Courtesy of post-distribution desk notes from WallachBeth Capital’s ETF Execution Expert, Chris Hempstead..
8am Monday June 11
Maybe Apple can solve the world’s problems. We find out today!
As global markets react positively to the news of yet another ‘solution’ to the European debt crisis, a soft poll of peers reveals they are not as cautiously optimistic as the tape might indicate.
The latest announcement of a $125bb rescue package for Spanish banks seems like yet another attempt to hold back an incoming tide with a pile of sand. For those of you who don’t spend time at the beach, it does not work; the water always finds a way around it and eventually consumes it.
With that in mind and more importantly should you be looking for creative ideas to take a contrarian view against what could be a short term rally, and it seems as I write this the markets have thrown in the towel already, there was a nice little article in the WSJ this morning about a little known ETF, HDGE– The Active Bear.
Additionally there was a write up on Seeking Alpha highlighting the highs and lows of HDGE since its inception in January 2011 as well as worthy comparisons versus –SDS-Proshares Ultra Short S&P 500 over both the short and long term.
HDGE is an interesting and unique actively managed ETF as there are no others like it. The fund managers Brad Lamendsdorf and John Delvecchio run the portfolio of short equities. While some other ETFs exist with partial short positions, the HDGE is all short all the time and it is NOT a leveraged fund.
The fund is quite liquid and can be traded in several multiples of its average daily volume with minimal impact to the prevailing market.
Also today we are all anxiously awaiting the rolling headlines from the Apple Worldwide Developers Conference. While rumors are always the rule heading into this event, Apple has been quite successful at keeping the content under wraps, leaving the potential for some surprises and of course disappointment from the street.
Keep an eye on these ETFs with a heavy weight of AAPL as they provide investors and traders a diversified way to capture some of the volatility likely to hit the tape once this event begins.
IYW-IShares US Dow Jones Technology Sector $70.37—AAPL weight is ~23%. While this fund has a lower ADV than some peers it is quite liquid and carry’s the largest weight of AAPL in non-leveraged ETFs.
XLK-Technology Select Sector SPDR $28.30—AAPL weight is 19.3%. The ETF and the underlying are both extremely liquid.
QQQ-Powershares QQQ Nasdaq 100 Index-$62.77—AAPL weight 19%. ETF, underlying and mini-futures are all liquid.