Tag Archives: seeking-alpha

4 Top-Ranked Healthcare Mutual Funds To Boost Your Return

When markets are plying through choppy waters, investors often rely on the healthcare sector to safeguard their investments. This is because the demand for healthcare services does not vary so much with market conditions, making them a safe haven in difficult times. Many pharma companies also generate regular dividends, which go a long way in softening the blow dealt by plummeting share prices. Mutual funds are the perfect choice for investors looking to enter this sector, since they possess the advantages of wide diversification and analytical insight. Below, we share with you 4 top-rated healthcare mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy), and we expect each fund to outperform its peers in the future. To view the Zacks Rank and past performance of all healthcare mutual funds, click here . Fidelity Select Pharmaceuticals Portfolio No Load (MUTF: FPHAX ) seeks growth of capital. The fund invests a lion’s share of its assets in securities of companies involved in operations, including manufacturing, distribution and development of pharmaceuticals and drugs. It generally focuses on acquiring common stocks of companies located throughout the globe. Factors including economic condition and financial strength are taken into consideration before investing in securities of a company. The Fidelity Select Pharmaceuticals Portfolio No Load is a non-diversified fund and has a three-year annualized return of 22.9%. Asher Anolic has been the fund manager of FPHAX since 2013. T. Rowe Price Health Sciences Fund No Load (MUTF: PRHSX ) invests a major portion of its assets in common stocks of companies whose primary operations are related to health sciences. It focuses on investing in large and mid-cap firms. The T. Rowe Price Health Sciences Fund No Load has a three-year annualized return of 30%. As of September 2015, PRHSX held 160 issues, with 4.97% of its assets invested in Allergan plc (NYSE: AGN ). Vanguard Health Care Fund Investor (MUTF: VGHCX ) seeks long-term capital growth. The fund invests a large chunk of its assets in securities of companies primarily involved in operations related to the healthcare domain. VGHCX invests in healthcare companies, including pharmaceutical firms, medical supply companies and companies engaged in operations related to medical and biochemical. It may invest a maximum of half of its assets in companies located in foreign lands. The Vanguard Health Care Fund Investor has a three-year annualized return of 26.8%. VGHCX has an expense ratio of 0.34%, as compared to the category average of 1.33%. Fidelity Select Medical Delivery Portfolio No Load (MUTF: FSHCX ) invests the majority of its assets in companies that either own or are involved in operating hospital and nursing homes, and are related to the healthcare services sector. It focuses on acquiring common stocks of issuers all over the world. The Fidelity Select Medical Delivery Portfolio No Load fund has a three-year annualized return of 20.8%. As of October 2015, the fund held 47 issues, with 19.06% of its assets invested in UnitedHealth Group Inc (NYSE: UNH ). Original Post

Is The Time Ripe For 50% Currency Hedged ETFs?

The global currency world has been on a tumultuous ride on central banks’ comments. The basic perception has been that the currency-hedged developed market ETFs will be on a roller-coaster ride since the second half of 2015 and in 2016 on divergent economic policies between the U.S. and others. So far, the investing trend has paralleled the belief as the greenback peaked to multi-year highs on looming policy tightening and currencies like euro and yen plunged on the ongoing QE measures. However, the trend was volatile at the start of December. While the Fed repeatedly put stress on a slower rate hike trajectory once the action is taken, the European Central Bank (ECB) – widely viewed as stepping up its QE measure – fell short of expectations. The ECB maintained the amount of monthly government bonds purchase at €60 billion. Additionally, the cut in deposit rates (by 10 bps) was also below the expected 0.15-0.20%. Thanks to a less dovish ECB, the common currency euro surged and logged its largest one-day gain against the greenback in over six years. The CurrencyShares Euro Trust ETF (NYSEARCA: FXE ) was up 3.2% on December 3. Across the pond, the Fed is preparing for a rate hike this month but is expected to apply a petite and slow hike which in turn can cut some strength from the greenback. Now that the oil price is due for more pain ahead with OPEC members agreeing on pumping up more oil, global inflation will remain for a few more months. This leaves the Fed with no option other than taking the policy tightening issue easy. After all, the U.S. economy is yet to meet a key Fed agenda of 2% inflation. Plus, the greenback has advanced over 7% so far this year (as of December 7, 2015). The U.S. dollar ETF, the PowerShares DB US Dollar Bull ETF (NYSEARCA: UUP ), is now just 3.2% down from the 52-week high price, indicating less upside potential from the current level. All in all, though the greenback is likely to remain strong ahead and euro is likely to weaken, volatility is likely to crop up now and then. In the last five sessions (as of December 7, 2015), UUP lost over 1.3% while FXE gained about 2.4%. This might put the currency hedging global investing at risk. Notably, currency hedging is a beneficial technique when the USD is strengthening relative to the concerned foreign currency. But investors would incur losses on repatriating their foreign income while the USD is falling. In this backdrop, a 50% hedged ETF can be an intriguing option to minimize risks and sail through all kind of market dynamics. Below we highlight three ETFs that could be on watch in the coming days, if the U.S. dollar slips and other currencies strengthen on central bank policies and economic developments. These funds may guard your portfolio from extreme situations and will likely deliver moderate returns. IQ 50 Percent Hedged FTSE International ETF (NYSEARCA: HFXI ) The fund follows the FTSE Developed ex North America 50% Hedged to USD Index and has amassed about $41.6 million in assets after debuting in July. The fund charges 35 bps in fees. The fund added over 2.1% in the last three months (as of December 7, 2015) (see all broad developed world ETFs here). IQ 50 Percent Hedged FTSE Europe ETF (NYSEARCA: HFXE ) The $37.6-million fund tracks the FTSE Developed Europe 50% Hedged to USD Index. The fund charges 45 bps in fees and was up about 1% in the last three months (as of December 7, 2015). IQ 50 Percent Hedged FTSE Japan ETF (NYSEARCA: HFXJ ) The $26.6-million fund looks to follow the FTSE Japan 50% Hedged to USD Index. The fund charges 45 bps in fees and gained over 7% in the last three months. Original Post

Euro ETFs On Volatile Ride: What Next?

Last week, the European Central Bank (ECB) hit headlines by extending its asset buying program by six more months to March 2017. The bank cut its deposit rate by 10 bps, shoving it deeper into the negative territory to -0.3%. ECB’s aim is to wipe out deflationary threats and boost economic growth in the common currency bloc. The markets did not appreciate the decision wholeheartedly as they expected an outsized expansion in the QE policy. To their utter disappointment, the ECB maintained the amount of monthly government bonds purchase at €60 billion. Additionally, the cut in deposit rates was also below the expected 0.15-0.20%. As a result, the common currency euro surged and logged its largest one-day gain against the greenback in over six years. The CurrencyShares Euro Trust ETF (NYSEARCA: FXE ) was up 3.2% on December 3. But since October, the euro has dropped over 5% against the greenback in anticipation of a very dovish act from the ECB. Several analysts are betting on the euro-dollar parity as the euro gained strength and the Fed is putting stress on a slower rate hike trail once it pulls the trigger. We expect the latest strength in the euro to be short-lived. After all, a recovering U.S. economy and a soft Eurozone economic backdrop will keep the monetary policy divergent for long. The Fed may apply a petite measure of hike now, but will likely speed up policy normalization once the economy gathers steam. Across the pond, the ECB might act more benignly if the present quantum and duration of the QE measure fails to pull up the sagging economy. Possibilities of further monetary easing by the ECB and euro’s thinning status as a reserve currency might result in a further slide in euro. Notably, after yuan’s inclusion in IMF’s SDR currency basket, euro lost its weight from 37.4% to 30.93 %. The move will take effect from October 2016. Investors should note that FXE is down 10.6% so far this year (as of December 4, 2015). Although, it is presently exhibiting a volatile trend on the double whammy of the ECB shock and the confusion over how fast the Fed will proceed on the rate hike path. Fortunately, ETFs offer several options to investors to accomplish this task. Below, we highlight a few choices in the inverse ETF space. These ETFs profit when the euro declines and may be suitable for hedging purposes against the fall in the currency (see all inverse currency ETFs here). ProShares Ultra Short Euro ETF (NYSEARCA: EUO ) This leveraged ETF looks to provide twice the inverse exposure to the performance of euro versus the U.S. dollar on a daily basis. The product has amassed over $500 million in AUM while it trades at a volume of 800,000 shares daily. However, given its active management style, the ETF charges a hefty annual expense ratio of 95 basis points. Though EUO lost 6.3% on December 3, the day ECB delivered a less-than-expected action, the fund crawled up over 1.5% on the day next as euro started paring gains. The product has enjoyed a gain of 18.2% on a year-to-date basis on a weak euro. Investors could book more profits off this fund should the euro continue to struggle. Market Vectors Double Short Euro ETN (NYSEARCA: DRR ) This is an exchange-traded note issued by Morgan Stanley. The product seeks to track the performance of the Double Short Euro Index. For every 1% weakening of the euro relative to the greenback, the index normally gains 2%. The choice is an overlooked one with just $54.8 million in AUM. The product charges an expense ratio of 0.65% a year. On a year-to-date basis, the product has advanced about 21% (as on December 4, 2015). It rose 1.84% on December 4, the day after the ECB action. Original Post