Tag Archives: seeking-alpha

GREK ETF Surging On Hopes Of A Deal

The latest proposals by the Greek government have raised hopes that a deal might be struck soon with the country’s creditors to stop Greece from defaulting on its debt. Greece’s Prime Minister Alexi Tsipras is expected to meet Christine Lagarde, the head of the International Monetary Fund, Mario Draghi, the president of the European Central Bank, and the Dutch finance minister today to finalize the proposals in the agreement. The Greek government has come out with a slew of measures that will focus on fiscal consolidation and tax increases to attain a surplus of 1% this year, followed by 2% and 3% surpluses over the next two years. According to the new proposal, there will be some changes in the VAT structure and the main rate would be fixed at 23%. Also, the corporate tax rate would be increased from 26% to 29% in 2016 and companies will have to pay a surcharge of 12% on profits over €500,000. Additionally, the retirement age would be slowly raised, which is expected to result in savings of €60 million this year. Moreover, workers’ and employers’ contributions to the pension system would also be hiked. The recent euphoria about the deal has led to a rally in Greece stocks and its related ETF. The Greek ETF – Global X FTSE Greece 20 ETF (NYSEARCA: GREK ) – has gained roughly 15% in the past one week. The rally might continue if the deal is indeed sealed and Greece manages to avert its default. Below, we have highlighted the GREK ETF in detail for investors keen on enjoying the Grecian ride. GREK ETF in Focus The ETF tracks the FTSE/ATHEX Custom Capped Index that is designed to reflect the performance of the 20 largest securities listed on the Athens Stock Exchange. The product holds 22 stocks in the basket and is heavily concentrated in the top 5 holdings that make up for a combined 48% of assets. Coca-Cola (NYSE: KO ), Hellenic Telecommunications ( OTCPK:HLTOY ) and National Bank of Greece (NYSE: NBG ) are the top three holdings. Financials dominates the fund with one-fourth assets, followed by Consumer Discretionary with 17.6% and Consumer Staples with 16.6%. The ETF has around $327.1 million in its asset base and sees a moderate trading volume of more than 800,000. The fund charges 55 bps in annual fees from investors and has a dividend yield of 1.17%. GREK currently has a Zacks Rank #4 (Sell) with a High-risk outlook. Bottom Line The condition of Greek banks is worsening by the day and it is almost on the brink of a collapse as savers have lost all confidence and continue to pull out money. In fact, the European Central Bank has sanctioned a release of more than €900 million to Greek banks on Tuesday so as to enable them to remain open. Some economists fear that these austerity measures are not feasible and it might worsen the recession that Greece re-entered last quarter. Lagarde also believes the measures are only a stopgap solution and are inadequate to bring Greece out of the crisis. Original Post

3 Top-Ranked Consumer Discretionary ETFs On Fire

After a rough patch in the first few months of the year, the consumer discretionary sector seems back on track. A stronger dollar, a harsh winter and the West coast port congestion took a toll on the performance of these stocks and gave them compelling valuations at the current level. Retail sales saw ” the first quarterly decline in almost three years” in Q1 of this year, per Bloomberg. Though the space kicked off the second quarter on an offhand mood, sales picked up momentum from May. U.S. consumer sentiment, which plunged to a six-month low in May, grew better than expected in June, going by the University of Michigan’s preliminary reading. After all, the sentiment is very strong for both the job and the housing markets, helping many to feel better about their economic situation. With rebounding U.S. economic indicators since the start of the second quarter, cyclical stocks have begun to show signs of life. Consumer stocks, especially those that center on discretionary spending, have since then been riding high. The space is also shaping up nicely for the upcoming earnings season. Total earnings are expected to be up 4.8% on revenue growth of 2.9%. For the full fiscal 2015 and 2016, the sector is likely to exhibit 9.7% and 16.2% gain in earnings on 3.4% and 6.2% revenue expansion respectively, as per Zacks Earnings Trends . To add to this, the Fed struck the space with good luck by promising a slower rate hike trajectory once the step is actually taken, most probably sometime later on in 2015. If this was not enough, the Fed has reduced the long-term rate projections for 2016 and 2017, which in turn, has spread enthusiasm among investors who started to envisage a few more months of easy money inflows. Moreover, a still subdued oil price, which is hovering around $60 per barrel, should continue to add up to consumers’ fuel price savings and encourage consumers to buy more discretionary products and services. Best Plays for Q3 Given these positive developments, a look at some of the top-ranked ETFs in the space could be a good way to target the best of the segment before stepping into Q3. In order to do this, investors can check the Zacks ETF Rank and find the top-ranked consumer discretionary ETFs best suited for their purpose. SPDR S&P Retail ETF (NYSEARCA: XRT ) This product tracks the S&P Retail Select Industry Index, holding 104 securities in its basket. The fund charges 35 bps in fees. It is widely spread across each component, as none of these holds more than 1.16% of total assets. Sector-wise, apparel retail takes the top spot at around one-fourth share, while specialty stores, Internet retail and automotive retail also have double-digit allocation each. XRT is a popular and actively traded ETF in the retail space, with AUM of about $1.31 billion and average daily volume of nearly 2.2 million shares. The fund has a Zacks ETF Rank of 1 (Strong Buy), with a Medium risk outlook and a year-to-date return of about 5%. First Trust Consumer Discretionary AlphaDEX ETF (NYSEARCA: FXD ) This is one of the more popular and liquid ETFs in the consumer space, with AUM of $2.63 billion and an expense ratio of 0.70%. The fund follows an AlphaDEX methodology and ranks the stocks in the space by various growth and value factors, eliminating the bottom-ranked 25% of the stocks. This approach results in a basket of 135 stocks that are invested in various market spectrums. Each security holds not more than 1.47% of assets. Specialty retail is the top sector with about one-fourth allocation, followed by media (13.1%) and household durables (10.6%). The ETF has added more than 4.6% so far this year. FXD has a Zacks ETF Rank #1 with a Medium risk outlook. iShares U.S. Consumer Services ETF (NYSEARCA: IYC ) IYC targets the Dow Jones US Consumer Services Index. The 178-stock fund has accumulated about $1.09 billion in assets. It has moderate company-specific concentration risk, with the top holding, Walt Disney (NYSE: DIS ), accounting for 5.72% share of the basket. The fund charges 43 bps in fees. It has a tilt toward retail (33.03%) and media (26.67%) stocks. So far this year, the fund is up 6.6%, and it has a Zacks ETF Rank #1 with a Medium risk outlook. Original Post

More Triple-Leveraged Biotech ETFs Come To Town

Summary New leveraged biotechnology ETFs to hedge or capitalize on market moves. Focus on ProShares’s new leveraged/inverse NASDAQ Biotechnology ETFs. Additionally, ProShares added leveraged/inverse Oil & Gas and homebuilder funds as well. By Todd Shriber & Tom Lydon For over five years, the ProShares Ultrashort Nasdaq Biotechnology (NasdaqGM: BIS ) and the ProShares Ultra Nasdaq Biotechnology (NasdaqGM: BIB ) cornered the market for leveraged biotechnology exchange traded funds. In the span of three weeks, the number of leveraged biotech ETFs has tripled. In late May, Direxion introduced the Direxion Daily S&P Biotech Bull Shares (NYSEArca: LABU ) and the Direxion Daily S&P Biotech Bear Shares (NYSEArca: LABD ) . Today, ProShares, the largest issuer of inverse and leveraged ETFs, launched the UltraPro NASDAQ Biotechnology (NasdaqGM: UBIO) and the UltraPro Short NASDAQ Biotechnology (NasdaqGM: ZBIO) . The UltraPro NASDAQ Biotechnology will attempt to deliver three times the daily performance of the NASDAQ Biotechnology Index while the UltraPro Short NASDAQ Biotechnology will seek to deliver three times the daily inverse performance of that index. The NASDAQ Biotechnology Index is the underlying benchmark for the iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB ) , the largest biotech ETF by assets. Maryland-based ProShares introduced four leveraged ETFs today, including a pair of leveraged homebuilders funds, a niche rival Direxion is also eyeing . The Ultra Homebuilders & Supplies (NYSEArca: HBU) and the UltraShort Homebuilders & Supplies (NYSEArca: HBZ) will offer double leverage on the Dow Jones U.S. Select Home Construction Index. That is the underlying benchmark for the $2.1 billion iShares U.S. Home Construction ETF (NYSEArca: ITB ) . ProShares also introduced two double-leveraged equity-based energy ETFs today. Those new funds are the Ultra Oil & Gas Exploration & Production (NYSEArca: UOP) and the UltraShort Oil & Gas Exploration & Production (NYSEArca: SOP) . UOP will seek to deliver double the daily returns of the S&P Oil & Gas Exploration & Production Select Industry Index while SOP will attempt to deliver double the daily inverse returns of that index. That index is the underlying benchmark for the $1.6 billion SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP ) . On May 29, Direxion introduced triple-leveraged answers to XOP , the Direxion Daily S&P Oil & Gas Exploration & Production Bull Shares (NYSEArca: GUSH ) and the Direxion Daily S&P Oil & Gas Exploration & Production Bear Shares (NYSEArca: DRIP ) . NASDAQ Biotech Index Top Holdings as of March 31, 2015 Table Courtesy: ProShares 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.