All posts by MarketsMuse Staff Reporter

Fixed Income, Tech Talk

#WhatsNext: The First Crypto Bond Issuance aka Bitcoin Bond

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#WhatsNext? wonders the MarketsMuse.com editors and Overstock’s Patrick Byrne does not fail to surprise with another announcement that could disrupt the capital markets. As a follow-on to a $500mil stock offering reported here on April 29, now Byrne is pitching an offering that he hopes to be the first issuance of a crypto bond aka bitcoin bond using crypto technology.

Per extract below from BrokerDealer.com….

Last Autumn, the firm acquired a 25% stake in alternative trading system (ATS) PRO Securities as part of a long-term ambition to use the core blockchain technology to create a cryptosecurity trading system, in which computer algorithms are used to trade virtual stocks issued by public companies.
The company is now scouting institutional investor interest in its first digital bond issues, which is powered by Overstock.com’s TØ.com technology – a name that refers to the fact that trades on the system securely settle the same day, as opposed to the T+3 convention on Wall Street. – See more at BrokerDealer.com
Fixed Income, Global Macro Strategy, People Profiles

Fixed Income Fix: Fed Data and Wall Street’s Hadron Collider

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Messing With Data aka When “Art” Smashes into “Science” in Wall Street’s Version of the Hadron Collider

MarketsMuse Fixed Income update comes consequent to the Fed’s June 5 release of Employment Data, and below is courtesy of extracted comments delivered to institutional clients of Mischler Financial Group under the banner “Quigley’s Corner” and authored by Managing Director Ron Quigley,  Head of Fixed Income Syndicate for the securities industry’s oldest and largest minority firm owned and operated by Service-Disabled Veterans. Mischler has been awarded “Best Research-BrokerDealer” for the past two years by The Wall Street Letter.

Ron Quigley, Mischler Financial
Ron Quigley, Mischler Financial

The large Hadron Collider in Geneva’s CERN Institute or the European Organization for Nuclear Research took ten years to build.  It’s the largest single machine on our planet. 10,000 scientists worked on it from 100 countries.  Talk about diversity and inclusion!  It rests as deep as 825 feet underground and its circumference is 17 miles. It was created, in essence to help find answers to questions that have bugged mankind like “where do we come from?” or “How was the universe started” among many others.  CERN hires roughly 90% of the world’s particle physicists otherwise known as the smartest people on earth.  My late father-in-law was its director and worked there for over 40 years. They are exacting people, detail oriented and with no room for error.  Which leads us into today’s Op-ed concerning U.S. economic data and its vast differences but equally important impact in today’s inextricably global-linked world economy.  Like the circular Hadron collider – what goes around comes around. So, what happens with rates, the EU, Greece, China and Ukraine, terrorism and/or Nationalism can all have an explosive domino effect.  Given that our current rate situation seems tenuous with equally profound global ramifications, I thought the analogy appropriate. Continue reading →

ETF News, Tech Talk

BATS is Best For ETFs..Thanks to BlackRock

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BATS Global Markets now is the leading U.S. marketplace for exchange traded funds (ETFs), executing 26.1 percent of all ETF trading in May.

MarketsMuse ETF and Tech Talk depts merge to provide following update, courtesy of James Dornbrook Kansas City Business Journal

On Thursday, the Lenexa-based stock exchange welcomed the 22nd ETF to be listed on its trading platform, the iShares Convertible Bond ETF (BATS: ICVT), an indexed bond fund that operates as a subset of the Barclays U.S. Convertibles Cash Pay Bonds Index. The index measures the performance of the U.S. dollar-denominated convertible bond market, which consists of bonds that a holder can convert into a specified number of shares of common stock of the issuing company. The bonds typically are used by companies with low credit ratings but huge growth potential.

More than half of the ETFs listed on BATS are from BlackRock Inc.’s (NYSE: BLK) iShares Exchange Traded Funds business. So the relationship with iShares has been key to BATS growth in listings for ETFs.

BATS excels at listing ETFs because offering companies are more interested in getting access to the liquidity BATS excels at offering than they are in buying marketing services, where the New York Stock Exchange and Nasdaq have a commanding advantage.

In addition to being the No. 1 ETF trading platform in the United States, BATS is also the No. 2 trader in overall U.S. equities, with a 21.2 percent market share in May.

ETF News, Global Macro Strategy

ETF Trade for Experts Only: Revert to the Mean: IYR, XLU, SPY

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“What Goes Up, Must Come Down”

MarketsMuse ETF update is courtesy of a special trade post sent this afternoon to subscribers of “Sight Beyond Sight”, the global macro trade newsletter published by Rareview Macro LLC and authored by Neil Azous.  The trade alert was also posted to Twitter via @RareviewMacro. For those not familiar with the concept of mean reversion, the simplest metaphor that drives the following thesis is “what goes up must come down.”

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

As highlighted in this morning’s edition of Sight Beyond Sight, the ratio of the iShares U.S. Real Estate ETF (IYR) and Utilities Select Sector SPDR Fund to the SPDR S&P 500 ETF Trust (SPY) is now trading at approximately two standard deviations away from its regression line since US interest rates peaked in September 2013.

rvr jun4

A short while ago in the model portfolio, we initiated a new mean reversion strategy in both of these ratios.

Specifically, we are buying $10 million notional each of IYR and XLU, and selling $20 million notional of SPY over the rest of today at VWAP.

Tomorrow, depending upon the results of the US Labor Report, we will add an additional $10 million notional each of IYR and XLU, and sell an additional $20 million notional of SPY in the morning.

Below is a thesis and trade matrix with a pre-defined game plan for gains and losses. Continue reading →

ETF News, Global Macro Strategy

Crude Oil-This Global Macro Trading Expert Says This About That

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MarketsMuse Global Macro Trading dept. merges with our ETF dept. to provide the following excerpt profiling a compelling and conservative Crude Oil-centric strategy courtesy of global macro think tank Rareview Macro LLC. The following was posted to subscribers of “Sight Beyond Sight” on Wednesday, May 27. Irrespective of subsequent three day’s pricing and trade activity across crude oil marketplace, MarketsMuse editors have determined the strategy proposed by Rareview Macro’s Neil Azous remains ‘evergreen’ (for the time being).

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

Today we got long on WTI crude oil in the model portfolio. Take it for what it’s worth, but this is the first time we have traded Crude Oil during this entire corrective phase stemming back to last summer. As per the March 18th edition of Sight Beyond Sight, when we put a long crude oil strategy on our watch list for a reduction of the severe contango in the futures curve, we are finally comfortable with the risk profile, especially considering volatility has been reduced by more than half since then. Sadly we did not deploy a position on March 18th as it coincidentally was the day the “barrel” bottomed.

The reason we chose to utilize a risk reversal approach today to get long on crude oil is because of the pronounced put skew in the term structure. For example, the structure we entered captures seven volatility points of skew on the ask side.

We like the risk-reward in this position. For example, if the November 2015 crude oil future (symbol: CLX5) were to fall $6 in the next one to two months, the strategy stands to lose ~$1.4mm. Conversely, if it were to rise by $6 in the same time frame the expected profit is ~$3.2mm, which returns a profit ratio of 2.28:1.

Sidebar: A similar strategy can be employed in the US Oil Fund (symbol: USO) by buying the 10/16/15 $21.5 calls and selling the $16 puts, but the ETF position is vulnerable to the shape of the futures curve moving further into contango. Continue reading →

ETF News

ETFs To Watch This Week Include ETFs Involved In Oil and The Yen

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MarketsMuse blog update highlights the must watch ETFs for the first week of June. The ETFs range from health care, to oil, the Japanese Yen. This update is courtesy of the Benzinga’s author, David Fabian, and his article, “Healthcare, Yen And Oil ETFs To Watch This Week“, with an excerpt from the article below.

The summer months are often characterized by lower volume and heightened volatility, which seems to be a trend that has already established itself this year.

Several important events this week have the potential to impact the market including: personal spending, motor vehicle sales and non-farm payroll data.

Here are the key ETFs to watch for the week of June 1:

Health Care Select Sector SPDR XLV 0.25%

Healthcare stocks have continued to show tremendous strength this year and XLV has been one of the leading sector components of the S&P 500 Index. This ETF is made up of 57 large-cap stocks in the pharmaceutical, biotechnology and medical services fields. Top holdings include well-known companies such as Johnson & Johnson JNJ 1% and Pfizer Inc PFE 0.9%.

CurrencyShares Japanese Yen Trust FXY 0.1%

After appearing to stabilize through the first four months of the year, the Japanese yen currency has once again plunged markedly lower versus the U.S. dollar in May. FXY tracks the daily price movement of the yen versus the U.S. dollar and is down 3.64 percent so far this year.

United States Oil Fund LP (ETF) USO 3.83%

Crude oil prices jumped 4 percent on Friday and managed to recoup the majority of the slide this commodity experienced in May. USO tracks the daily price movement of West Texas Intermediate Light Sweet Crude Oil futures and is the most heavily traded oil ETF.

To continue reading about why oil, the yen, and health care are must watch ETF categories according Benzinga reporter, David Fabian, click here.

 

ETF News

ETFs Now More Popular Than Mutual Funds For Investment Advisers

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MarketsMuse ETF update profiles a story that is now official: exchange-traded funds have surpassed mutual funds for being the most popular investment vehicle for investment advisers. Extract below courtesy of reporting by Chuck Jaffe/MarketWatch.com

A nail gun is a handy tool, so long as you’re not shooting yourself in the foot with it.

The same can be said for exchange-traded funds.

It’s now official that ETFs — which are mutual funds built to trade like a stock — are the most popular investment vehicle for investment advisers, but it may be possible that some investors who work with pros may not recognize that they are aiming at their own bunions.

The Journal of Financial Planning and the FPA Research and Practice Institute released the “2015 Trends in Investing Survey” this week and it showed that ETFs are now the “preferred investment vehicle” among advisers, with 81% of the wealth counselors surveyed using or recommending ETFs to clients.

That makes ETFs the top tool for advisers for the first time in the history of the study. When the study began 10 years ago, the 2006 results showed that just 40% of advisers were using or recommending ETFs to their customers.

Furthermore, over half of the advisers surveyed plan to increase their use or recommendation of ETFs in the next 12 months, far outstripping the increased usage of any other investment type.

For the entire story from MarketWatch.com, please click here

 

ETF News

New ETF Combines Dividends And Renewable Energy Using A YieldCo

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MarketsMuse blog update profiles a new ETF, Global X YieldCo Index ETF (NasdaqGM: YLCO), which launched, Thursday, May 28, 2015. The ETF, YLCO, comes from a new kind of asset called YieldCos that aim to provide a steadier income to investors through assets from the renewable energy industry. YLCO tracks the Indxx Global YieldCo Index, which is home to 20 stocks that are a part of nearly 65.7% of the ETF, YLCO ‘s weight. Some of these stocks include: 

  • TerraForm Power (NasdaqGS: TERP)
  • Brookfield Renewable Energy Partners (NYSE: BEP)
  • SuneEdison (NasdaqGS: SUNE)
  • First Solar (NasdaqGS: FSLR)

This MarketsMuse blog update is courtesy of ETFTrends’ Todd Shriber and his article, “Dividends and Renewable Energy? There’s an ETF for That“, with an excerpt below. 

ETFTrends-logo

Renewable energy stocks and dividends are not often thought of as synonymous, but an emerging asset class is changing that.

YieldCos are income-generating assets from the renewable energy space that look to deliver steady income to investors. Spun off as fully developed assets from parent companies, such as solar firms and wind farm operators, yieldcos are comparable to master limited partnerships (MLPs), an asset class that has been widely embraced by income investors in recent years.

A new ETF, the Global X YieldCo Index ETF (NasdaqGM: YLCO) helps investors access the burgeoning yieldcos asset class.

“YieldCos are formed when energy companies spin off fully developed assets, such as wind and solar farms, with long term contracts and an objective of returning cash flows to shareholders. Market capitalization for the YieldCo industry currently stands at $39 billion. With 11 announced IPOs in the pipeline, it has become an increasingly popular vehicle for energy firms,” according to a statement issued by Global X.

 To continue reading about this new ETF, YLCO, and the things it could do, click here.
ETF News

These ETFs Could Make You The Next Warren Buffett

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MarketsMuse blog update profiles the best ETFs to invest in according to Zacks Equity Research to become the next Warren Buffett. The ETFs range from technology, to financial, to consumer. This MarketsMuse update is courtesy of Zacks Equity Research article, “Follow Warren Buffett with These Stocks and ETFs“, with an excerpt below. 

Everybody dreams of becoming rich and famous like Warren Buffett, Carl Icahn, Daniel Loeb and David Tepper. After all, these Wall Street gurus have successfully put their money in the right place and continued to reap huge returns.

Buffett’s Berkshire Hathaway has enjoyed an average growth rate of about 20% annually. Furthermore, Berkshire Hathaway has added more than 104% over the last five years that is better than the gain of over 94% from the broader market ETF SPDR S&P 500 ETF (SPY) during the same timeframe.

Thanks to this achievement, following billionaires’ investment strategies is now a fad these days. While investing in Berkshire is always a good way of following Buffett, who is commonly known as The Oracle of Omaha, there are numerous other ways to reproduce this stock market veteran’s investment theme and jazz up one’s portfolio.

Normally, Buffett takes interest in companies trading below what he believes is their intrinsic value.He aims long-term outperformance and apparently ignores short-term downturns. We have analyzed a few stocks that remain Buffett’s favorites and highlight the related ETFs for investors who want to follow this investment veteran.

The ETFs that Zacks Equity Research recommend to invest in to follow in Warren Buffett’s footsteps are as follows:

  • iShares U.S. Financial Services ETF (IYG)
  • SPDR Consumer Staples Select Sector ETF(XLP)
  • Market Vectors Retail ETF(RTH)
  • Consumer Staples ETF (VDC)
  • NASDAQ Technology Dividend Index Fund (TDIV)
  • Direxion iBillionaire Index ETF (IBLN)
  • Validea Market Legends ETF (VALX)
  •  Global X Guru Holdings Index ETF (GURU)

To read more about why Zacks Equity Research named these ETFs the best to be like Warren Buffett, click here.

ETF News

Coal ETF’s Burns Dim

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While many are looking to move away from coal as a power source, such as China, the coal ETF, Market Vectors-Coal ETF (NYSEArca: KOL) and recently launched coal ETF, GreenHaven Coal Fund (NYSEArca:TONS), have to continued to demonstrate that trend as their fires dim down to a mere dust.  This MarketsMuse update profiles the dim outlook two above listed coal ETFs are facing as countries explore other sources of power. This update is courtesy of ETFTrends’ Tom Lydon and his article, “Coal ETF Outlook Growing Dim” with an excerpt. 

ETFTrends-logo

Some bargain hunters may be looking at the downtrodden coal industry and related exchange traded funds as the market remains near historic lows. However, coal remains depressed for a reason.

Over the past three months, the Market Vectors-Coal ETF (NYSEArca: KOL), which tracks the coal industry, has declined 6.9%. Additionally, the recently launched GreenHaven Coal Fund (NYSEArca:TONS), which is designed to offer investors with exposure to daily changes in the price of coal futures contracts, has decreased 3.6%.

Some may be tempted to catch the falling knife as the economy still depends on coal to meet growing electricity needs. However, the other fundamental factors may weigh on the space.

To continue reading about these coal ETFs bleak outlook, click here

ETF News

Billion Dollar ETF Stocks Up On Health Care

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MarketsMuse blog update profiles the rebalancing that the Direxion iBillionaire Index ETF has been doing and this time investing much of its energy in health care. This MarketsMuse update is courtesy of Benzinga’s article, “Billionaire-Tracking ETF Just Bulked Up On Health Car“. An excerpt of the article highlighting the rebalance is below.

Investing in some of the world’s top hedge funds may not be feasible for the majority of investors, yet that doesn’t mean they can’t participate in many of their best ideas.

The Direxion iBillionaire Index ETF (IBLN 0.15%) is one example of an ETF that seeks to harvest the top holdings from a select group of billionaire investors. These famed strategists are required to report their largest positions on SEC Form 13F filings — publicly-available information from which an index can be constructed.

IBLN selects 30 large-cap stocks from a pool of up to 10 billionaires and equal weights them across its portfolio. According to the fund company’s website, “IBLN is designed to help long term-investors pursue a better portfolio outcome by seeking excess returns relative to the S&P 500 Index.”

The latest IBLN rebalancing led to some interesting changes across the spectrum of holdings that reduced exposure to technology companies and bulked up on health care names.

It subsequently added the following new positions:

  • American Airlines Group Inc AAL 0.33% – Industrials
  • Applied Materials, Inc. AMAT 0.05% – Technology
  • DirecTV DTV 0.63% – Consumer Discretionary
  • Endo International ENDP 0.09% – Health Care
  • Humana Inc HUM 0.13% – Health Care
  • McKesson Corporation MCK 0.49% – Health Care

To continue reading about Direxion iBillionaire Index ETF‘s rebalance shifting to health care, click here.

ETF News

New Rules: B-Ds Can Skirt Finra Research Rules When It Comes to ETFs

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MarketsMuse ETF update profiles just-passed-by-Congress legislation that offers a sigh of relief for broker-dealers who aspire to frame ETF recommendations within the context of research (which might qualify them for ‘buyside research votes’), but have held back from issuing a buy, sell or hold recommendation for ETFs out of fear of Finra and/or SEC staffers sanctioning them.

All can guess that those lobbyists engaged by ETF issuers and sell-siders  who focus heavily on ETFs will be getting a hefty bonus in consideration for greasing the wheels and halls of Congress and helping brokerdealers creatively usurp Finra rules and regs when it comes to what is and what is not considered “research.” One group of folks not celebrating: top brass and salesman at Morningstar (read further)

Here’s the extract of the news from InvestmentNews.com

ETF Legislation approved this week by the House Financial Services Committee would allow broker-dealers to publish ETF research reports without the reports being considered offers to buy shares in the ETF.

The measure was co-authored by Rep. French Hill, R-Ark., and Rep. John Carney, D-Del.

A freshman legislator who came to Capitol Hill after working as a broker , Mr. Hill said most broker-dealers do not publish ETF research for fear of violating securities laws.

“This is a commonsense proposal,” Mr. Hill said at a May 20 committee hearing before the panel passed the bill. “With close to six million U.S. households holding and using ETFs, investors need access to this research.”

DOUBLE-DIGIT GROWTH

The ETF market has experienced double-digit annual growth over the past few years and, as of the end of April, included 1,496 funds with $2.1 trillion in assets, according to figures from Morningstar Inc.

As ETFs occupy a greater share of both retail and institutional investor portfolios, there’s a growing demand for insight about the vehicles, said Ben Johnson, director of global ETF research at Morningstar.

“There is a clear need for more research, more analysis across a very wide swath of the U.S. investor base,” Mr. Johnson said.

He said Mr. Hill’s bill is a good idea because investors would benefit from ETF research in the same way that they now can find research on individual securities and mutual funds.

If brokers issue their own ETF research, it could encroach on Morningstar’s turf. Morningstar can disseminate research through a so-called publisher’s exemption that applies to research organizations that aren’t regulated as securities firms.

“Any time there’s competition in the research space, that’s good for investors,” Mr. Johnson said. “It forces everyone to up their game.”

To continue reading this story from InvestmentNews.com, please click here

ETF News, People Profiles

ETF.com Appoints Matt Hougan as CEO-MarketsMuse

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MarketsMuse ETF department extends our congrats to exchange-traded fund guru Matt Hougan in connection with announcement this week that Matt has been elevated to the role of CEO of industry platform ETF.com.

ETF.com, the world’s leading authority on ETFs, named Matt Hougan, a longtime veteran in the world of exchange-traded funds, as its new chief executive officer. Hougan, 38, was previously president of North America for the firm. His appointment as CEO is effective immediately.

“Matt is both one of the world’s foremost experts on ETFs and an exceptional leader for our business,” Barnaby Grist, ETF.com’s chairman, who led the CEO search, said in a press release. “As the use of ETFs expands, Matt’s vision for how to educate, engage with and empower investors and financial advisors will drive better outcomes for investors and continued rapid growth at ETF.com.”

Hougan has worked at ETF.com for more than eight years, and was the fourth employee to join the company. Under his guidance, the company’s U.S. business achieved record results in the past year, including record attendance and revenue at its marquee conference, Inside ETFs, and dramatic growth in its core online and print media properties, ETF.com and ETF Report.

Jim Wiandt, ETF.com’s founder and former CEO, said he has full confidence in Hougan’s ability to lead the company’s next stage of growth. Wiandt founded the company in 2001.

“We chose Matt not just because of his extensive knowledge of exchange-traded products, but because he has demonstrated the organizational and leadership skills required to lead a growing and dynamic organization,” said Wiandt, who is now vice chairman and president of ETF.com’s Europe operation. Wiandt continues a key leadership role on the management team and board of directors.

‘ETF Master’

Hougan, a well-known figure in the world of ETFs who often appears on CNBC, envisions a growing and increasingly important role for ETF.com as more and more investors adopt ETF in their portfolios.

“As that use accelerates, we are more committed than ever to providing clear, independent and ETF-specific education, research and analysis,” Hougan said. “We have exciting plans in place that will help us become even more integral to our users’ investment decision-making and simultaneously reach a larger and larger audience than ever before.”

For the entire story from ETF.com, please click here

ETF News

Investors Brace For Bumpy Ride As Airline ETFs Hit A Rough Patch

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After a hot take off for the ETF, JETS, MarketsMuse blog update profiles the plunge airline stocks and ETFs have seen in the recent weeks ahead the summer season, which will then hopefully bring another boost to the stocks and ETFs. This blog update is courtesy of Zacks Research article, “Air Stocks and ETF Plunge: Warming Up for Summer?”, with an excerpt below. 

The airline stocks that were hot and soaring over the past few years suddenly lost their altitude in Wednesday trading session as the shares of major carriers nosedived as much as 10% on concerns that growth might outpace travel demand. This could result in lower fares and thinner profit margins.

This is because cheap fuel is encouraging carriers to increase the number of seats at the current fares, breaking the competitive discipline that helped the industry to earn record profits in the past.

Bright Summer Outlook

Despite the brutal plunge, airline stocks and the ETF are anticipating sunnier days in summer. This is especially true given the optimistic view from the Washington-based trade group Airlines for America.

The group expects airlines to see the busiest summer ever this year buoyed by an improving economy, accelerating job market and rising consumer confidence. The demand for U.S. air travel would hit a fresh high as 222 million travelers (or 2.4 million a day) are expected to fly from June 1 through August 31, up 4.5% year over year and much higher than a record of 217.6 million travelers seen in 2007.

To continue reading about the airline stocks and ETFs that are bracing the bumpy ride, click here

 

ETF News

As Predicted, The Sun Has Set On The Solar ETF’s Rise

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After months of warnings from market watchers, the Chinese solar stock, Hanergy Thin Film Power Group, started to set on a pretty powerful year so far. MarketsMuse blog update profiles the effects this Chinese stock has had on the Guggenheim ETF, which MarketsMuse has profiled before. This MarketsMuse update is courtesy of MarketWatch’s Victor Reklaitis and his article, “China solar stock implosion a reminder to look under ETF’s hood“

Many market watchers have warned this year about a highflying Chinese solar stock—Hanergy Thin Film Power Group—and its leading role in popular ways to bet on solar stocks like one Guggenheim ETF.

On Wednesday, Hanergy’s 0566, -46.95% aerial routine ended with a crash, as one Wall Street Journal headline put it. And the Hong Kong-listed stock’s dive after a meteoric rise was helping to take down the Guggenheim Solar ETF TAN, -7.79%

So what’s the takeaway?

“Investors should take care to look under the hood of the ETFs in order to understand what exposure they are possibly buying into,” said Markit analyst Relte Schutte in an email to MarketWatch on Tuesday about the solar ETF and Hanergy.

Schutte had noted in a May 6 commentary that about half of the Guggenheim ETF’s year-to-date jump of 40% was due to Hanergy’s surge of 157%. The ETF was about 12% exposed to Hanergy as of Tuesday, before its big plunge, making it the largest stock in that fund. Hanergy also has been the biggest holding in two rival ETFs, the Market Vectors Solar Energy ETF KWT, -6.88% and iShares Global Clean Energy ETF ICLN, -2.57%

To continue reading about the implications the crash the Hanergy Stock has had on the solar ETFs, click here.

ETF News

One Gold ETF Looks To Be Worthy Of A First Place Finish

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After a few rough years for gold as investors shifted other asset equities, things are starting to look up, especially for one ETF in particular. MarketsMuse blog update profiles Gartman Gold/Yen ETF (GYEN)  as one of the best ETFs to invest in for gold options. This update is courtesy of Zacks’ Equity Research article, “Is This the Safest Gold ETF for 2015?“, with an excerpt below explaining why GYEN could be the best gold ETF. 

Gold had one of its worst nightmares in the last two years as investors shifted to more risky asset classes like equities. This is especially true in the backdrop of the strengthening dollar and continued bullishness in the stock market, two conditions that spoilt the safe haven appeal of the yellow metal. The bleeding stretch led the metal to languish below the $1,200 an ounce level – almost near its lowest level since April 2010.

The start to 2015 was no different from the last two years as rising rate worries intensified at the beginning of the year. But the metal started to buck the trend since April. Weakness in the greenback in the wake of soft U.S. GDP in Q1 was the major driving force behind this uptrend.

What Are the Best Gold ETF Bets if Dollar Rises?

In most cases, gold investments are made via the U.S. dollar (which is presently at a roller coaster ride). So, it would be wise to look at the gold ETFs which are not linked to the greenback. Two such lucrative options are Gartman Gold/Yen ETF (GYEN) and Gartman Gold/Euro ETF (GEUR). While GYEN provides positive returns by using the yen for investing its assets in the gold market, GEUR does so with the euro.

Is GYEN the Best Option? 

After a nice show in 2013, the Japanese economy has been struggling since the second half of 2014. Japan’s growth in Q1 of 2015 has also been restrained by soft consumption. This ensures that the life of Japanese stimulus will be long as the economy is yet to stand on its own feet.

To continue reading about gold ETF option, GYEN, click here

ETF News

Nuveen Investments Has Returned To ETFs…Quietly

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MarketsMuse blog update profiles asset manager Nuveen Investments quietly returning to the world of ETFs.  This MarketsMuse blog update is courtesy of ETFTrends Tom Lydon’s article, “Nuveen Tiptoes Back Into ETFs“, with an excerpt below. 

After departing the exchange traded funds business in 2002, Nuveen Investments has returned in quiet fashion. The Chicago-based firm said Monday shareholders of the Nuveen Long/Short Commodity Total Return Fund (NYSEArca: CTF), have approved the plan to convert the fund into open-ended exchange-traded fund (ETF). The conversion plan is also contingent on customary regulatory approvals, according to a statement. “The Annual Meeting of Shareholders for the Nuveen Diversified Commodity Fund (NYSE: CFD) has been adjourned to June 15, 2015, to allow additional solicitation of votes on the proposed plan to convert the fund into an ETF,” according to Nuveen. Nuveen said in December it was planning to convert CTF and CFD into ETFs. CFD invests in an array of commodity futures and forward contracts. As of the end of November, the mutual fund allocated a combined 26.5% of its weight to oil and gold,according to issuer data.

The fund’s annual expenses total 1.75%. To continue reading about Nuveen’s quiet return, click here.

ETF News, Fixed Income

New Normal: Big Institutions Looking To ETFs Over Bonds

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MarketsMuse ETF and Fixed Income departments merge to profile trend on part of fixed-income focused hedge funds and institutional fund managers to use ETFs to express their bets on corporate bonds. This MarketsMuse blog update is courtesy of Bloomberg’s Lisa Abramowicz and her article, “A $200 Million Hedge-Fund Trade in Your Bond ETF Is Normal Now”. An excerpt from this article is below. 

Don’t be surprised if you see a huge chunk of cash simply evaporate one day from your exchange-traded bond fund. There’s a good chance it’s just a hedge fund cashing in on a bet.

An example of this can be found in BlackRock Inc.’s $5.1 billion long-term U.S. Treasuries ETF, which saw the greatest volume of withdrawals this year among similar funds. Among investors yanking cash was Passport Capital, the $4 billion hedge-fund firm run by John Burbank.

The firm sold its entire $217 million stake in the ETF in the period ended March 31, about three months after purchasing the shares, according to data compiled by Bloomberg.

On one hand, this is a remarkable amount of money, equal to about 4 percent of the fund at its current size. It’s also notable because ETFs have traditionally been marketed to individuals as a quick, easy way to invest in debt.

But that’s changing. These funds are increasingly being used by and advertised to big institutions, which are looking for the same efficiency as smaller investors at a time when it’s getting more difficult to execute big trades.

To continue reading about this new normal for both small and big investors, click here, for the article from Bloomberg’s Lisa Abramowicz and her article, “A $200 Million Hedge-Fund Trade in Your Bond ETF Is Normal Now”.