Tag Archives: zacks funds

3 Strong Buy All-Cap Value Mutual Funds

Value mutual funds provide excellent choices for investors looking for bargains, i.e., stocks at a discount. Value mutual funds are those that invest in stocks trading at discounts to book value, and have low price-to-earnings ratio and high dividend yields. Value investing is always a popular strategy, and for a good reason. After all, who doesn’t want to find stocks that have low P/Es, solid outlooks and decent dividends? However, not all value funds solely comprise companies that primarily use their earnings to pay dividends. Investors interested in choosing value funds for yield should be sure to check the mutual fund yield. The mutual fund yield is the dividend payment divided by the value of the mutual fund’s shares. Below we share with you three top-rated all-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of all-cap value funds, their Zacks Rank and past performance. DFA Tax Managed U.S. Marketwide Value II (MUTF: DFMVX ) seeks long-term growth of capital. DFMVX invests 100% of its assets in its Master Fund, The Tax-Managed U.S. Marketwide Value Series. The Master fund is expected to invest the lion’s share of its assets in companies located in the U.S. DFA Tax-Managed US Marketwide Value II has a three-year annualized return of almost 9.1%. DFMVX has an expense ratio of 0.22% as compared to the category average of 1.10%. Pioneer Core Equity Fund A (MUTF: PIOTX ) invests the majority of its assets in equity securities of U.S. companies. PIOTX may invest a maximum of 10% of its assets in securities of non-U.S. issuers, which include up to 5% of its assets in securities of emerging economies. The fund may also invest in initial public offerings of equity securities. Pioneer Value A has a three-year annualized return of almost 6.3%. Craig Sterling is one of the fund managers of PIOTX since last year. Homestead Funds Value (MUTF: HOVLX ) seeks capital appreciation over the long run. HOVLX primarily focuses on acquiring common stocks of undervalued companies with market capitalization higher than or equal to $2 billion. The fund considers factors including earnings valuations and debt ratios to identify undervalued companies. Homestead Value has a three-year annualized return of almost 9.9%. As of December 2015, HOVLX held 48 issues, with 5.47% of its assets invested in Bristol-Myers Squibb Company (NYSE: BMY ). Original Post

Thematic ETFs: Smarter Than Regular Smart Beta ETFs?

It’s been a true transformation for the ETF industry over the last few years. With a size of $3.137 trillion , the global ETF industry hit a record at the end of April 2016. The U.S. market alone boasts a size of over $2.2 trillion, derived from over 1,890 exchange traded products. While this joy-ride is something to delight in, crinkles of worries must be there on the foreheads of issuers. After all, with such gigantic and successful progress, ideas of new issuances are likely to fall short. There is always pressure for beating the benchmark, navigating tough trading times and last but not the least, peer pressure. Simply put, the days of plain vanilla ETFs or market-cap weighted ETFs are gone and products with several wining attributes, like low volatility or high dividend, are coming on-stream. Commonly, these next generation ETFs are called smart-beta ETFs. But it seems that the lure for smart beta investing is also diminishing these days. Beating the benchmark on a sustainable basis is tough in the present global backdrop that is fraught with issues. Plus, first-time craze also ebbs when a new investing theme turns older. Probably, this is why issuers are fine tuning the smart beta concepts to make them smarter. For example, Goldman Sachs introduced the ActiveBeta Index concept, Global X has a suite of scientific beta ETFs and so on. In fact, to make things more competitive and take them a few notches higher, Global X got itself busy in promoting the Thematic investing and launching more products based on it. Inside Thematic Investing As per Global X, its family of thematic ETFs looks to track companies that reap returns from ” structural changes in people and demographics , technology and innovation, and natural resources, along with companies that exhibit a particular set of desirable values.” As we can see that the above-mentioned criteria is long-term in nature and less susceptible to sudden changes in economic policies of various countries or a sudden jerk in the market emanating from some geo-political crisis. Instead, these factors look to cash in on some emerging trend in the global economy. As an investor, if you have faith in a particular segment over the long term, only then you should go ahead with that product. As of now, Global X has four categories in its thematic investment, namely technology, resources, values and people. Not that these ideas are fool-proof as products in technology and resources segments piled up losses previously; but new entrees in people and values segments seem striking at the current level. We’ll tell you why. People Products Global X Millennials Thematic ETF (NASDAQ: MILN ) This recently launched ETF looks to track companies targeted at the U.S. millennials generation (birth years ranging from 1980-2000). Since millennials seem to be the growth driver of the U.S. economy, outpacing baby boomers in 2015 as the largest generation and has the prospect of comprising 75% of the workforce by 2025, this surely emerges as a long-term bet. Per Global X , millennials now earn about $2 trillion, with income projected to grow to $8 trillion by 2025. Since millennials have a tendency of splurging on tech-savvy products and eating out, several tech or consumer discretionary ETFs can give MILN little competition. Global X Health & Wellness Thematic ETF ( OTC:BFIT ) There is a visible shift in consumers’ taste and preference for health and wellness products which give people a better quality of life. It is already a $3.4 trillion industry . As global life expectancy is projected to surge by 18% by 2100, contribution of health and wellness companies ought to be higher. This explains why investors can have a look at BFIT which revolves around stocks like Whitewave Foods Co, Adidas AG, Herbal Life Ltd, etc. Global X Longevity Thematic ETF (LNGR) This new fund tracks companies which depend on people across the globe living longer lives. Now, since older people invest more in health care related products and services, health care will rule this fund. Boston Scientific, AbbVie and Medtronic are the top three firms of this ETF. As a matter of fact, this fund may face tough competition from other health care and biotech ETFs like iShares Global Healthcare ETF (NYSEARCA: IXJ ) , iShares U.S. Healthcare ETF and Guggenheim S&P 500 Equal Weight Health Care ETF (NYSEARCA: RYH ) . Values Product There is only one fund as yet, namely Global X S&P 500 Catholic Values ETF (NASDAQ: CATH ) . The fund gives exposure to the companies within the S&P 500 whose business practices follow Catholic values and leave out those that do not. Companies involved in weapons, military products and child labor do not get an entry card into this ETF. The theme falls in the category of socially responsible ETFs, though CATH is quite unique in nature. Bottom Line Maybe defined in a different way, thematic ETFs seem quite similar to smart beta ETFs. It’s just that the ideas are innovative and thus the issuer can expect success ahead. 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.

Why You Should Invest In India ETFs Now

After rough trading so far this year, the Indian market is now showing rays of hope for investors. Worries over monsoon deficiency, the key cause of last year’s upheaval is unlikely to bother this year. Added to this, better-than-expected fiscal fourth-quarter earnings set the stage for India investing on fire lately (read: Fragile Five ETFs Not At All Fragile This Year? ). La Nina: Better Monsoon Expected This Year Last year, lower rains weighed on the all-important agricultural sector. But, the president of the Confederation of Indian Industry (CII) recently forecast India GDP growth of 8% for fiscal 2016-17 driven by the usual monsoon. The agency now expects the agricultural sector to expand at the rate of 6% this year. “That adds about 0.5-1% to GDP,” as per CII president. Even Deutsche Bank is supportive of this fact. India is going to face a La Nina event this year, which is the positive phase of the El Niño Southern Oscillation and results in cooler than average sea surface temperatures in the central and eastern tropical Pacific Ocean. It is often seen as the opposite of El Nino (read: 5 ETF Losers of 2015 Hoping for a Rebound in 2016 ). As per the research house , the Indian agricultural sector exhibits a solid correlation with La Nina with average annual rains being higher than the long-term average. The bank noted that agri GDP in La Nina years expanded at an average 7.8% year over year versus an average 2.3% jump seen in years without La Nina. Not only the agricultural sector, Deutsche Bank indicated that GDP, private consumption and investments growth average 8.9%, 7.4%, 10.4% respectively in La Nina years against average growth of 5.8%, 5.2%, 7.2% respectively in years with no La Nina. Earnings Recovery on the Horizon? Nearly 76 BSE 500 companies that came up with earnings releases recently give cues of an earnings recovery. As much as 64.5% of them beat consensus estimates for net profit while 63.2% surpassed the top line. Higher government spending and a rebound in commodity prices have boosted companies’ earnings, per analysts. Though it is too early to take a call over the whole Indian earnings, as of now the trend is positive. Monetary Policy Easing The Reserve Bank of India ( RBI ) lowered its key rate by 25 basis points (bps) to 6.50% on April 5, 2016, to bolster business in the economy. This was the first cut in 2016 followed by four rate cuts in 2015. The rate is now the lowest in over five years. Investors who put more emphasis on slowing GDP data for the U.S. economy for the October-December quarter (7.3% followed by 7.7% growth rate in the prior quarter), will now find some reason to invest in Asia’s third-largest economy. IMF Moderately Bullish The International Monetary Fund, which reduced global growth forecasts recently, maintained the same for India for this year at 7.5% . Steady private consumption is the reason for the organization’s optimism though softer exports and listless credit growth are deterrents to the economy. All these make the case for India investing stronger. While all India ETFs should stand to gain, below we highlight a few ETFs that have chances of outperforming ahead. i Shares S&P India Nifty Fifty Index ETF (NASDAQ: INDY ) The fund looks to track the performance of the top 50 companies by market capitalization in the Indian market. Banks is the top sector in the fund with about 23.2%. The fund has a Zacks Rank #2 (Buy). EGShares India Infrastructure ETF (NYSEARCA: INXX ) Infrastructure stocks and the ETF should also get a boost from monetary easing. As this sector is debt-heavy in nature, a decline in interest rates will favor it. The fund has a Zacks Rank #2. WisdomTree India Earnings ETF (NYSEARCA: EPI ) The fund looks to follow the investment results of profitable companies in the Indian equity market. The fund has a Zacks Rank #2. EGShares India Consumer ETF (NYSEARCA: INCO ) As per the India Brand Equity Foundation , revenues of the consumer durables sector are expected to touch US$12.5 billion in fiscal 2016, up from US$ 9.7 billion in fiscal 2015. Since private consumption is pivotal in India, a look at this consumer ETF is warranted. The fund has a Zacks ETF Rank #3 (Hold). Link to the original post on Zacks.com