Tag Archives: zacks funds

A Taste Of Turkey ETF Before Thanksgiving

The great quote ‘what’s in a name?’ by William Shakespeare probably falls inappropriate in some cases. Let us say why. Thanksgiving is just around the corner, and demand for turkey is high. While turkey is good only for a blessed dinner, investors can give special attention to a specific country named ‘Turkey’ on Thanksgiving – for any insightful investing opportunity – thanks to the similarity in name with the bird turkey, which is a must for most Americans on the special day. For those investors, we would like to dish out the economic and the stock market outlook of the equities and ETFs of Turkey. The timing is also apposite as the pure-play Turkey ETF, the iShares MSCI Turkey ETF (NYSEARCA: TUR ), has gained about 2% in the last one month (as of November 23, 2015), though the product is down about 23.8%. What’s Behind the Recent Bullishness? The Turkish market has been enjoying a bullish stretch recently thanks mainly to political hopes. Its ruling Justice and Development Party (AKP) won a surprising majority in this month’s election to rule till 2019. The significant win put an end to the months-long political unrest and boosted the demand for risky assets in anticipation of a stable government. In fact, consumer confidence in Turkey also leaped post AKP’s win. Economy Edges Up This once-woebegone economy is also sending positive vibes on the economic front. In October, its government doled out the Medium-term Economic Program and the Financial Plan for 2016-2018, wherein softer growth targets were mentioned but increased spending on social policies and defense areas was also hinted at, per Organization for Economic Cooperation and Development (OECD). Investors should note that the Turkish economy, normally known for its wide current account deficit, recorded the ‘ largest surplus in six years’ in September, breezing past both year-ago number and analysts’ expectations. Persistently weak oil prices and a soft import demand led to this jump. Notably, slumping oil prices is vital to the Turkish economy as the country imports more than 90% of oil for about 70% of its total energy needs. Imports fell 24.4% in the month – the steepest monthly plunge in five years – which in turn lowered trade deficit. Sky-high inflation – the key botheration in the Turkish economy – eased in October after hitting a four-month high in September. Turkey’s central bank guides inflation at 7.9% at the end of 2015 and at 6.5% in 2016. The economy stepped up in Q2 and grew 3.8% year over year, beating market expectations. The growth rate was the best since the first quarter of 2014 thanks to strong domestic demand . In the first quarter of this year also, the growth rate came ahead of forecasts. As per OECD , the economy’s GDP is likely to increase from 3% in 2015 to more than 4% in 2017 on abating political upheaval, improving job growth and a falling Turkish lira which in turn will boost exports in association with a global economic recovery. Lira has lost about 17.5% so far this year (as of November 23, 2015). Deterrents Despite this optimism, the market is exposed to risks. A spike in geopolitical crisis at the southern region, terror attacks in the Middle East and the related entry of refugees are huge threats to the economy, per OECD. Moreover, the Fed is preparing for a lift-off, though gradual, in December. This will lead to a flight of capital from the Turkish economy and weaken the currency further. In any case, the Turkish lira is one of the worst-performing currencies this year. Further weakness in the currency will put pressure on the country’s huge oil imports, exaggerate foreign exchange outflows and lead inflation to jump. Lira’s decline has already lowered the average Turkish income from more than $10,000 to around $9,000 . If this trend continues, it would be tough for Turkey to emerge out of this vicious cycle. All in all, though tensions persist, things are slowly turning for the better. Considering both pros and cons, investors should take a closer look at the Turkey ETF before investing. Below we highlight the key details of the fund. TUR in Focus The ETF follows the MSCI Turkey Investable Market Index and provides a pure play exposure to 76 Turkish stocks. The fund is highly concentrated on its top 10 holdings which make up for nearly 60% of assets. Financials dominate the fund’s returns with less than half of the portfolio while industrials and consumer staples take double-digit exposure in the basket. The fund has amassed around $359.6 million in its asset base and trades in solid volume of about 360,000 shares per day in average. The fund charges 62 bps in annual fees from investors and yields 2.59% annually (as of November 23, 2015). TUR has Zacks ETF Rank #3 with a ‘High’ risk outlook. Technical Look If we take a closer look at TUR, hopes for a surge find some basis. From a technical perspective, TUR is poised for a surge in the coming weeks. Its short-term moving average (9-Day SMA) is above the mid-term average (50-Day SMA), suggesting near-term bullishness. Further, RSI is close to 50, meaning that the fund is about to slip in the oversold territory and might reverse the trend anytime. TUR trades at a P/E (ttm) of 10 times, lower than the broader emerging market fund, the iShares MSCI Emerging Markets ETF’s (NYSEARCA: EEM ), P/E of 11. Original Post

3 Mid-Cap Blend Mutual Funds To Add To Your Portfolio

Blend funds are known as “hybrid funds”. Blend funds aim for value appreciation by capital gains. They owe their origin to a graphical representation of a fund’s equity style box. In addition to diversification, blend funds are great picks for investors looking for a mix of growth and value investment. Meanwhile, a mid-cap blend fund is a type of equity mutual fund which holds in its portfolio a mix of value and growth stocks, where the market capitalization of the stocks is generally between $2 billion and $10 billion. Below, we will share with you 3 top-rated mid-cap blend mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) , as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all mid-cap blend funds, investors can click here to see the complete list of funds. Hodges Fund No Load (MUTF: HDPMX ) invests in common stocks of companies of any market capitalization, including medium-sized companies. It may also invest in money market instruments. The fund purchases put and call options on domestic traded stocks or security indices. It also sells options and write “covered” call options. It seeks long-term growth of capital. The fund has a three-year annualized return of 19.1%. As of September 2015, HDPMX held 41 issues, with 12% of its total assets invested in Texas Pacific Land Trust (NYSE: TPL ). Vanguard Strategic Equity Fund Investor (MUTF: VSEQX ) seeks long-term capital growth. It invests in both small and medium-sized companies that are believed to have strong growth prospects and reasonable valuations compared to its peers. The fund’s advisor applies a quantitative process to assess all the securities in its benchmarks, including the MSCI US Small and Mid-Cap 2200 Index. A large portion of its assets are invested in equity securities. The fund has a three-year annualized return of 19.7%. VSEQX has an expense ratio of 0.27%, compared to a category average of 1.15%. ClearBridge Mid Cap Core Fund A (MUTF: SBMAX ) invests a major portion of its assets in equity securities of medium-sized companies. The fund may invest a maximum 20% of its assets in equity securities of companies other than medium-capitalization companies. It may also invest up to 25% of its assets in securities of foreign issuers. The fund has a three-year annualized return of 17.2%. As of September 2015, SBMAX held 67 issues, with 2.46% of its total assets invested in Mednax Inc. (NYSE: MD ). Original Post

Have Silver Prices Reached A Bottom? ETFs In Focus

There is no doubt that silver has taken cues from the recent free fall in gold prices amid concerns of an interest rate hike by the Fed in their December meeting. A rising interest rate environment lowers the appeal for zero-yielding precious metals like silver. Spot silver prices were recovering for most of October but started dropping from the end of the month following the Fed’s hawkish meeting and stellar jobs report. After enjoying a short-term spike in the wake of the gruesome Paris terror attack last Friday, spot silver prices fell again to its three-month low this week and are currently down more than 9% year to date and below the one-year high by 22%. Therefore, it remains a matter of debate whether silver prices are really crashing or have already reached their bottom. There are a number of factors which indicate that silver prices will indeed rebound and that too even strongly. First, although there is a strong chance of an interest rate rise, the most recent Federal Open Market Committee (“FOMC”) meeting hinted that the hike will be soft. This has led to a pullback in the U.S. dollar and again brightened the prospect of precious metals as an investment asset. Second, recent growth forecasts suggested that the global economic slowdown is more pronounced than expected. Recently, the Organization for Economic Co-operation and Development (“OECD”) cut its 2015 global growth forecast to 2.9% from 3% expected earlier. The sluggish growth will largely be due to China, which is projected to grow by 6.8% in 2015, its lowest in 25 years. Precious metals like gold and silver are considered as an excellent economic hedge during a prolonged period of economic downturn, as investors prefer them over riskier assets such as stocks. The present slide in silver prices also presents a good buying opportunity. Finally, since silver is used in a number of key industrial applications, China’s economic slowdown is expected to hurt its demand. However, the white metal is expected to draw leverage from its use as the best metallic conductor in solar panels. About 3 million ounces of silver are required to generate one gigawatt of electricity from solar energy. Increasing government efforts to curb carbon dioxide emissions are boosting the demand for solar panels across the world. Most of the demand is likely to come from China, which is expected to become the world’s largest installer of solar panels this year. Despite the white metal hitting a three-year low price this week, silver mining ETFs rebounded in the last five days (as of November 19, 2015). Investors should closely monitor the movement of these ETFs as the rally is expected to continue in the coming days. Global X Silver Miners ETF (NYSEARCA: SIL ) This ETF follows the price and yield performance of the Solactive Global Silver Miners Index, measuring the performance of the silver mining industry. The fund holds 25 stocks in its basket. Industrias Penoles Cp, Silver Wheaton Corp. (NYSE: SLW ) and Tahoe Resources Inc. (NYSE: TAHO ) are the top three holdings in the fund with allocations of 11.59%, 11.17% and 11.08%, respectively. The top 10 holdings account for 74.24% of the fund’s assets. The ETF is also highly focused on Canadian firms with a 57.96% share, followed by U.S. (12.34%) and Mexico (11.15%). SIL has gathered about $131 million in assets and trades in an average volume of roughly 78,000 shares per day. It charges 65 bps in fees from investors per year. The product lost 29.7% so far this year but was up 4.4% in the past five days. iShares MSCI Global Silver Miners (NYSEARCA: SLVP ) This ETF tracks the price and yield performance of the MSCI ACWI Select Silver Miners Investable Market Index, which provides exposure to companies primarily engaged in the business of silver mining in both developed and emerging markets. The fund holds 30 stocks in its basket. Canadian firms dominate the fund’s portfolio with a 59.49% share, followed by U.K. (13.52%) and the U.S. (9.58%). Silver Wheaton, Fresnillo Plc ( OTCPK:FNLPF ) and Industrias Peñoles occupy the top three positions in the basket with shares of 23.52%, 10.93% and 7.54%, respectively. The top 10 holdings comprise 71.4% of the fund. Notably, the fund also offers some exposure to the broader precious metals and minerals sector (29.72%) and gold (9.23%), apart from silver (60.84%). The product has amassed over $12 million in its asset base and trades in a paltry volume of around 17,000 shares a day. It charges investors 39 bps in fees per year. The fund shed 32.1% in the year-to-date timeframe but returned 2.9% in the last five days. Original Post Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.