Indexing

Most actively managed open-end funds have underperformed their benchmarks over the long haul. Alternatively, investors may be better off in cheap passive, index-based exchange traded funds. “In the long run, active funds underperform their passive counterparts due to higher fees and trading costs,” Tim Strauts, Senior Markets Research Analyst at Morningstar, said. Over the one-, […]

Smart-beta strategies that try to deliver enhanced returns or diminish market risks through alternative indexing methodologies have been the hot-button topic in the exchange traded fund industry. For instance, at the recent Inside ETF Conference, smart-beta ETFs were center stage, with analysts and industry experts pouring over the investment styles and fund sponsors promoting new […]

As markets turned lower in January, the Bank of Japan has been buying the dips with Japan-listed stock exchange traded funds. According to the Japan Exchange Group, combined January trading of all ETFs was at a record ¥7.94 trillion, or 100% increase for the same period year-over year and a 53.4% month-on-month increase, reports Leo […]

With the equities markets experiencing one of their worst stumbles in years, exchange traded fund investors may turn to low-volatility strategies that could help hedge the risks and diminish a portfolio’s swings. “Low volatility is one of the few factors that have historically performed well in turbulent markets,” according to a MSCI research note, Constructing […]

Investors who still want their foot in the market but are wary of volatility weighing on their portfolios can turn to low-volatility exchange traded fund strategies that could generate more attractive risk-adjusted returns. For instance, investors can utilize something like the iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV), which selects stocks based on variances […]

As the exchange traded fund industry grows, the number of critics are growing as well. While we do hear about a number of concerns that are unique to ETFs, investors should separate the facts from fiction. For instance, some are concerned that ETFs cause volatility in the stock market. However, people may be confusing the […]

Innovative Tech ETF State Street Global Advisors launched the SPDR FactSet Innovative Technology ETF (NYSEArca: XITK). The fund tracks U.S. tech companies in the most innovative segments of the technology and media sectors as defined by FactSet Research Systems. The underling index selects firms with the highest revenue growth and believes these companies are in […]

As investors search for alternative avenues to track the U.S. equities market in an attempt to diminish risks and potential enhance returns, some may turn to fundamental or smart-beta index-based exchange traded funds. On the recent webcast, Fundamental Index: Inside 10 Years of Excess Return, John Feyerer, Director of Equity ETF Product Strategy at Invesco […]

Smart-beta or alternative index-based exchange traded funds have experienced rapid growth as more institutional and retail investors shift away from traditional beta funds to diminish risk and potential generate greater returns. On the upcoming webcast, Fundamental Index: Inside 10 Years of Excess Return, Rob Arnott, Chairman and CEO of Research Affiliates, and John Feyerer, Director […]

Franklin Templeton Investments may soon be entering the exchange traded fund space with a handful of smart-beta or alternative index-based ETF options. According to a recent Securities and Exchange Commission filing, Franklin Templeton is working on its first group of ETFs, including the Franklin LibertyQ International Equity Hedged ETF, Franklin LibertyQ Emerging Markets ETF, Franklin […]

Investors who rely on a steady income stream may be interested in a new Reality Shares exchange traded fund focusing on U.S. companies that are expected to increase dividends ahead. The new Reality Shares DIVCON Leaders Dividend ETF (BATS: LEAD) begins trading tomorrow. The ETF has a 0.43% expense ratio and a dividend yield of […]

The PowerShares Dynamic Media Portfolio (NYSEArca: PBS) has lagged broader consumer discretionary exchange traded funds this year with a loss of 1.5% as traditional media stocks have been hampered by cord-cutting, or the move away from standard media outlets to newer concepts offered by the likes of Amazon (NasdaqGS: AMZN) and Netflix (NasdaqGS: NFLX). Some […]

Plenty of single-country exchange traded funds have been crimped by falling oil prices. Among emerging markets funds, Russia ETFs have recently given up the bulk of their 2015 gains as oil prices have continued struggling. Among developed markets funds, Canada ETFs are a prime example of the havoc weak oil prices can cause. Frontier markets […]

The energy sector’s status as the worst-performing sector in the S&P 500 this year has long since been cemented, leaving advisors and investors to ponder if the seventh-largest sector weight in the S&P 500 has better things in store for 2016. Down about 19% this year, the Energy Select Sector SPDR (NYSEArca: XLE), the largest […]

The Technology Select Sector SPDR (NYSEArca: XLK) is up 6.1% year-to-date, good for one of the better performances among the nine sector SPDR exchange traded funds. A big part of the solid performances turned in by XLK and rival technology ETFs this year is attributable to the so-called FANG stocks – Facebook (NasdaqGS: FB), Amazon […]

Many expected this to be the year that active mutual fund managers would be able to pick and choose their battles and generate alpha for investors. However, active managers continued to underperform benchmarks, bolstering the case for low-cost, passive index-based exchange traded funds. According to Goldman Sachs analysis, only 27% of large-cap core funds beat […]

Since coming to market, the Market Vectors Oil Refiners ETF (NYSEArca: CRAK), the first dedicated exchange traded fund play on refiners equities, is up 2.5%. That may not sound like a jaw-dropping performance, but CRAK has been downright stellar compared to other equity-based energy ETFs in recent months. The oil refinery business benefits from lower […]

Some mega-cap stocks and related exchange traded funds have been beacons of stability this year and that much is confirmed by the Guggenheim Russell Top 50 Mega Cap ETF (NYSEArca: XLG), which is up 2.8% year-to-date. Some mega-cap ETFs may not provide too much diversification from some benchmarks. For instance, the Russell Top 50 Mega […]

Aided by anticipation of and subsequent realization of higher interest rates courtesy of the Federal Reserve, financial services stocks and the corresponding exchange traded funds have been solid fourth-quarter performers. For example, the Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF, is up nearly 6% in the current quarter. Earlier this month, […]

Through several years of an epic bull market in medical devices the iShares U.S. Medical Devices ETF (NYSEArca: IHI), the largest dedicated medical devices exchange traded fund, stood tall, soaring more than 109% over the past five years. IHI was a leader earlier this year as the health care sector surged, but IHI was not […]

The Robo-Stox Global Robotics & Automation Index ETF (NasdaqGM: ROBO), criticized as too much of a niche idea to prove popular with investors when it debuted in late 2013, is off 5% this year as industrial stocks and select corners of the technology space have struggled. Heading into 2016, ROBO is not an ETF to […]

The Industrial Select Sector SPDR (NYSEArca: XLI) is down just 2.2% year-to-date, but that is good for one of the more middling performances among the sector SPDR exchange traded funds. XLI’s 2015 also is not enough to get some analysts excited about what next year will bring for the industrial sector. XLI has been stymied […]

Up more than 20% this year, the iShares MSCI Ireland Capped ETF (NYSEArca: EIRL) has clearly been one of the best performers among developed market single-country exchange traded funds, but even with that impressive, the lone Ireland ETF offers upside potential in 2016. Two years ago, Ireland need an 85 billion euro, or $115.5 billion, […]

Invesco PowerShares, the fourth-largest U.S. issuer of exchange traded funds, said Tuesday four of its ETFs are swapping indexes with two changing tickers. The PowerShares S&P Emerging Markets High Beta Portfolio (NYSEArca: EEHB) will become the PowerShares S&P Emerging Market Momentum Portfolio (NYSEArca: EEMO) as it moves to the S&P Momentum Emerging Plus LargeMidCap Index. […]

The so-called FANG stocks – Facebook (NasdaqGS: FB), Amazon (NasdaqGS: AMZN), Netflix (NasdaqGS: NFLX) and Google or Alphabet (NasdaqGS: GOOG) – have been among the best performers this year. However, the outperformance may not last, and investors may turn to more equally weighted exchange traded funds to give the smaller guys a chance. In 2015, […]

The First Trust ISE Cloud Computing Index Fund (NasdaqGM: SKYY) is up about 4% year-to-date, a solid showing, though it lags the 4.5% returned by the Nasdaq Composite. An alternative view of SKYY, the lone dedicated cloud computing exchange traded fund, is that its 2015 showing has been disappointing. Disappointing because the ETF is heavily […]

Until recently, Russian stocks and exchange traded funds such as the Market Vectors Russia ETF (NYSEArca: RSX) had been this year’s star BRIC performers. Next year could bring opportunity for another Russian asset class investors once avoided: Bonds. There was a time when Russian bonds were an avoidable asset class. That time was last year. […]

The SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA), the tracking exchange traded fund for the Dow Jones Industrial Average, got a little more exciting earlier this year when Apple (NasdaqGS: AAPL), the largest U.S. company by market value, joined the venerable blue-chip index. However, some market participants believe the Dow needs even more refreshing […]

The Goldman Sachs ActiveBeta Emerging Markets Equity ETF (NYSEarca: GEM), a relatively new player in the emerging markets exchange traded fund space, has quickly caught the eyes of institutional investors. GEM, which first began trading in September, has grown to $552.3 million in assets under management after attracting $375.6 million in net inflows this month, […]

Fixed income investors have heard plenty in recent months about the impact higher U.S. interest rates will have on corporate bonds and the corresponding exchange traded funds. There has also been plenty of news regarding the effects of higher U.S. borrowing on emerging markets sovereign debt funds. However, after some significant declines earlier this year, […]