May 18, 2012

You are here: Home / 2011 / Archives for September 2011

SPDR Gold Trust ETF Chart Analysis

September 20, 2011 By Leave a Comment

Year-to-date, the SPDR Gold Trust (GLD) has outperformed the SPDR S&P 500 ETF (SPY) by a margin of about 20,000 basis points. Over the last month of trading, however, GLD has lagged behind SPY, the funds gaining around -4% and +6%, respectively [see GLD Returns].

From a fundamental perspective, this divergence in short-term performance could suggest that investors have in fact regained some confidence and have gradually begun to re-allocate assets to riskier corners of the market [consider Three Alternate Safe Haven Currency ETFs].

One piece of evidence that goes against this hypothesis, however, is that U.S. Treasury funds, like TLT and IEF, have also worked their way higher alongside rising stocks.

In fact, these ETFs have even better held their ground during gold’s recent slump, perhaps suggesting that investors aren’t quite convinced of the recent rallies in equity markets given the consistently worse-than-expected economic data dominating Wall Street [consider the new Simple (But Effective) Safe Haven ETFdb Model Portfolio].

Filed Under: SPDR Tagged With: , ,

FTSE NAREIT Residential Index Fund for Your Next Real Estate ETF Investment

September 15, 2011 By Leave a Comment

Looking for a great real estate ETF investment? Do some research on the iShares FTSE NAREIT Residential Index Fund (NYSE:REZ). While some funds have outperformed others, none have done better that the FTSE NAREIT Residential Index Fund

While overall the sector may still be facing some headwinds, most funds in the Real Estate ETFdb Category have performed rather well so far in 2011 thanks to these outperforming sectors. In fact, over the 18 ETFs in the space, 13 have outperformed the S&P 500 in a year-to-date comparison, suggesting that the vast majority of products are giving investors a better performance from a capital gain perspective– not to mention yield– than a simple investment in the S&P 500.

REZ has managed to produce a 9.8% gain for investors so far in 2011, thoroughly trouncing the market and beating out far more popular funds as well. For example, the two most popular products in the space, (NYSE:VNQ) and (NYSE:IYR), are producing returns of 0.65% and -1.4%, respectively, on a year-to-date basis for their investors.

While both of these products do provide investors with slightly better yields than REZ, they obviously do not come close from a performance standpoint, either this year or from longer term periods as well. In fact, when looking at the previous three years, REZ is the top performer in the category, gaining 16.5% while VNQ gained slightly (up 1.6%), and IYR lost a bit (down 3.7%) in comparison.

Real estate ETFs are a fantastic way to invest your money. Even in the struggling housing market, if you know which ones to invest in, then you are definitely going to make some money. Here are 10 more real estate ETFs to keep an eye on.

Filed Under: iShares, Real Estate ETFs Tagged With: , ,

Gold ETFs Still a Good Investment, Even With Price Drop

September 14, 2011 By Leave a Comment

Gold recently saw a price drop, mostly because of the ongoing concerns in Europe, particularly Greece. However, gold ETFs are still a good investment, even with the current price drop.

Why? Simply put: because it is gold. Even with the price drop, investors are still continuing to scramble to get their money into gold, because gold provides a guaranteed safe haven for their money right now.

The price of gold is up 30 percent in just the last six months. That return looks all the more enticing at a time when investor fears are growing in the stock market, and there’s little to be made from U.S. Treasury’s or money-market funds. Basically, get your money in gold or other precious metal ETFs.

When to Buy

Excerpt taken from The Associated Press

The big question right now is when to jump in. As demonstrated in recent weeks, gold prices react very quickly to economic news.

“The pendulum swings one way on fearfulness and back the other way on complacency,” said Tom Winmill, portfolio manager of $105 million Midas Fund, which owns gold and stocks in gold miners.

Also affecting gold prices are purchases by the world’s central bankers. This amount more than quadrupled this April through June, compared with a year ago, according to the World Gold Council. That continued source of demand bodes well for sustaining gold’s value.

But looking at the purchase from a personal level, gold provides a hedge against inflation and it’s a reliable store of wealth since investors don’t have to worry about credit risk. It also adds diversification to a portfolio because its price doesn’t move in tandem with the stock and bond markets.

“It all makes the argument for establishment of a gold position as a core holding (in your portfolio),” Winmill said.

————————————————-

How should you buy gold? Obviously most of us don’t have the option to just go buy gold bullion. However there are some alternatives. While a 1-troy ounce American Eagle gold coin may cost as much as $1,900, investors can get into a mutual fund or ETF for a fraction of that. That is why gold ETFs are still so valuable. They offer the chance to invest in gold without breaking the bank. The gold ETF’s total return year-to-date is 28.7 percent, compared with a 5.5 percent decline of the S&P 500 ETF (SPY).

Remember, always exercise caution and do your homework when it comes to investing in any sort of ETF. While gold ETFs are a good investment, you should still always know what you are getting into.

Filed Under: Precious Metals ETFs Tagged With: , ,

Make Money With Short ETFs in Tough Economical Markets

September 13, 2011 By Leave a Comment

Global stock markets continue to crumble around us. With the latest news  regarding the default situation in Greece things look even worse. However, there is still a way to make money with ETFs. Short ETFs are a great way to make money while we are stuck in tough economical markets.

Precious metals – particularly silver and gold, are doing well and will continue to do well. However, there are also the short exchange traded funds like SUK2 for the FTSE, or SE2P for the eurostoxx that many investors are making money off of. There are also many US equivalents to these short ETFs.

Short ETFs can capture and monetize a falling stock market for even the most humble investor with just a few dollars in a brokerage account. This is if you do your homework and pay your cards right.

If markets resume their upward trend then this is a bad strategy. But how likely is this? Goldman is in the dock. Greece is causing a European bond crisis. The UK election threatens a hung parliament with no leadership. The Chinese economy is overheating. The US housing market remains in a depression that will get worse if interest rates rise courtesy of the Greek crisis spreading.

Since the bad news is that the United States economy – and most other economies around the world, are in the toilet, and will continue to be for a while, then using short ETFs to make some money is a great way to put some extra cash in you pocket and a great way to allow you to keep investing, even in these tough economic markets.

Filed Under: Short ETFs, Wall Street News Tagged With: , , , ,

Will ETFs Suffer Based on What Happens in Greece?

September 12, 2011 By Leave a Comment

Many investors are wondering if ETFs will suffer badly based on the news that Greece is more than likely going to default. The best answer I can give is that ETFs will at least tumble some based on what happens in Greece, as will most everything else.

Single-country indexes on Monday in the region were suffering declines of 3%. Worries over Greece’s financial condition and the Eurozone debt crisis rippled through global markets. It seems the entire world is going to feel the burn if Greece defaults.

France’s CAC 40 declined 4.4% while Germany’s DAX fell 3.1%. ETFs tracking European stocks were falling to start the week after Friday’s rout. Why the major declines in these other countries? There is so much money tied up in Greece form other countries (including America) that if Greece defaults they are going to drag these other countries in a downward vortex with them. America has a ton of money tied up there, and many people will suffer hits on their retirement funds if Greece defaults.

The iShares Lehman 20+ Year Treasury Bond (NYSEArca: TLT – News) rose 0.7% as yields on the 10-year note traded under 1.9%. [Treasury ETFs Jump]

“The market is in extreme fear,” Charles Berry, a fixed- income trader at Landesbank Baden-Wuettemberg, told Bloomberg. “It’s the problem in the euro area that drove that sentiment.”

There are still some solid ETF investments, as real estate ETFs and Gold and Silver ETFs will more than likely remain strong and remain a good place to keep your money safe during these tough economic times.

Filed Under: Wall Street News Tagged With: , , ,

United States ETF Inflows Fell Sharply in August

September 8, 2011 By Leave a Comment

United States ETF inflows fell sharply in August as stock market volatility rose to its highest levels since the worst days of the global financial crisis in 2008. What does this mean?

Most investors pulled money from equity during the month of August, choosing commodity and real estate ETFs and headed for the relative safety of bonds. Fixed income ETFs gathered inflows of $4.7bn in August, compared with $2.6bn in July. According to Financial Times, a short maturity bond ETF was the second most popular choice for ETF investors in August with the SPDR BarCap 1-3 month bill ETF, known as BIL, attracting inflows of $2.1bn.

While United States inflows did fall, the sharp swings during the month have also served to re-ignite the debate over whether the growing popularity of ETFs could be contributing to an increase in stock market volatility.

Pundits, investors, academics and analysts have all suggested that the growth of ETFs and index funds has resulted in an “increased commonality of trading” where the simultaneously buying or selling of all of the constituents of an index forces them to move together during the trading day.

We will see what develops in September, but either way, ETFs remain a great way to build a very diversified portfolio, especially if you get invested in the right ones.

Filed Under: ETF Hound News Tagged With: , ,

ETFs Show Biggest Share of Stock-Market Volume on Record in August

September 7, 2011 By Leave a Comment

It looks like ETFs are taking over the world. At least that was the term many analyst and investors defaulted to when they looked at the share of stock market volume that ETFs held through August.

According to Birinyi Associates analyst Kevin Pleines 70 billion shares changed hands last month, an 86% increase from the previous month. In August, ETF trading accounted for 29% of all the US exchange volume.

Shares traded in SPY (S&P 500) rose 104%, FAS (financials) trading rose 200% and VXX (volatility) rose 119%. Volume in all leveraged ETFs rose 114% and accounted for 19% of all ETF shares traded in August.

The 86% increase in shares trading is a phenomenal stat, especially if you think about it from a month-to-month basis.

What ETF Performed the Best in August?

The ETF that performed the best last month was the TVIX, a leveraged ETF tracking the VIX, or CBOE volatility index. It jumped 135%. The worst performing ETF was the XIV, an inverse VIX tracker, which fell nearly 51%.

You may want to look into the TVIX ETF, as it looks like that one will continue to perform strong.

Filed Under: ETF General Information, ETF Hound News Tagged With: ,