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ETF Updates Archive

Obama ETFs

In concert with today's change in command ceremony, ETF MarketPro is kicking off a series entitled The Obama ETF Portfolio - ETF Investing Alongside the New Administration.

A major theme and high priority for the new president will be to ramp up spending as a way to create new jobs.  The new series looks at how the spending plans are coming together and searches for exchange traded funds that are likely to benefit.

Check out the first post in the series - The Obama ETF Portfolio - A First Look.

Closed End Funds Fail to Deliver

Pimco recently announced that it will postpone monthly dividend payments for 6 municipal closed-end funds.

Back in October, we cautioned investors against jumping into closed-end funds due to the fact that most of them are leveraged.  The combination of a declining market and hard to replace leverage are causing Pimco and other closed-end fund managers to delay dividend payments.

In the past, fund managers borrowed money as a way to pump up fund returns.  Many managers issued auction rate preferred securities as a way to raise debt.  That market has dried up and left managers scrambling for other ways to borrow.

At the same time, the declining value of assets has created an asset coverage problem for closed-e

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Looking for a Bottom - Part 2

The day after we posted Looking for a Bottom? Start with Sectors, the market tested a new 52-week low and sector performance was telling.

The S&P 500 ETF (SPY) traded as low as $74.34 on November 21 before bouncing back to finish the day at $79.52.

6 of the 9 major sectors also hit a new low on Friday creating the need to reset our thinking on sector outlooks.

market-bottoms2

October 10th Group - Mixed Results

 

October 10 was the 7th straight day of a sell-off.  The market bottom was followed by

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Looking for a Bottom? Start with Sectors

With the US equity market recently hitting a new 52-week low, investors are still waiting for the market to bottom out.

However, clear differences are starting to emerge between the sectors as some groups have stayed above the low watermarks achieved on October 10.

The S&P 500 ETF (SPY) set a 52-week low of $82.09 on November 13.  Comparing sector lows on November 13 to other recent bottoming days of October 10 and October 27 reveals that 4 of the 9 major sectors may have already hit bottom.

52_week_low_chart

October 10th Group - Safe to Get Back in the Water Continue Reading »

Change You Can Act On

One of your goals for November should be to sell any mutual funds held in a taxable account and reinvest the proceeds into ETFs.

As we explained in "Would You Like Taxes with That?", the large volume of recent redemptions on the part of mutual fund investors will likely stick loyal investors with a capital gains distribution tax bill in December - even if the fund is down 30 or 40% on the year.

The move out of mutual funds is not just a smart move for this year.  Shifting to ETFs will continue to pay off down the road due to lower overhead and better tax efficiency.  The "active management" of mutual funds is overrated - as we've noted elsewhere, investors waste

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