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4 Top-Ranked Technology Mutual Funds For High Return

The technology sector is more likely to report above par earnings than other sectors as the demand for technology and innovation remains high. However, technology stocks are considered to be more volatile than other sector specific stocks in the short run. In order to minimize this short-term volatility almost all tech funds adopt a growth management style with a focus on strong fundamentals and a relatively higher investment horizon. Investors having an above par appetite for risk and a fairly longer investment horizon should park their savings in these funds. Below we will share with you 4 buy-rated technology mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect these mutual funds to outperform their peers in the future. Columbia Seligman Global Technology Fund A (MUTF: SHGTX ) seeks long-term capital growth. SHGTX invests a major portion of its assets in equities of technology companies located throughout the globe. SHGTX invests across a wide range of countries. SHGTX invests a minimum of 40% of its assets in foreign companies that are not traded in the US. The Columbia Seligman Global Technology A is a non-diversified fund and has returned 21.3% over the past one year. SHGTX has an expense ratio of 1.46% as compared to the category average of 1.47%. BlackRock Science & Technology Opportunities Portfolio A (MUTF: BGSAX ) invests the majority of its assets in equity securities issued by domestic and foreign science and technology companies. BGSAX may invest a maximum 25% of its net assets in emerging economies. BGSAX generally invests in common stocks but may also invest in preferred stocks and convertible securities. The BlackRock Science & Technology Opportunities Investor A has returned 19.3% over the past one year. As of August 2015, BGSAX held 158 issues with 6.41% invested in Apple Inc. (NASDAQ: AAPL ). Fidelity Advisor Electronics Fund A (MUTF: FELAX ) seeks capital appreciation. FELAX invests a large portion of its assets in common stocks of companies whose primary operations are related to electronic components, equipment vendors, electronic component manufacturers, electronic component distributors, electronic instruments and electronic systems vendors. Investments are made in both domestic and foreign companies. FELAX uses a fundamental analysis to select companies for investment purposes. The Fidelity Advisor Electronics A is a non-diversified fund and has returned 21.2% over the past one year. FELAX has an expense ratio of 1.27% as compared to the category average of 1.47%. T Rowe Price Global Technology Fund (MUTF: PRGTX ) invests a major portion of its assets throughout the world in the common stocks of companies that derive their revenues from the development, advancement, and use of technology. PRGTX invests in a minimum of 5 countries and a minimum 25% of its assets are invested in foreign companies. PRGTX invests in firms with an established track record. The T Rowe Price Global Technology Fund has returned 21.2% in the last one year. Joshua K. Spencer is the fund manager and has managed PRGTX since 2012. Original Post Share this article with a colleague

Does This New Consumer Discretionary ETF Look Promising?

Consumer discretionary is one of the sectors that have delivered commendable performance so far this year. The credit goes to the recovering U.S. economy, cheap gas prices, subdued inflation and prolonged ultra-low interest rates. The recent Fed minutes revealing its reluctance to raise interest rates in the near term should bode well for the sector, at least for the rest of the year. Notably, the most popular consumer discretionary ETF, Consumer Discret Sel Sect SPDR ETF (NYSEARCA: XLY ), returned 7.7% in the year-to-date time frame, while S&P 500 Index lost 2.1% in the same period. Manulife Financial Corp’s (NYSE: MFC ) insurance and investment manager John Hancock has forayed into the ETF world with six multi-factor smart beta offerings. One of them is JHancock Multifactor Cnsmr Discret ETF , trading under the symbol JHMC . The launch of this consumer-discretionary-focused ETF looks to be timely. Smart beta ETFs aim to obtain a return that’s higher than the return of the benchmark index, which is the fund’s alpha. Apart from higher returns, the fund seeks to reduce costs and enhance diversification. They follow a passive management strategy with a tweak in the component weightings unlike traditional, market-cap-weighted index funds. JHMC in Details Like other ETFs of John Hancock, JHMC is also based on the index that is developed by Dimensional Fund Advisors, which will also act as the sub-advisor to the fund. Dimensional is one of the first managers to work on multi-factor and rules-based investing. The index comprises securities in the consumer discretionary sector within the U.S. universe whose market capitalizations are larger than that of the 1001st largest U.S. company. The ETF comprises 154 holdings with Comcast Corporation (NASDAQ: CMCSA ) occupying the top position with 3.52% share, followed by Amazon.com, Inc. (NASDAQ: AMZN ) with 3.45% share and Home Depot, Inc. (NYSE: HD ) with 3.22% share. The top 10 holdings constitute around 23.96% of the fund. As far as sector allocation is concerned, media takes the top spot with 22.38% allocation, followed by specialty retail, and hotels, restaurants and leisure with 22.32% and 14.66% shares, respectively. The fund is moderately expensive as it charges 50 bps in fees from investors per year. How Does it Fit in a Portfolio? The upbeat September auto sales data triggered optimism in the consumer discretionary sector. U.S. light-vehicle sales increased 15.7% year over year to 1.44 million units in September. Sales on a seasonally adjusted annualized rate (“SAAR”) basis surged to 18.17 million units in the month from 16.53 million units in September 2014. It was the highest SAAR since July 2005. Further, retail sales spending indicates positive consumer sentiment for the sector. Consumer spending accounts for roughly 70% of the economic activity in the U.S. In August, personal spending edged up 0.4% from the prior month, as per the U.S. consumer department. For September, consumer spending is expected to rise as well given higher auto sales and, with the holiday season around the corner, it would likely remain bullish this year. The National Retail Federation predicted that U.S. holiday sales for the last two months of the year will grow 3.7%, higher than the 10-year average of 2.5%. Finally, rising consumer confidence bodes well for the sector. According to the business research group, Conference Board, the consumer confidence index increased to 103 in September after rising to 101.3 in August. The monthly reading was the highest since this January. The bullish trend in consumer spending is not only a positive for the consumer discretionary sector but also for investors interested in this new ETF. ETF Competition Being a smart-beta ETF, JHMC definitely deserves attention. However, there are a number of popular consumer discretionary ETFs that are already on the investors’ tracking list. Among them, the most popular are above mentioned XLY and First Trust Cnsmr Discret AlphaDEX ETF (NYSEARCA: FXD ). XLY tracks the S&P Consumer Discretionary Select Sector Index focusing on companies defined by the S&P 500 Composite Stock Index. The fund’s top ten holdings comprise nearly the same stocks as that of JHMC. It has an impressive asset base of $10.7 billion. On the other hand, FXD follows the StrataQuant Consumer Discretionary Index selecting stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices. It manages an asset base of $2.4 billion. Both XLY and FXD stand nearly at the same level in terms of yield, with XLY offering 1.4% and FXD offering 0.86%. However, on the cost front, XLY looks very attractive with only 15 bps in fees compared with a much higher annual fee of 70 bps for FXD. Original Post

Time For These Surging High-Yield MLP ETFs?

Despite being related to the energy space, MLPs put up a brave front last year when oil nosedived to hit dirt cheap prices. The valor was thanks to their low correlation with the underlying commodity and the U.S. shale oil boom. But their winning streak snapped this year with oil prices sliding persistently for the last one-and-a-half years. All energy MLP ETFs/ETNs are deep in the red this year with the highest incurred loss being about 30% by the Yorkville High Income MLP ETF (NYSEARCA: YMLP ) . However, things took a turn for the better to enter the final quarter of the year. The oil price went past its $50 per barrel mark last week for the first time since July 2014, and rebounded from the six-year low level. The revival was backed by signs of falling supplies. A subdued greenback, a declining rig count and better demand/supply balance added to the optimism. All these pulled things together for MLP ETFs and sent the securities rallying. Below we highlight the drivers in detail and see if MLP ETFs are ready for a prolonged run. Declining Energy Output: The Energy Information Administration expects a remarkable drop in U.S. crude production through the middle of next year before a turnaround in late 2016. Oil output is estimated to fall from 9.2 million barrels per day (bpd) in 2015 to 8.9 million bpd in 2016. Low Interest Rate Environment: Since MLPs are publicly traded partnerships generally engaged in the transportation, storage, production or mining of minerals and natural resources, these often operate pipelines or similar energy infrastructure that makes it an interest rate-sensitive sector. With the Fed likely to be dovish this year on faltering global growth and a soft job market in the U.S., interest rates have started to show a downtrend which in turn has pushed the bond yields lower. Quite expectedly, in a low rate environment, MLPs are back on the table helped by a favorable operating backdrop. High-Yielding Options: MLPs catch investors’ eyes as these do not pay taxes at the entity level and are thus able to pay out most of their income (more than 90%) in the form of dividends like the REIT firms. While most traditional income asset classes produced miniscule yields, MLPs lured investors with their higher payouts and stable cash flows (read: Boost Income and Growth with MLP ETFs ). So, if interest rates dive, MLPs will not have to pay higher for the huge chunk of borrowed money which may in turn help them to raise/maintain their dividend payout ratio. Thanks to the above-mentioned developments, nearly all MLP ETFs held up pretty strongly in October. Below we highlight four of those that have returned at least 10% in the last 10 days. InfraCap MLP ETF (NYSEARCA: AMZA ) The active ETF looks to provide a high level of steady income and capital appreciation by providing exposure to a portfolio of high-quality, midstream energy MLPs and related general partners. This $21.4-million ETF charges 95 bps in fees (read: AMZA: First Actively Managed MLP ETF Hits the Market ). With this focus, Magellan Midstream currently occupies the top spot in the fund with roughly 11.68% allocation, followed by Plains All Amer Pipeline LP and Williams Partners LP with 11.56% and 11.47% allocation, respectively. The fund added about 10.9% in the last 10 days and yields 13.28% annually (as of October 9, 2015). UBS ETRACS Alerian Natural Gas MLP Index ETN (NYSEARCA: MLPG ) The note tracks the Alerian Natural Gas MLP Index giving exposure to the 15 largest natural gas infrastructure MLPs. The product manages an asset base of $22.9 million and trades in paltry volumes of roughly 2,000 shares a day. This note also charges 85 basis points a year and has a yield of 7.14%. The product advanced 10.2% in the last 10 days. Yorkville High Income Infrastructure MLP ETF (NYSEARCA: YMLI ) This $39.7-million product looks to track the Solactive High Income Infrastructure MLP Index. This is a rules-based index designed to provide investors a means of tracking the performance of selected infrastructure MLPs, with emphasis on current yield. The product charges 82 bps in fees and yields about 7.67% per year. The fund returned over 10.3% over the last 10 days (as of October 9, 2015). Link to the original post on Zacks.com