ETF Planet

Market Correction Looming?

noreply@blogger.com (etfplanet) — Fri, 09 Oct 2009 17:24:00 +0000

Today the S&P 500 (SPY) is flirting with new highs, based on our research this price action is to continue and should cause the index to close at a brand new high for the year. The technical picture looks bleak. For the last month, the market has continued its rally on lower than average volume. Fundamentally, the facts show that although there are signs of improvement in the economy, the full extent of the recent rally is unjustified. The consumer will continue to be a drag on the economy. The average consumer is still in a deleveraging/saving frame of mind and does not have a strong appetite for new credit to finance larger purchases. With unemployment continuing to be a threat, and consumers racing to either save or pay down debt, our view of economic growth seems to be temporarily constrained. A good percentage of this year’s market rally can be justified fundamentally, relative to the desperately oversold levels we were in during February. Most companies have cut costs which in turn, has increased profitability, but the real question, and what we believe will hinder positive results this coming earnings season is top line growth. After all the major cost cutting efforts that occurred throughout the recession, companies are poised to meet and possibly beat expectations on the bottom line. Our focus this earnings season is on new revenue. If companies don’t improve the top line it only shows that any good result is a function of cost cutting efforts that simply will not be sustainable in the long term.

We expect to see a near term shortfall in the market in the range of up to 10%. A way to hedge your portfolio or make a play on this information, would be to short the S&P 500 (SPY) or put on a contrarian position on the temporarily media, and investor hated US Dollar (UUP). Going long the US Dollar (UUP) would temporarily hedge you against a market shortfall because it has been trading inversely to S&P 500 (SPY). Our long term view on the US Dollar is bearish for obvious reasons, but in the near term a short term rally in the US Dollar(UUP) is rather probable. The chart below shows a comparison between the recovery periods. The 1974-75 upswing vs. this year’s market rally. If you notice, there are many similarities between both time periods. When we started comparing both upswing back in August we used it’s .93 correlation to project the future moves of the S&P 500 (SPY). As of now it has been fairly accurate and following its course. If this analysis holds true, there is a slight pullback on the horizon.

Solar ETF Update: TAN vs. KWT

noreply@blogger.com (etfplanet) — Tue, 06 Oct 2009 14:03:00 +0000

Over a year ago we took a look at the two most popular solar ETFs, Claymore’s Global Solar Energy Index (TAN) and Van Eck’s Market Vectors Solar Energy ETF (KWT). At first glance these two funds look to be quite similar, and in many aspects they are. However, a closer look reveals many of their differences in structure, size, and value.

The first solar energy ETF to hit the market was Claymore’s TAN, which tracks the MAC Global Solar Energy Index. This index has grown from 25 securities a year ago, to 30 today. The market cap size over the past year has drifted lower to small (51%), mid (38%), and large cap (11%) companies. Shortly after the launch of TAN, Van Eck’s KWT hit the market, which tracks the Ardour Solar Energy Index. This index is comprised of 29 securities, up from 27 a year ago, covering small (38%), mid (53%), and large cap (9%) companies. When looking at the top five holdings of the two funds as a percentage of the total fund, TAN’s top five have dropped from 34% to 25%, whereas KWT’s top five has dropped from 47% to 31% of the fund. Also worth noting is MEMC Electronic Materials (WFR) was previously absent from KWT, but is now the fund’s third largest holding.

On a value comparison, TAN’s average trailing P/E ratio is around 13, while KWT is sporting a 14 trailing P/E. When looking at the top three in country allocation, TAN is 30% China, 30% United States, and 27% Germany compared to KWT’s 35% United States, 27% Germany, and 27% China.

Over the past year both of these ETFs have shifted to a smaller average market cap, and have seen their P/E ratios drop significantly. Although KWT has become more diversified, Claymore’s TAN still seems to be the better choice.

PIMCO Battles iShares for Treasuries

noreply@blogger.com (etfplanet) — Wed, 03 Jun 2009 15:32:00 +0000

The new PIMCO 1-3 Year US Treasury ETF (TUZ) has been trading for two days now, as the bond giant’s first stab at the ETF market. The 1-3 Year U.S. Treasury Index Fund is a passively managed exchange-traded fund comprising primarily the high-quality component securities of the Merrill Lynch 1-3 Year U.S. Treasury Index. Management fees are listed at 15 basis points, which is the same as its primary competitor, the $7 billion iShares Barclays 1-3 Year Treasury Bond Fund (SHY). Given PIMCO’s position in the bond community, it shouldn’t be too hard to chip away at the mammoth iShares fund over time.

XRO Sheds Energy & Tech for Finance & Medical

noreply@blogger.com (etfplanet) — Tue, 14 Apr 2009 03:33:00 +0000

The Claymore/Zacks Sector Rotation ETF (XRO) recently rebalanced the fund’s holdings, on April 2^nd. The ETF is based on the Zacks Sector Rotation Index, which uses a quantitative methodology to overweight sectors with “potentially superior risk-return profiles”. The sector allocation is done on a quarterly basis.

In the most recent rebalancing, there was a shift away from Technology and Computers, and Energy, and new allocations in the Finance and Medical sectors. Allocations have also been also been increased in Retail/Wholesale, and reduced in Business Services, Industrial Products, and Aerospace. Listed below are the current allocations of the fund, and the increase or decrease compared to the last rebalancing that took play on January 5^th.

Medical: 36.3%, up from 0%

Retail/Wholesale: 32.1%, up from 18.6%

Finance: 11.6%, up from 0%

Business Services: 7.9%, down from 13.5%

Consumer Discretionary: 6.0%, up from 5.4%

Industrial Products: 5.0%, down from 7.8%

Aerospace: 0.7%, down from 5.8%

Consumer Staples: 0.3%, up from 0%

Autos/Trucks: 0%, down from 0.5%

Basic Materials: 0%, down from 5.1%

Computer & Technology: 0%, down from 25%

Construction: 0%, unchanged

Conglomerates: 0%, unchanged

Energy: 0%, down from 10.4%

Transportation: 0%, down from 7.9%

Utilities: 0%, unchanged.

The fund is currently comprised of 100 companies, and has a price to earnings ratio of 13.0. The fee structure is capped at 60 basis points, and currently has total managed assets of around $28.8 million trading on the NYSE Arca exchange.

XLF Breaks Resistance on High Volume

noreply@blogger.com (etfplanet) — Thu, 09 Apr 2009 20:25:00 +0000

Financials surged Thursday on results from Wells Fargo (WFC) that were better than expected, sending the whole sector higher. The financial ETF (XLF) broke through previous resistance levels, on the heaviest volume in 10 sessions. Wells Fargo finished the day up more than 31%, Bank of America (BAC) closed up 35%, and Citigroup (C) closed up 12%.

Barclays (BCS) announced the sale of its iShares unit to CVC Capital Partners, a private equity group for $4.4 billion.

Two ETFs for International Treasuries

noreply@blogger.com (etfplanet) — Mon, 02 Feb 2009 21:34:00 +0000

In recent weeks, there hasn’t been a hotter market than fixed income, most notably treasuries. So it’s no surprise that the two newest product launches from Barclays’ iShares are both international treasury ETFs. The two new funds, the S&P/Citigroup International Treasury Fund (IGOV) and the S&P/Citigroup 1-3 Year International Treasury Bond Fund (ISHG) began trading in late January, with very light volume.

As expected, all of characteristics of these two funds, except for the average maturity are almost identical. The country allocation for both of the funds are very similar with exposure of 25% to Japan, 10% to Germany, 8% to Italy, and 7% to France. The credit rating exposures for both funds are 53% AAA, 5% AA+, and 25% AA. As for the expense ratios for these new ETFs, they are both listed at 35 basis points.

For more information visit http://www.etfplanet.com

International 3X ETFs Hit the Market

noreply@blogger.com (etfplanet) — Thu, 18 Dec 2008 15:06:00 +0000

As we predicted the Direxion 3X bull and bear ETFs have been a huge success, and are now awash in volume daily. Traders love the big daily moves in these funds with the market’s current volatility. Yesterday was the launch of six more 3X funds from Direxion, launching bull and bear MSCI EAFE, Emerging Markets, and Technology shares. Here is a rundown of the new 3X funds that Direxion has added to their lineup:

(DZK) – Developed Markets Bull 3X Shares – MSCI EAFE
(DPK) – Developed Markets Bear 3X Shares – MSCI EAFE
(EDC) – Emerging Markets Bull 3X Shares – MSCI Emerging Markets
(EDZ) – Emerging Markets Bear 3X Shares – MSCI Emerging Markets
(TYH) – Technology Bull 3X Shares – Russell 1000 Technology
(TYP) – Technology Bear 3X Shares – Russell 1000 Technology

Trading in these new ETFs is likely to be light at first, but expect more liquidity in the coming months as more investors and traders become aware of these new funds, similar to their previous issues. As for the expense ratios for these new triple return ETFs, they are listed from 94 to 102 basis points, which is fair for 3X leverage.

According to the Direxion website, there will be even more 3X funds on the way. In a prospectus Direxion is showing plans for bull and bear funds for homebuilders, real estate, clean energy, Latin America, India, China, and the ever popular BRIC index.

ProShares Leverages Currency and Commodities

noreply@blogger.com (etfplanet) — Wed, 26 Nov 2008 20:28:00 +0000

The biggest name in short and leveraged funds has released a new group of ETF’s, with the promise of more to come. Having wide success with their more traditional style and sector leveraged and short funds, ProShares has now launched a series of double long and double short currency funds, covering the Yen and Euro, as well as two natural resource funds, covering the DJ-AIG commodity, and DJ-AIG crude oil indexes. Similar funds from other sponsors are already trading, but I doubt ProShares will have any problems gaining attention with their new ETFs. Here is a rundown of the new funds that ProShares now offers:

(ULE) – Ultra Euro
(EUO) – UltraShort Euro
(YCL) – Ultra Yen
(YCS) – UltraShort Yen
(UCD) – Ultra DJ-AIG Commodity
(CMD) – UltraShort DJ-AIG Commodity
(UCO) – Ultra DJ-AIG Crude Oil
(SCO) – UltraShort DJ-AIG Crude Oil

Although trading in these new ETFs is currently light, expect more liquidity in the coming months as more investors and traders become aware of these new funds, much like the launch of the other very popular ProShares ETFs. Four additional funds for gold and silver prices are also in the works, both double long and double short. As for the expense ratios for these newly launched ETFs, they are listed at 95 basis points, which is similar to most of their funds.

For more information visit http://www.etfplanet.com

Direxion Launches Triple Leverage ETFs

noreply@blogger.com (etfplanet) — Mon, 10 Nov 2008 20:37:00 +0000

Last week was an historic moment in American history as the United States elected its first African American president, but it was also an historic day for the ETF investing enthusiast. Shortly after the ballots were counted, and America knew who their next commander in chief was going to be, Direxion finally launched their newest investment products, a family of 3X Leveraged ETFs. A lineup that includes both bull and bear strategies for the Russell 1000 and 2000 indexes, and the energy and financial sectors will be should to grab the attention of traders and investors in the coming weeks and months. With volatility at an all time high recently, the daily returns of these funds should both excite, and scare onlookers. Here is a rundown of the 3X funds that Direxion now offers:

(BGU) – Large Cap Bull 3X Shares – Russell 1000
(BGZ) – Large Cap Bear 3X Shares – Russell 1000
(TNA) – Small Cap Bull 3X Shares – Russell 2000
(TZA) – Small Cap Bear 3X Shares – Russell 2000
(ERX) – Energy Bull 3X Shares – Russell 1000 Energy
(ERY) – Energy Bear 3X Shares – Russell 1000 Energy
(FAS) – Financial Bull 3X Shares – Russell 1000 Financial Services
(FAZ) – Financial Bear 3X Shares – Russell 1000 Financial Services

Although trading in these new ETFs is currently light, expect more liquidity in the coming months as more investors and traders become aware of these new funds, much like the launch of the very popular ProShares 2X ETFs. Many of the popular ProShares funds like UYG and SKF were slow at first, now they turn out a tremendous amount of volume on a daily basis. As for the expense ratios for these new triple return ETFs, they are listed from 94 to 102 basis points, which is fair for 3X leverage. As these funds gain in popularity, I would expect more fund launches in additional sectors.

For more information visit http://www.etfplanet.com

Claymore Launches Global Shipping ETF

noreply@blogger.com (etfplanet) — Mon, 20 Oct 2008 01:18:00 +0000

The new Claymore Global Shipping Index ETF (SEA) has been trading for a little over a month now, and a lot has changed since this new fund set sail. The top holdings of the fund are now more concentrated, the prior second largest holding is now the 14th largest, and the energy sector allocation of the fund has gained about a 4% additional weighting. The Global Shipping fund is based on the Delta Global Shipping Index, including companies that derive at least 80% of their revenues from the seaborne transport of goods or the operating and leasing of ships. The minimum market cap for a company to be included in the fund is $250 million, and a 30 day trading volume of $2 million.

SEA is country heavy in Greece (34%), the United States (17%), Bermuda (16%), and the Bahamas (11%).

The top 10 holdings in the Global Shipping Index ETF are:

Teekay LNG Partners – 5.48%
Frontline Ltd. – 4.89%
Tsakos Energy Navigation – 4.86%
Diana Shipping – 4.80%
Teekay Tank – 4.26%
Ship Finance International – 4.03%
DHT Maritime Inc. – 3.82%
Knightsbridge TA – 3.78%
Seaspan Corp. – 3.64%
Euroseas Ltd. – 3.60%

The fund is currently comprised of 30 companies, and has a price to earnings ratio of 6.6. The fee structure is capped at 65 basis points, and currently has total managed assets of around $5.7 million trading on the NYSE Arca exchange.

Clean Energy ETFs Face off: GEX vs. PBW

noreply@blogger.com (etfplanet) — Wed, 13 Aug 2008 21:28:00 +0000

Global energy demand is on the rise and nations, businesses and individuals are looking more than ever for new renewable, clean sources of energy. This new surge of interest in the clean, renewable energy space has many people looking to the sun, the wind, the ocean, ethanol & bio fuels, and other more obscure technologies. Investors are pouring money into new projects such as wind farms, solar farms, and other breakthrough technologies. Even T. Boone Pickens, a lifetime oil man, is getting behind the revolution.

Currently there are two ETFs that dominate the clean alternative energy sector, PowerShares WilderHill Clean Energy Portfolio (PBW) and Van Eck’s Market Vectors Global Alternative Energy ETF (GEX). These two funds appear to be quite similar, and in many aspects they are. However, a closer look reveals many of their differences in structure, size, and value.The first of these ETFs to hit the market was PowerShares’ PBW, which tracks the WilderHill Clean Energy Index. This index is comprised of 54 securities covering small (58%), mid (26%), and large cap (16%) companies. Roughly 2 years after the launch of PBW, Van Eck’s GEX hit the market, which tracks the Ardour Global Index. This index is comprised of 30 securities covering small (11%), mid (40%), and large cap (49%) companies. When looking at the top five holdings of the two funds as a percentage of the total fund, PBW’s top five make up 15%, whereas GEX’s top five make up a much larger 45% of the fund. Take a closer look at the individual holdings, and you will see just how different these two funds are. The older PBW has some very small companies, such as ReneSola (SOL) and EMCORE (EMKR) as its top solar holdings, compared to First Solar (FSLR), Q-Cells, and Suntech Power (STP) in GEX. Below is a comparison of the top 10 holdings of each fund.

On a value comparison, PBW’s average trailing P/E ratio is around 38, while GEX is sporting a 47 trailing P/E. Both of these ETFs are good investments for direct exposure to the wind and solar energy sector, however Van Eck’s GEX seems to be the more appropriately weighted of the two, despite its lack of diversification. If the underlying index that PBW tracks were to reshuffle to a more relevant weighting, it would deserve a second look.

For more ETF resources, visit http://www.etfplanet.com/

Van Eck Launches Gulf States Index ETF

noreply@blogger.com (etfplanet) — Fri, 25 Jul 2008 03:56:00 +0000

The new Market Vectors Gulf States Index ETF (MES) launched on July 23rd, the most recent region specific ETF to hit the market. The Gulf States fund is based on the Dow Jones GCC Titans 40 Index, which is comprised of public companies that are headquartered in countries that belong to the Gulf Cooperation Council (GCC) or that generate most of their revenues from countries belonging to the council. In addition to being part of the GCC, companies in the index must have market caps greater than $100 million, a 3-month average daily turnover of $1 million, and trade on recognized stock exchanges. MES is country heavy in Kuwait (52%), the United Arab Emirates (26%), Qatar (15%), and Oman (4%).

The Gulf States Index ETF is the most recent of a slew of Middle East, Africa, and frontier market ETFs to become available. PowerShares recently launched a similar, but more diverse MENA Frontier Countries Portfolio ETF (PMNA) which also has top country exposure in Kuwait, and exposure in Qatar, the United Arab Emirates, and Oman. Other similar ETFs include State Street’s Emerging Middle East and Africa Fund (GAF), Market Vectors Africa Index Fund (AFK), and Claymore’s Frontier Markets ETF (FRN).

The top 10 holdings in the Gulf States Index ETF are:

Mobile Telecommunications Co. – 12.14%
Kuwait Finance House – 10.45%
National Bank of Kuwait – 7.92%
Emaar Properties – 7.21%
National Industries Group – 5.43%
Qatar National Bank – 3.28%
Public Warehousing Co. – 2.87%
Global Investment House – 2.83%
First Gulf Bank – 2.65%
Commercial Bank of Kuwait – 2.63%

The fund has a heavy weighting in banks (38%), followed financial services (22%), and real estate (11%). The expense ratio for the fund is 0.98%, and trades on the NYSE Arca exchange.

USO Breaks its Upward Trendline...Finally

noreply@blogger.com (etfplanet) — Wed, 16 Jul 2008 15:05:00 +0000

The moment that many investors, and all consumers have been waiting for has finally come, the possibility that oil could finally be topping out. Today the United States Oil ETF (USO) broke its upward trendline that was set back in February. In order to hold the February trend, USO would have needed to hold the $110 mark. Whether or not this will lead to a significant drop in oil, or a sideways trading range remains to be seen. Either way, the break of this trend puts significant doubt in investors and traders that the rally in oil can continue.

The best way to play a potential drop in oil is the MacroShares $100 Oil Down ETF (DOY), which tracks the inverse price of crude.

The First Middle East Frontier ETF

noreply@blogger.com (etfplanet) — Thu, 10 Jul 2008 01:24:00 +0000

The eagerly awaited PowerShares MENA Frontier Countries ETF (PMNA) launched on July 9th, the second frontier ETF to hit the market. Claymore’s Frontier Markets ETF (FRN) started trading in June. Although both funds lay claim to the “frontier” market, the two couldn’t be any more different in their holdings. PowerShares’ fund is based on the NASDAQ OMX Middle East North Africa Index, whereas Claymore’s fund tracks the Bank of New York Mellon New Frontier DR Index. PMNA is country heavy in Egypt and Kuwait, and FRN is heavy in Poland and Chile.

PowerShares describes the index that PMNA is tracking in more detail on their website: “The Index seeks to provide direct exposure to liquid stocks of companies that have the majority of their assets or services residing in MENA frontier market countries, which include Kuwait, Bahrain, Qatar, the United Arab Emirates, Oman, Lebanon, Egypt, Jordan and Morocco.” The largest holding in the fund is Arab Bank PLC, which accounts for roughly 10% of the funds assets. In terms of sector allocation, the fund is 55% financials, 19% telecom, 13% industrials, 10% materials, and the remainder in energy and utilities. The current top ten holdings in the fund are as follows:

Arab Bank PLC – 10.08%
Emaar Properties – 7.71%
Nat’l Ind. Grp S.A.K. – 5.91%
Mobile Tele. Co. K.S.C. – 5.44%
Orascom Constr. Ind S.A.E. - 5.10%
Orascom Telecom Holding – 4.94%
Ban. Marocaine du Comm. – 4.69%
Maroc Telecom – 3.91%
Kuwait Fin. House K.S.C. – 3.65%
Solidere GDR Reg S – 3.49%

On a fundamental basis, the trailing P/E ratio for the fund is 14, and price to book is around 2.7 for the 50 issues that make up the fund. The expense ratio for the fund is 0.95%, and trades on the NASDAQ market.

Tracking Oil with Treasuries: The New Face of Oil ETFs

noreply@blogger.com (etfplanet) — Wed, 09 Jul 2008 03:58:00 +0000

MacroMarkets new paired oil ETFs launched last week, replacing the previous oil ETFs (UCR and DCR) that were liquidated in June after reaching their termination triggers. Unlike the popular United States Oil (USO), these paired ETFs hold cash instruments and transfer funds between each other, instead of holding oil futures contracts. The paired ETFs will track the price of crude on the NYMEX, and will transfer funds dollar-for-dollar with the price of crude. The securities will use a “reference price” of $100 crude, and the funds NAV at inception is one quarter of the reference price. The funds have a 95 basis point expense, for essentially holding cash.

This structure is unique because the Oil up (UOY) and Oil Down (DOY) will have no impact on the oil market. With the United States Oil ETF, the fund must roll into the futures of the upcoming month, and sell off futures of the expiring month to avoid delivery of crude. Sam Masucci, the CEO of MacroMarkets says “We’re not increasing the trading volume in futures, we’re not storing barrels of oil, we have a passive involvement in the oil market. We’re not affecting the price of oil”. These new offerings will have a liquidation price when oil closes above $185 for three consecutive days.

This unique structure is patented by the company, and is not the only fund they will be offering with this structure. The company has filed with the SEC for paired up and down real estate ETFs, which will track the S&P/Case-Shiller Composite-10 Home Price Index, with a 2x leverage factor. For more detailed information on the paired ETF methodology, visit MacroMarkets website.

Second Quarter ETF Update: Winners & Losers

noreply@blogger.com (etfplanet) — Wed, 02 Jul 2008 04:52:00 +0000

Another quarter has come and gone, the dust has settled, and now its time to see who made our top ten best and worst ETFs year to date. To avoid duplication, we’ve eliminated the lesser known ETFs that essentially track the same assets as the more popular issues, as well as funds with built in leverage.

As you can probably imagine, the top ten list was saturated with energy and commodity related names. The best overall performer was the United States Natural Gas Fund (UNG) which is now up over 75% for the year. Rounding out the bottom of the top performers was the iPath DJ AIG Copper ETN (JJC) which is up almost 29% for the year.

Best Performers Year to Date:
1) 75.1% - United States Natural Gas AMEX:UNG
2) 56.1% - PowerShares DB Energy AMEX:DBE
3) 51.0% - United States Oil AMEX:USO
4) 44.3% - PowerShares DB Commodity Index Tracking Fund AMEX:DBC
5) 42.1% - iShares S&P GSCI Commodity-Indexed Trust NYSE:GSG
6) 36.5% - SPDR S&P Oil & Gas Exploration & Prod AMEX:XOP
7) 34.1% - SPDR S&P Metals & Mining AMEX:XME
8) 31.5% - iShares Dow Jones US Oil & Gas Ex Index NYSE:IEO
9) 29.3% - ELEMENTS Rogers Intl Commodity ETN AMEX:RJI
10) 28.9% - iPath DJ AIG Copper TR Sub-Idx ETN NYSE:JJC

This year’s dogs are a different story, and surprisingly quite a diverse group. The worst performer, was the iPath MSCI India Index ETN (INP) which is sporting a solid -47% return year to date. Following close behind at -35% and -33% were the iShares DJ Broker-Dealers (IAI) and the KBW Capital Markets (KCE), respectively. Loaded with solar names, PowerShares WilderHill Clean Energy posted the 6th worst performance, followed by iShares DJ US Healthcare Provider, both losing roughly 30% this year. By far the most popular name on both lists, the Financial Select Sector SPDR (XLF) claimed the 8th spot on the worst list, losing a little over 29% of its value this year.

Worst Performers Year to Date
1) -47.4% - iPath MSCI India Index ETN NYSE:INP
2) -34.9% - iShares Dow Jones US Broker-Dealers NYSE:IAI
3) -32.8% - KBW Capital Markets ETF AMEX:KCE
4) -32.6% - Claymore/AlphaShares China Real Estate NYSE:TAO
5) -31.8% - PowerShares HighYield Dividend Achievers AMEX:PEY
6) -30.5% - PowerShares WilderHill Clean Energy AMEX:PBW
7) -29.7% - iShares Dow Jones US Healthcare Provider NYSE:IHF
8) -29.2% - Financial Select Sector SPDR AMEX:XLF
9) -29.1% - PowerShares Golden Dragon Halter USX China AMEX:PGJ
10) -28.5% - HealthShares Ophthalmology NYSE:HHZ

Our top ten best and worst lists were created using data pulled from Morningstar

Global Timber & Forestry ETF Launched by iShares

noreply@blogger.com (etfplanet) — Wed, 25 Jun 2008 23:01:00 +0000

The iShares S&P Global Timber and Forestry ETF launched this week, with very light volume of 7,000 shares traded on its opening day. The fund (WOOD) seeks to replicate the performance of the S&P Global Timber and Forestry Index, which Standard and Poors created back in August of 2007. The index is comprised of roughly 25 of the largest public companies dealing with the management, ownership, or upstream supply chain of forests and timberlands. Many of the companies are REITs, paper product companies, and paper packaging companies. The top three holdings in the index are Plum Creek Timber (PCL), Rayonier (RYN), and Weyerhaeuser (WY), which are all U.S. companies. Out of the ten countries represented in the index, the U.S. makes up roughly 41%, followed by Canada’s roughly 19%. The top ten of the 25 holdings as of December 31, 2007 are as follows:

Plum Creek Timber – 8.45%
Rayonier Inc – 8.29%
Weyerhaeuser Corp. – 8.11%
Sino-Forest Corp. – 8.00%
West Fraser Timber – 4.17%
Oji Paper Co. – 4.14%
SCA – Svenska Cellulosa – 4.08%
Smurfit-Stone Container – 3.92%
Potlatch Corp. – 3.90%
Aracruz-PNB – 3.88%

The top five holdings make up roughly 57% of the index, which is comprised of companies ranging from $15 billion in market cap, to $300 million. Along with the U.S. and Canada, other countries with sizeable portions of the fund are Brazil, Finland, Sweden, and Australia.

Investing is a Breeze with the Global Wind ETF

noreply@blogger.com (etfplanet) — Fri, 20 Jun 2008 04:12:00 +0000

The much anticipated First Trust ISE Global Wind Energy ETF (FAN) launched this week with healthy trading volume and a tight spread. Renewable energy has been a hot topic as of late, especially wind energy because of its low cost, and high efficiency. With the launch of this new fund, investors now have a chance to profit from companies in the wind energy business, as well as companies that will be entering the space.

The First Trust ISE Global Wind Energy ETF (FAN) will aim to track the ISE Global Wind Energy Index. The index is comprised of companies that provide goods and services to the wind energy industry, and companies “determined to be significant participants in the wind energy industry despite not being exclusive to such industry”. In order to be considered for the index, the company must be engaged in some aspect of the wind energy industry such as manufacturing or design of machinery, distribution of materials, management of a wind farm, or distribution of wind generated electricity. The current top ten of the 52 holdings in the fund are as follows:

REpowersystems AG - 10.51%
Vestas Wind Systems - 10.28%
Gamesa - 8.81%
Hansen Transmissions - 6.80%
Japan Wind Dev. Co. - 5.13%
Babcock & Brown Wind Partners - 4.40%
Nordex AG - 4.34%
Theolia SA - 4.28%
Clipper Windpower - 2.94%
Gurit Holding AG - 2.81%

On a fundamental basis, the trailing P/E ratio for the fund is 25, and price to sales is around 2.2. The total net assets for the fund are around $9.1 million, but this is likely to balloon as more investors move into the fund. The expense ratio for the fund is 0.60%, and trades on the NYSE Arca exchange.

Solar ETFs Face off: TAN vs. KWT

noreply@blogger.com (etfplanet) — Mon, 16 Jun 2008 21:36:00 +0000

With global energy demand on the rise, nations, businesses and individuals are looking more than ever for new, and more importantly, renewable sources of energy. This new surge of interest in the renewable space has many looking to the mother of all renewable resources, the sun. Now that the world is starting to take solar power seriously, investors are taking a second look at now profitable solar companies, and the ETFs that track them.

Currently there are two ETFs that dominate the solar sector, Claymore’s Global Solar Energy Index (TAN) and Van Eck’s Market Vectors Solar Energy ETF (KWT). At first glance these two funds look to be quite similar, and in many aspects they are. However, a closer look reveals many of their differences in structure, size, and value.

The first solar energy ETF to hit the market was Claymore’s TAN, which tracks the MAC Global Solar Energy Index. This index is comprised of 25 securities covering small (42%), mid (30%), and large cap (28%) companies. Shortly after the launch of TAN, Van Eck’s KWT hit the market, which tracks the Ardour Solar Energy Index. This index is comprised of 27 securities covering small (35%), mid (38%), and large cap (27%) companies. When looking at the top five holdings of the two funds as a percentage of the total fund, TAN’s top five make up 34%, whereas KWT’s top five make up a much larger 47% of the fund. Also worth noting is MEMC Electronic Materials (WFR) is absent from KWT, but makes up roughly 5% of TAN and is listed as the sixth largest holding.

On a value comparison, TAN’s average trailing P/E ratio is around 45, while KWT is sporting a 55 trailing P/E. When looking at the top three in country allocation, TAN is 30% China, 29% Germany, and 26% United States compared to KWT’s 26% China, 36% Germany, and 24% United States.

Both of these ETFs are good investments for direct exposure to the solar energy sector, however Claymore’s TAN seems to be the better diversified of the two and would be our choice if we decided to put solar energy to work for us.

Can You Handle the new Frontier Market?

noreply@blogger.com (etfplanet) — Fri, 13 Jun 2008 18:28:00 +0000

There's new blood in the ETF universe, and its not commoditites or leveraged funds, its the blood of the new frontier of investing, known as the frontier markets. On Thursday June 12th Claymore launched its Frontier Markets ETF (Ticker: FRN) which will attempt to track the Bank of New York Mellon New Frontier DR Index (Ticker: BKNFR). Here is a brief snippet from Claymore on what the index is comprised of:

The Frontier Index tracks the performance of depositary receipts in American depositary receipts ("ADR") or global depositary receipts ("GDR") form that trade on the London Stock Exchange ("LSE"), New York Stock Exchange ("NYSE"), American Stock Exchange ("AMEX") and Nasdaq Stock Market ("NASDAQ") of companies from countries that are part of the Frontier Market, as defined by the Index Provider.

The Index Provider currently defines the Frontier Market countries as: Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates, Egypt, Ghana, Kenya, Malawi, Mauritius, Morocco, Nigeria, Tunisia, Zimbabwe, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Kazakhstan, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia, Ukraine, Bangladesh, Pakistan, Papua New Guinea, Sri Lanka, Vietnam, Peru, Chile, Colombia, Ecuador, Jamaica, Panama and Trinidad & Tobago.

As of May 23, 2008, the Index's constituent countries were represented (in approximate market capitalization) in the Index as follows: Poland 25.0%, Chile 21.0%, Egypt 17.1%, Kazakhstan 7.8%, Peru 5.3%, Czech Republic 5.2%, Nigeria 3.4%, Lebanon 3.2%, Pakistan 3.0%, Oman 2.4%, Columbia 2.3%, Croatia 1.8%, Bahrain 1.4%, Georgia 0.7% and United Arab Emirates 0.5%.

Currently FRN's total market cap is just shy of $4,000,000 and has an expense cap of 0.65%.
The top 10 Holdings are names you probably have never heard of, and are as follows:

BANK PEKAO SA 7.94 %
TELEKOMUNIKACJA POLSKA 6.52 %
ORASCOM TELECOM HOLDING S 6.11 %
KAZMUNAIGAS 5.23 %
MINAS BUENAVENTURA ADR REP 2 SER'B'PEN1 5.20 %
ORASCOM CONSTRUCTION INDU 5.03 %
POLSKI KONCERN NAFTOWY OR 5.03 %
KGHM POLSKA MIEDZ SA 5.03 %
EMPRESA NAC ELEC-CHIL ADR 4.88 %
ENERSIS-ADR 4.21 %

Just recently PowerShares announced that it will be launching its own frontier market ETF with the planned ticker of PMNA. The fund will be based on the NASDAQ OMX Middle East North Africa Index, which is comprised of the largest and most liquid securities in Egypt, Morocco, Oman, Lebanon, Jordan, Kuwait, Bahrain, Qatar and the UAE.

PowerShares to Launch Frontier Market ETF

noreply@blogger.com (etfplanet) — Wed, 11 Jun 2008 13:36:00 +0000

Invesco PowerShares today announced its plans to launch a new frontier markets ETF, which will focus on the Middle East and Africa. The anticipated ticker symbol for the new fund is PMNA, and the fund will be called the PowerShares MENA Frontier Countries Portfolio. The fund will be based on the NASDAQ OMX Middle East North Africa Index, which is comprised of the largest and most liquid securities in Egypt, Morocco, Oman, Lebanon, Jordan, Kuwait, Bahrain, Qatar and the UAE.

This will be an exciting new ETF option, as many investors are looking for a way to cash in on the newly popular frontier markets. The most popular option to date is the T.Rowe Price Africa and Middle East mutual fund (TRAMX) which has been given an endorsement by Fast Money's Tim Seymour, and is up 9.1% for the year as of May 31st.

DCR "Oil Down" ETF Going to Zero?

noreply@blogger.com (etfplanet) — Wed, 11 Jun 2008 02:55:00 +0000

It's been a wild ride for Oil based ETFs over the last few months, especially for the MacroShares Oil Down ETF (DCR), which rises in price when the price of oil drops. Needless to say, DCR has been severely punished as oil prices have now cleared 130. On April 17th MacroShares issued a press release as follows: "The NYMEX light sweet crude oil futures contract for June closed at $114.36 on Wednesday, April 16th at 2:30. This marked the third consecutive business day that the reference price for MacroShares Oil Up and Down (UCR and DCR respectively) closed at or above $111. This triggered an early termination event for the securities. On July 3rd, a final distribution payment will be made to the UCR and DCR shareholders of record as of June 30th based on the underlying value of the Up and Down MacroShares Trusts. The underlying value of the trusts will be determined based on the June 25th closing price of the NYMEX light sweet crude oil futures contract for August."

So what does this mean for investors of DCR? Basically Oil needs to drop below $120 for DCR to have any value for the distribution. The value for the shares will be based on the following forumla: ($120 - Crude) / 3 = NAV

So if you're looking for a more conservative short play on crude oil, and with a longer timeframe than a few weeks, pass on DCR and look to shorting or buying puts on the USO instead.

Get a TAN with the new Global Solar Energy ETF

noreply@blogger.com (etfplanet) — Sun, 25 May 2008 02:26:00 +0000

Claymore recently launched their newest ETF offering, the Global Solar Energy ETF. The top ten holdings as of the launch date were First Solar Inc, Renewable Energy Corp, Q-Cells AG, Suntech Power Holdings, Solarworld AG, Sunpower Corp, Ja Solar Holdings, LDK Solar, and MEMC Electronic Materials Inc.

The Claymore/MAC Global Solar Energy Index ETF seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the MAC Global Solar Energy Index (the “Index”). The Fund will normally invest at least 90% of its total assets in common stock, American depositary receipts ("ADRs") and global depositary receipts ("GDRs") that comprise the Index.

Time to Look at Small-Caps?

noreply@blogger.com (etfplanet) — Tue, 11 Dec 2007 00:20:00 +0000

As the stock market pulled back from its October highs, there’s no denying that small cap stocks have been the worst place to be invested. The Russell 2000 lost roughly 7.2 percent in the month of November, compared to the S&P 500 return of negative 4.2 percent. Increasing worries of the slowdown of the U.S. economy, which could possibly lead to a recession, has pushed many investors into more solid large cap companies.

The first week of December has been a breath of fresh air for the market, and especially small-caps. As new economic data comes in, many pundits are starting to re-evaluate the possibility of escaping a recession. If this turns out to be the case, small-caps could get quite a boost, and could possibly outpace the much loved large cap arena.

A few ETF’s that are ideal for a small-cap bet would be iShares S&P SmallCap 600 Index fund (IJR), Vanguard Small Cap Index (VB), or iShares R2000 Index (IWM). For even more leverage you can look to the ProShares Ultra S&P SmallCap 600 (SAA) which returns twice the daily move for the S&P Small Cap 600.

The Amazon & Ebay ETF

noreply@blogger.com (etfplanet) — Wed, 12 Sep 2007 21:25:00 +0000

As technology and internet stocks are being pushed my investing media punits as the new safe haven in the market, I went out looking for a good technology/internet ETF to fill the hole in my portfolio. As I looked around I realized that most of the tech ETF's are pretty much the same. The tried and true QQQQ, although extremely liquid, is just too diversified for me. Then on top of the big tech names, you add a bunch of biotech stocks, which are great and all, but thats not what I'm going for. I wanted something with more focus on the internet. Thats when I came across a little unknown gem called HHH, the Internet HOLDRS. With 70% of its holdings spread out in 3 stocks, it gives the volatility I'm looking for, but has some other holdings as padding. Here is the percentage breakdown: EBAY 26, YHOO 23, AMZN 21, TWX 15, ETFC 4, MFE 4, AMTD 3, PCLN 1, and a few other names. If you're looking to cover your EBAY, AMZN, YHOO base, this ETF could be a good match for you.