Tag Archives: stocks

ETF Update: An Unintended Focus On China A-Shares

Summary Every week, Seeking Alpha aggregates ETF updates in an effort to alert readers and contributors to changes in the market. There were 5 ETF launches over the last 2 weeks, with 3 of those launches focusing on China A-shares. Have a view on something that’s coming up or a new fund? Submit an article. Welcome back to the SA ETF Update. My goal is to keep Seeking Alpha readers up to date on the ETF universe and to gain some visibility, both for the ETF community, and for me as its editor (so users know who to approach with issues, article ideas, to become a contributor, etc.) Every weekend, or every other weekend (depending on the reader response and submission volumes), we will highlight fund launches and closures for the week, as well as any news items that could impact ETF investors. After the flood of launches 2 weeks ago, the last two weeks were low key in comparison. This was great for me as an editor a Seeking Alpha with Earnings Season in full swing, so I decided to combine this week and last week’s launches into one ETF Update post. Fund launches for the week of October 12, 2015 Fund launches for the week of October 19, 2015 Deutsche Bank rolls out a hedged alternative to ASHR (10/20) : The Deutsche X-trackers CSI 300 China A-Shares Hedged Equity ETF (NYSEARCA: ASHX ) will provide access to China A-share equities while mitigating exposure to fluctuations between the value of the Chinese renminbi and the U.S. dollar. This is a variation on the already popular Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (NYSEARCA: ASHR ). CSOP Asset Management launched 2 China ETFs as well (10/20) : There seemed to be a trend on the 20th, as CSOP Asset Management launched two new China focused ETFs to accompany its first fund, the CSOP FTSE China A50 ETF (NYSEARCA: AFTY ). The CSOP MSCI China A International Hedged ETF (NYSEARCA: CNHX ) is another currency hedged China A-shares fund, and the CSOP China CSI 300 A-H Dynamic ETF (NYSEARCA: HAHA ) tracks the CSI 300 Smart Index, which will switch between A and H shares of CSI 300 Index constituent companies based on their relative prices. This is a tricky one, so make sure to do your homework before diving in. State Street Global Advisors brings a new U.S. dividend fund to market (10/22) : The SPDR S&P 500 High Dividend ETF (NYSEARCA: SPYD ) tracks an index of the top 80 dividend-paying securities listed on the S&P 500, based on dividend yield. State Street is of course best known as the issuer behind the SPDR S&P 500 ETF (NYSEARCA: SPY ). Fund closures for the weeks of October 12 and 19, 2015 Direxion Daily 7-10 Year Treasury Bull 2x Shares ETF (NYSEARCA: SYTL ) Direxion Daily Mid Cap Bull 2x Shares ETF (NYSEARCA: MDLL ) Direxion Daily Basic Materials Bull 3x Shares ETF (NYSEARCA: MATL ) Have any other questions on ETFs or ETNs? Please comment below and I will try to clear things up. As an author and editor I have found that constructive feedback is the best way to grow. What you would like to see discussed in the future? How can I improve this series to meet reader needs? Please share your thoughts on this first edition of the ETF Update series in the comments section below. Have a view on something that’s coming up or a new fund? Submit an article.

The V20 Portfolio Week #3: Heading Into Earnings

Summary The portfolio rallied 5.6% versus a gain of 2.1% for the S&P 500. Expect significant volatility going into earnings. I am starting to doubt one of the holdings. The V20 portfolio is an actively managed portfolio that seeks to achieve annualized return of 20% over the long term. If you are a long-term investor, then this portfolio may be for you. You can read more about how the portfolio works and the associated risks here . Always do your own research before making an investment. Read last week’s update here ! Overall, the V20 Portfolio advanced 5.6% for the week against 2.1% for the S&P 500. This offsets much of the loss from last week and the portfolio is bouncing back along with the market. Although the market was overwhelmingly bearish just a couple weeks ago, recent earnings beats by major companies (Microsoft, Google, Amazon, etc.) have lifted investor sentiment and I expect the portfolio to benefit from the market tailwind over the next little while. Near-Term Volatility Volatility is the reason why earnings seasons have always been a stressful time for investors. Nothing can compare to that sinking feeling in your stomach when you realize your top holding just tanked 20%. Unfortunately, the V20 Portfolio will not prevent volatility. As I explained in the portfolio introduction , you should actually expect more volatility from the V20 Portfolio due to its concentrated style. As we experience our first Q3 earnings next week (from ACCO Brands (NYSE: ACCO )), definitely be prepared for a rocky ride (both up and down). Significant Portfolio Event All was quiet until Friday. On Friday, our second biggest holding accounting for 28% of the entire portfolio, Conn’s (NASDAQ: CONN ), commenced a “consent for solicitation” for its high yield debt. The objective was to carry the debt with less restrictive terms such as increased limit of share repurchases. The most significant parts of the solicitation will probably go through as the company already has initial consent from 54% of the noteholders. This means that the company will be able to increase its share repurchase limit from $75 million to $375 million. As I believe that the stock is undervalued (why it exists in the V20 Portfolio in the first place), additional repurchases will provide significant upside for the remaining shareholders. The market agreed with this sentiment, as the stock shot up as much as 20% on Friday before settling down with a gain of 11%. On Intelsat This stock (NYSE: I ) has been one of the laggards in the V20 Portfolio. The following price chart tells the sad story. Unlike Conn’s, I still did not add to the position as it declined. Why is that? The biggest reason is the new information that is making me question my original investment thesis. Financial Times leaked a possible deal that involved Intelsat selling assets to cut down debt. This is significant in two ways. For one, the information was leaked by an insider to a respectable news outlet, so this has some credibility. While there is no guarantee that the deal will go through, it does trouble me that the management would decide to pursue such a deal without giving any indication to shareholders. Secondly, if the deal goes through, it will no doubt impact valuation in some ways. Right now that is a big question mark as investors have no information whatsoever. This means that Intelsat’s future is no longer as certain as I once thought. The Week Ahead Expect volatility in the coming weeks as the V20 Portfolio pushes through earnings season. ACCO Brands and Intelsat will be reporting next week. I am not particularly worried about ACCO Brands as it is a fairly stable company. I expect Intelsat’s management to shed more light on the company’s future. If additional disclosure can erase my doubt, then I may add to the Intelsat position at the current price.