Fund (NASDAQ: IBB ) returned an impressive 34% in 2014 – so it’s not surprising that companies are stepping up their biotech offerings in order to take advantage of current demand. One of those offerings that hit the market in just the last week is attempting to differentiate itself by targeting a very unique niche of the market. The BioShares Biotechnology Clinical Trials ETF (NASDAQ: BBC ) invests in biotech firms with a primary product offering that is in a Phase 1, Phase 2 or Phase 3 clinical trial stage of development. According to the fund’s fact sheet: Clinical trials stage companies are typically younger, smaller companies which do not have a drug approved but instead focus on testing their experimental drug candidates in human clinical trials. While many biotech focused ETFs invest in these types of firms, this is believed to be the only ETF out there that focuses on these types of companies. Most biotech ETFs tend to be more heavily weighted towards the big established names. In the aforementioned iShares Biotechnology Index Fund, every one of the top nine holdings in the ETF which happens to include over 53% of the ETF’s total assets fall into the Large Growth Morningstar style box. These top holdings include titans like Biogen (NASDAQ: BIIB ), Celgene (NASDAQ: CELG ) and Amgen (NASDAQ: AMGN ). That’s fine if you want broad exposure to the biggest and baddest names in the sector but it doesn’t do you much good if you want to invest in the little guys who are trying to break out in the sector or have a promising new drug in the pipeline. Researching and investing in these names individually can be cumbersome, costly and very risky. Being able to invest in a broad basket of these types of companies (the fund has 68 holdings in all) represents a niche that could really appeal to investors. Top holdings in this ETF currently include Sage Therapeutics (NASDAQ: SAGE ), Infinity Pharmaceuticals (NASDAQ: INFI ) and Prothena (NASDAQ: PRTA ). The fund is still in its infancy but initial signs are positive. The fund has a mere $3M in assets, but it does trade around 35,000 shares a day currently, so liquidity is slowly becoming less of an issue. Plus, investors need to consider the risk in an ETF such as this. Given that these companies have no actual product sales and just experimental drugs in the pipeline, they’re essentially boom or bust propositions and should be considered risky. Conclusion It’s easy to trade individual stocks when they’re well followed and well researched but an ETF is perfect for a niche product such as this. The 0.85% expense ratio isn’t particularly onerous considering you’ve got biotech specialists managing the product for you. Given biotech’s current popularity and the fact that there doesn’t appear ETF offering exclusive exposure to these clinical trial firms, this ETF should have some success carving out a special niche for investors. Now that you’ve read this, are you Bullish or Bearish on ? Bullish Bearish Sentiment on ( ) Thanks for sharing your thoughts. Why are you ? Submit & View Results Skip to results » Share this article with a colleague

Africa: Portfolio Worthy?

Originally published on Dec. 17, 2014 The association with Africa in past months is often linked to Ebola. But, don’t let that overshadow the prosperous investment opportunity offered by the continent. Africa is on the rise as witnessed in recent political stability, a growing middle class, and economic growth outpacing most of the world. Indeed, the GDP of Africa has had steady growth since 2000 averaging over 5% each year, and is projected to finish this year up 5.1% and 2015 up 5.8%. Here are three reasons to consider adding African stocks to your portfolio. Rapid Growth in Developed Countries While some countries are still in transition, Nigeria, Kenya, and Mozambique are growing exponentially, with projected GDP growth in 2015 climbing close to the 19% mark. The opportunity seems to be in the water. With China’s recent investment in the South African Ocean economy, other foreign investors are sure to follow suit with these countries’ large shore lines and port communities; there is a huge opportunity for expanded growth. The Major Players China surpassed the United States in import/export business in 2009 and has since been investing their excess liquidity into infrastructure. Heineken ( OTCPK:HINKF ) has been pouring capital expenditures to the tune of $690 million a year to improve facilities and training in Africa. Other well known internationally-based companies such as Nestle ( OTCPK:NSRGF ) and Unilever (NYSE: UL ) also hold profitable investments in Africa. The United States and Canada Although the United States has lagged behind in African investments, the U.S. recently pledged $14 b illion from U.S. businesses such as GE (NYSE: GE ), Marriott (NASDAQ: MAR ), Chevron (NYSE: CVX ), Coca-Cola (NYSE: KO ), IBM (NYSE: IBM ) and MasterCard (NYSE: MA ). Canada’s Actic, a private equity investor in emerging markets, and Cordiant, an emerging market asset manager, most recently launched a $126 million investment fund for Africa. With a growing middle class of 350 million strong in 2010 and home to six nations with the world’s fastest growing economies, Africa is poised to be an attraction for investors looking for positive growth. Sources: http://blog.trade.gov/2014/07/31/u-s-africa-business-success-stories-how-a-supplier-of-powerboats-to-the-u-s-military-started-doing-business-in-nigeria/ http://www.marketwatch.com/story/you-arent-investing-in-africaand-youre-missing-out-2014-12-02 http://www.investopedia.com/articles/investing/112614/etfs-and-mutual-funds-investing-africa.asp http://www.aljazeera.com/news/africa/2014/08/us-announces-14bn-investment-africa-201485155458455909.html http://www.usatoday.com/story/money/personalfinance/2014/08/03/investing-in-africa/13420007/ http://www.reuters.com/article/2014/05/09/us-heineken-nl-africa-idUSBREA480QG20140509 http://www.timeslive.co.za/politics/2014/12/05/chinese-have-invested-r120-billion-in-south-africa-zuma http://www.economist.com/news/finance-and-economics/21575769-strategies-putting-money-work-fast-growing-continent-hottest

Comparing 4 Tactical/Momentum ETFs

Summary Momentum is regarded as the premier anomaly due to its persistent outperformance over long periods of time. With grim clouds presently hanging over today’s stock markets, tactical/momentum ETFs may allow an investor to conduct “passive market timing.”. This article is a brief overview of several recently launched tactical/momentum ETFs. Introduction Momentum is often regarded as the premier anomaly due to its persistent outperformance over long periods of time. Stocks that have done well recently tend to continue to do well, while stocks that have done poorly recently tend to continue to do poorly. The momentum concept is embodied in aphorisms such as “Cut your losers and let your winners run.” Interestingly, momentum often runs counter to the tenets of value investing, which champions buying low and selling high. In a one-to-one contest however, the momentum premium beats the value premium hands down. In data presented in an article by GestaltU, the difference between high momentum (Sharpe = 0.58) and low momentum (0.05) stocks was much greater than the difference between value (0.49) and growth (0.23) stocks in the U.S. The p -value of the Sharpe ratio difference for momentum was