Tag Archives: ETFs

ETF News, People Profiles

ETFs with a Feminine Flair; $WIL She or Won’t She (Use these ETNs)?

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wsjlogoMarketsMuse Editor Note: We so greatly enjoyed today’s WSJ column from Daisey Maxey, we felt compelled to provide extracts below (The entire column can be found by clicking on logo to your left)

Catalyst Inc., a nonprofit focused on increasing opportunities for women in business, issued a report that shows that from 2004 to 2008, Fortune 500 firms with three or more female directors had an 84% better return on sales and a 46% better return on equity.

Call it the XX factor for investing.

It is an intriguing concept: investing in stocks of companies with female leadership. Backed by studies that say such companies perform better, fund companies are stepping in with investments that snub male-dominated companies, and bet on women

Barclays Women in Leadership ETN ($WIL). Investors pay for the privilege. The Barclays ETN charges an annual fee of 0.45% compared with a 0.10% fee for the SPDR S&P 500 ETF. SPY5.LN +0.10% Morningstar is generally not a fan of ETNs, says Mr. Goldsborough, citing credit risks and fees that can be hard for investors to understand.

“Everyone is talking about women in leadership,” says Barbara Byrne, vice chairman in investment banking at Barclays. The London bank has 80-plus ETNs, so the notes were the logical framework, and its research shows market demand, she says.

women inleadershipBarclays isn’t the only firm leaning in. Ellevate Asset Management LLC, owned by Sallie Krawcheck, former high-profile executive at Bank of America Corp. , teamed with Pax World Management LLC in June to launch Pax Ellevate Global Women’s Index Fund. It invests in companies that seek to advance women. The fund is the successor to Pax World Global Women’s Equality Fund, which was merged into it.

There are caveats to ETNs (which are unsecured debt) and to women-focused investing strategies. Female leaders are often appointed in times of poor company performance, so their posts may be precarious, say Michelle Ryan and Alex Haslam, professors at the University of Exeter in the U.K. That “glass cliff” could make such companies less attractive to investors, the researchers say. Continue reading →

ETF News, People Profiles, Strike Price, Tech Talk

Euro-based Bond Platform Offers RFQ Trading for ETFs; US-based OMEX Trades Ahead

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etf-strategy-header-940-92  Courtesy of ETF Strategy

“..MTS, one of Europe’s largest electronic fixed income trading venues, is to launch request-for-quote (RFQ) trading for exchange-traded funds (ETFs) via its multi-dealer-to-client MTS BondVision platform.

The new service will offer liquidity providers access to a diverse community of global institutional investors.

The platform will support ETF products listed on the Borsa Italiana and London Stock Exchange, both of which are owned by the London Stock Exchange Group PLC.

By offering RFQ as a new execution method in addition to the order book trading functionality currently offered by the two exchanges, MTS is seeking to improve the efficiency of executing these products and increase trading opportunities for all market participants..”

John Houlahan, OMEX Systems
John Houlahan,OMEX Systems

Observed John Houlahan, COO of US-based OMEX Systems, the broker-neutral OEMS platform used by leading ETF, option and futures market participants, and provides direct market access to multiple exchanges and liquidity centers, “Hats off to MTS. Even if RFQ is a functionality that fixed-income players as well as institutional equity trading desks are long-accustomed to, and that some of us are already well into next-generation request functionality, from a trading technology industry “business model” angle, the underlying story is clear: niche players offering single-asset class products are kidding themselves if they think that is a sustainable model.”

Added Houlahan, a 20-year veteran of the trading technology space, “MTS certainly seems to recognize that electronic trading for all but the most liquid fixed income products is still at the early stages of evolution and large-scale user adoption. It makes sense to leverage their technology, just as equities systems vendors are now attempting to step into the bond and futures arenas. Those who can overcome not just the technological and regulatory issues, but the political and cultural nuances that distinguish the ways  various assets actually trade in secondary markets will be remembered as real pioneers.”

For the full article from ETF Strategy, please click here

ETF News, People Profiles, Strike Price

ETF and Options Execution Firm Expands Global Footprint: More Hiring In Store

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wall-street-letter-logo  Courtesy of Wall Street Letter reporter Sean Creamer

Institutional brokerage WallachBeth Capital LLC will expand its staff to bolster electronic trading across exchange-traded funds and options over the next two years, according to Michael Wallach, CEO.

The agency broker-dealer aims to bring on 15-20 people, some of whom may be college interns who transition to permanent employment with the company, according to Wallach.  He added “this strategy ensures the staff has a rounded experience in the firm before taking up a permanent role.”

WB CEO Michael Wallach (r), Pres/COO David Beth (l)
WB CEO Michael Wallach (r), Pres/COO David Beth (l)

Beyond staff expansion, the brokerage, whose headquarters is based in the heart of Wall Street and maintains a footprint in the UK, is aiming to expand its ETF execution presence to South America to serve pension fund managers in these regions, Wallach noted. “ Many money managers throughout the world now trade US ETFs. We want to introduce our model to any region whose managers want and need real best execution services.”   To view the full article from WSL, please click here.

ETF News

Hedge Fund Traders Favor ETFs For a Reason

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indexuniverseCourtesy of Paul Amery, IndexUniverse.com

Hedge funds and index trackers are polar opposites: the highest- and lowest-fee ends of the investment product scale.

 

And yet a surprising number of hedge funders are fans of indexing. Reportedly, many are closet admirers, buying ETFs and index funds for their own portfolios—as though stepping out of a Ferrari and into a well-used family diesel when away from the public gaze.

 

Others have switched career to embrace tracker funds. Alan Miller, manager of a fund of ETFs at SCM Private, was once a hedge fund investor at New Star. Victor Haghani, partner at Long Term Capital Management in the 1990s, now looks after a $200 million portfolio of index funds and ETFs, Elm Partners.

 

Lars Kroijer, who ran an equity hedge fund, Holte Capital, between 2002 and 2008, is another convert. But the Dane no longer manages client money himself (though he sits on several fund boards). Instead, he’s turned author.

Following a well-received account of his hedge fund experiences (“Confessions of a Hedge Fund Manager”), published three years ago, Kroijer has written a new book, “Investing Demystified”, with the objective of explaining why index investing is the rational approach for almost all of us.

To continue reading the full story from IndexUniverse, please click above IU logo.

 

 

ETF News

New ETF of IPOs Is Better Than It Sounds: $IPO

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barrons  Courtesy of Brendan Conway

A new exchange-traded fund that invests in newly public companies isn’t as speculative at it seems at first glance.

Almost every day, I get word of a shiny new exchange-traded fund for some ephemeral trend or market sliver. So when news of an ETF of initial public offerings crossed my desk—just in time for Twitter’s hotly anticipated IPO next month—I expected more of the same. But the fund turns out to be different from, and an improvement on, the clubby and nontransparent IPO market. Don’t hop on the bandwagon, but for the right sort of risk-taking investor, there could be an untapped opportunity.

It turns out the surest way of investing effectively in newly public companies—as opposed to speculating on a first-day pop in a stock—is making sure the company will still be selling goods and services a few years from now. University of Florida economist Jay Ritter found three decades of outperformance (1980-2011) in IPO stocks with the biggest sales revenues before they go public. If a company sells a lot of products, it’s certainly less likely to be a Pets.com-type disaster. While this may sound obvious, it’s tough to put into practice. Small, newly public companies are tough to research and inherently risky investing propositions. They’re also not represented in the major stock indexes. Continue reading →

ETF News, Strike Price

Traders Wipsawed, The Tape Doesn’t Lie; Stock Prices Will Go Higher Before Lower:

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Rareview Macro LogoBelow courtesy of Rareview Macro;  MarketsMuse Editor caveat: Below is excerpt of independent opinion courtesy of contributor, this should not be considered a recommendation to buy or sell any type of securities.

Portfolio Update

The short position in the S&P 500 was covered and a long position was initiated yesterday at 1705. Our global equity beta position now consists of long US S&P 500, German DAX and Japan Nikkei. Into 1705, the strategy demonstrated the relative outperformance of our global beta thesis.

Also, with a US Government resolution now looking closer, a second unit of the long Mexico Peso against short Japanese Yen (MXN/JPY) position was added.

Both updates were sent real time via Twitter. Details are below for reference.

We are now outright directionally long on risk assets and our exposure is at the highest level of the year.  Neither is common in our portfolio, but we believe it is right at this time. We also remain confident that Gold will be significantly lower by the end of the year.

Note the US Dollar relief rally has started. This is most visible in Euro, Swiss Franc and Gold. Our view is that Dollar strength will be the shortest lived relative to the Euro. Today’s move lower in Gold is most welcome and upon Government resolution one has to be open to 1200 being tested on the downside.

Sight Beyond Sight is a subscription service provided by Rareview Macro. For the entirety of today’s update and to subscribe to a free 30-day trial (NO CREDIT CARD REQUIRED), please visit http://www.rvrmacro.com 

 

ETF News

Study Finds 22% Rise in Demand for ETFs

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wsjlogoCourtesy of the Wall Street Journal online edition

One in Ten Investors Now Hold at Least 50 Percent of their Portfolios in ETFs

MarketsMuse Editor: We caveat with: below study conducted by brokerage platform Charles Schwab & Co. , which offers its own ‘branded’ ETF products in cooperation with it issuer partners–and also maintains relationships with “preferred liquidity providers” in which Schwab receives payment for directing their customers’ ETF orders to said “liquidity providers.”

 

For a growing number of investors, exchange-traded funds (ETFs) are being embraced as a mainstay of a diversified portfolio. According to the 2013 ETF Investor Study by Charles Schwab, half of respondents plan to increase their ETF holdings over the next year — a 22 percent increase over those who said the same in 2012. Nearly one in ten investors (nine percent) now hold 50 percent or more of their portfolios in ETFs, more than double the four percent seen last year. Cost and fees continue to be critical factors when making ETF buying decisions, but topping expense ratios and trade commissions is the concern among investors that ETFs could contain hidden fees.

“Demand is up across the board, and investors who own ETFs appear to be more interested in the product than ever,” said Beth Flynn, vice president of ETF platform management at Charles Schwab. “We’re seeing less discussion of ‘if’ and more about ‘how’ investors will buy and use ETFs. We’re seeing an upward shift in sophistication among ETF investors, and a hunger to learn more.”

The 2013 ETF Investor Study by Charles Schwab is an online survey of more than 1,000 individual investors between the ages of 25-75 with at least $25,000 in investable assets and who have purchased ETFs in the past two years and/or are considering purchasing ETFs in the next two years. Similar surveys were conducted in 2012 and 2011, and certain questions were repeated in 2013 for benchmark purposes.  For the full article, please click here

ETF News

Equities Markets Get Slaughtered: An ETF Portfolio For Tony Soprano

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marketwatchCourtesy of Benzinga.com

 

Rest in peace James Gandolfini.

 

The actor most known for his role as Tony Soprano in HBO hit series The Sopranos died Wednesday while vacationing in Italy at the age of 51. While the Emmy Award-winning Gandolfini is likely to be most remembered for his role as the tortured New Jersey mafia boss, his acting accomplishments extend beyond The Sopranos.

 

A character actor for much of his career before The Sopranos made his a household name, Gandolfini, among other accomplishments, was nominated for a Tony Award in 2009.

 

Still, Tony Soprano was one of those larger-than-life roles than few actors ever attain, let alone execute in fashion on par with Gandolfini. If Tony Soprano were your broker, he might have you invested in some of the following ETFs.

 

iShares MSCI Italy Index Fund EWI -2.52% Before we’re accused of some kind of ethnic stereotyping, let’s acknowledge the reality that Tony Soprano was of Italian descent. So is the writer of this piece, 50 percent Italian in fact. All that aside, since Italy is one of the “I’s” in the infamous PIIGS acronym, EWI is usually worth keeping an eye on. Owning it from the long side is usually a different story.

 

It has gone somewhat unnoticed that yields on Italian 10-year bonds have crept up to 4.26 percent from four percent six weeks ago. However, that is not Italy’s biggest problem. Italy had an unemployment rate of 12 percent in April, not nearly as bad as Spain, but youth unemployment is pushing 37 percent.

 

That is a dangerously high number and one that could portend civil unrest down the road. At the very least, it dampens EWI’s allure for long-term investors. Continue reading →

ETF News, Tech Talk

Follow-On: Major Exchange Slug Fest in Battle for ETFs

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tradersmag Courtesy of Tom Steinert-Threlkeld

Nasdaq, NYSE and BATS are slugging it out with incentives, new order types and a new exchange to resuscitate trading in ETFs…

Once it worked. Now, not so much.

For years, the Nasdaq Stock Market designated a single market maker for each exchange-traded product. Later, the BATS Exchange treated exchanged-traded products no differently than other equities. No special treatment for trading in ETFs.

Meanwhile, NYSE Arca created lead market makers and gave them premium rebates for trading in exchange-traded funds, and gave other market makers rebates as well.

Both models worked fine, as institutional and retail investors pulled out of mutual funds that invested in stocks and rushed in droves into exchange-traded funds that also held baskets of stocks-and could be traded like them, too.

Only about 82 million shares of ETFs were traded in an average day in 2004, accounting for 2.15 percent of consolidated volume. By 2008-at the height of the credit crisis-that had surged to 1.1 billion shares and 12.5 percent of all trading. By 2011, the 1.2 billion shares traded every day in exchange-traded products of all kinds accounted for 15.4 percent of all trading.

Then, the hammer dropped. Daily volume fell 22.0 percent last year, to 941,000 shares a day. And the share of trading went down to 14.3 percent, by Rosenblatt Securities’ count.

The bloom was off the boom-even as investors keep pouring money into the funds, adding another $16.6 billion into North American ETFs in the first quarter of 2013, with $1.4 trillion invested all told in ETFs, in the United States.

“Investing in ETFs is continuing to increase. It’s just happening in places other than the secondary markets, like NYSE Arca or Nasdaq or BATS,” said Laura Morrison, senior vice president for global indices and exchange-traded products at NYSE Euronext.

For the full article courtesy of TradersMagazine, please click here

ETF News

Beware of Index Funds That Aren’t

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wsjlogoCourtesy of Michael Pollock, Wall Street Journal

Index funds aren’t always what you think they are. And your innocence could cost you.

To most investors, of course, index funds are passive investments, providing returns that basically mirror the market they are designed to follow. They charge low fees and carry no hidden costs.

But the old definition is starting to change. Unlike simpler, earlier generations of index and exchange-traded funds, new variations are morphing into products that risk putting many investors afoul of the old rule about not investing in things you don’t understand.

As more money flows toward indexing, some fund firms are trying to capture a share of it by creating complex ETFs that blend active management and indexing. The fees charged by some of these funds can be several times those charged by traditional index funds. And, because they sometimes specialize in very narrowly defined, less-active markets, they can wrack up hidden trading costs.

Consider one newer, complex index fund, IQ Hedge Multi-Strategy Tracker, a four-year-old ETF from IndexIQ Advisors LLC that tries to duplicate the returns of hedge-fund investments. For example, when hedge funds go “short” in a certain market, betting that prices will decline, IQ Hedge mimics that activity by taking a short position in an ETF that focuses on that market. Hedge funds follow lots of complex strategies in many different markets, however, and IQ Hedge tries to copy many of them simultaneously.

It requires considerable expertise to know how to use such an index fund effectively in a diversified portfolio. “Investors who aren’t sophisticated in sector rotation and asset allocation might be making a mistake to invest in some of these new, complex products without understanding what’s inside each fund,” says Anthony Hohmann, who oversees ETF analytical products at S&P Capital IQ, a unit of McGraw-Hill Cos.

That doesn’t mean the newer funds aren’t worth looking at. But before you buy, here are some things to consider.

For the balance of the WSJ article, please click here

ETF News

Nasdaq Sets Q2 Launch for ETF Market-Maker Incentives

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tradersmag  Courtesy of Tom Steinert-Threkeld

Nasdaq OMX Group said Wednesday that it will be able to launch its planned program for paying market makers to trade in particular exchange-traded funds.

The Market Quality Program will launch by the end of June, Nasdaq OMX said Wednesday. The Securities and Exchange Commission in March approved the plan on a pilot basis.

Under the program, sponsors of exchange-traded funds will be able to contribute funds to Nasdaq, which in turn can be used to pay market makers to incent them to handle particular funds.

The sponsor will pay Nasdaq OMX an annual fee of $50,000 to $100,000 per ETF, in addition to standard listing fees. The market quality program fee can get rebated, under certain circumstances. Rebates will be made quarterly.

Payments, according to a note to traders, will be made if a market marker:

  • Maintains quotes at or better than the National Bid and Best Offer (NBBO) for 25% of the trading day for 500 shares;
  • Posts a market with a bid no less than 2% away from the best bid and an offer that is no greater than 2% away from the best offer 90% of the trading day; and
  • Provides an aggregate of 2,500 shares of displayed liquidity on the bid side and an aggregate of 2,500 shares of displayed liquidity on the offer side.

An ETF is no longer in the program when trading achieves average volume of 1 million shares a day for three months in a now. Continue reading →

Tech Talk

Trading Technology Vendor Touches ETF Space; Game-Change Create/Redeem Widget for APs and Execution Desks

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MarketsMuse team picked up on recent news release from broker-neutral OMEX Trading Systems that included a brief mention of a new feature [built by special request] that analyzes whether its cheaper to effect a “create” vs. executing in the ETF cash market, and implements the create through a basket-trade application.

Other new system enhancements from this boutique trading system and DMA provider include an assortment of new FIX connections to various clearing and custodian destinations, an updated menu of algorithms, a widget for multi-custodian trade allocation, DMA to futures markets, more listed options trading tools (including unlimited-leg option spread orders), updates to charting and Level II displays, and a range of updates to the OMEX back-office, accounting, compliance and risk management modules.

According to OMEX Chief Operating Officer John Houlahan, “Its becoming harder for us to stay “below-the-radar”, only because we are increasingly displacing various trading system vendors who merely offer components, as opposed to an all-in-one solution that delivers uniquely robust front-end DMA, OMS and EMS functions, as well comprehensive risk management tools, compliance, reporting and accounting modules for broker-dealers, as well as for select hedge funds and RIAs.”  Keep reading for the link to the release.. Continue reading →

ETF News

The Risk On Rally That Keeps on Ticking: Benzinga

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benzinga-logo Courtesy of Marketwatch/Benzinga.com

It seems like whenever the rally in the S&P 500 is discussed, at least when it is talked about in positive terms, it is associated with favorite Wall Street vernacular such as “risk on” and “animal spirits.”

With the SPDR S&P 500 SPY -0.39% up almost 41 percent in the past three years, including dividends paid, it is not illogical to think risk on has ruled the roost over that time.

A closer examination of sector ETFs paints a different picture. As was highlighted on Monday, the Consumer Discretionary Select Sector SPDR XLY -0.62% has been the standout of the nine sector SPDRs funds over the past three years. Thing about XLY is the ETF has a beta of one against the S&P 500 and annualized volatility of 16.88 percent.

Said another way, XLY is not the most volatile, nor is it the riskiest ETF out there. Simply put, this has been a risk off rally and it has been that way for three years. Returns accrued by sector ETFs prove as much.

High Beta Disappoints…Sort Of. Here is a trivia question: Excluding XLY, which is the only sector SPDR that is perceived as a high-beta play to outpace SPY over the past three years? Answer: The Energy Select Sector XLE -0.13% . XLE has topped SPY by 350 basis points over that time while being 660 basis points more volatile.

The 23.1 percent gain for the Materials Select Sector SPDR XLB -0.85% only look good in comparison to the 19.4 percent gain for the Financial Select Sector SPDR XLF -0.49% . Those ETFs have betas of 1.22 and 1.23, respectively, against the S&P 500. Continue reading →

ETF News, Global Macro Strategy

4th Annual World Series of ETFs-Boston

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wsetfs

Hosted by IMN, this is a must-attend event for hedge fund managers, institutional portfolio managers, RIAs and financial planners active within the exchange-traded-fund (ETF) space.

This year’s speakers and panelists include leading sell-side trading desk professionals, market strategists and top-gun investment managers.

Click on the image above for the conference website and more information.

ETF News, Tech Talk

Nasdaq OMX Plan: Convert PSX Exchange to ETF Exchange

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Csecurities technology monitorourtesy of Tom-Steinert-Threkeld

Nasdaq OMX Group plans to re-launch its PSX exchange as a “better trading venue” for exchange-traded funds, notes and other related products, as early as next month.

The exchange will execute trades in all National Market System securities, but will give special incentives to retail and institutional investors to participate as well as special benefits to firms that register as market makers, committing to make continuous two-sided quotes on exchange-traded products.

Neither a filing with the Securities and Exchange Commission nor a Nasdaq official with its Transaction Services division describe the incentives that will be given to investors to place orders on PSX nor the benefits that will be provided market makers.

“The unique features that will make PSX compelling we can’t go into today,’’ the Transaction Services executive said Tuesday afternoon. “We are keeping that under our hats for a couple weeks.”

Nasdaq OMX PHLX, the formal name of the exchange, filed a document dated March 8, 2013, describing its plan to changeover PSX to an exchange that “in all material respects” has rules for handling buy and sell orders that mirror those at Nasdaq OMX’s other two exchanges.

These are the Nasdaq Stock Market, which handles about 16.5 percent of all equities trading in the United States, and Nasdaq BX, which has as its differentiating factor the payment of rebates to market participants who remove liquidity from its market.

The move to match rules among all three Nasdaq exchanges means that orders at PSX will be handled in what is known as price-time priority. This favors the speed at which orders arrive. Continue reading →

ETF News, People Profiles

ETFs Spike Above 30% of Market Trading as Euro Fears Return: ETF Trends

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etftrends logo imagesCourtesy of John Spence, ETF Trends

The percentage of ETF trading relative to overall volume tends to shoot higher in headline-driven markets when asset classes are moving together on macroeconomic or political events.

That’s exactly what happened on Monday when global markets swooned on fears parliamentary elections in Italy will result in political gridlock. After months of simmering on the back burner, Europe’s debt crisis roared back into the news. [Italy ETF Swings Lower on Berlusconi, Election]

On Monday, ETFs accounted for 32% of overall dollar volume, and there have been multiple sessions in the past week when the share rose above 30%, says Chris Hempstead, director of ETF execution services at WallachBeth Capital.

Chris Hempstead WallachBeth Sep 2012 321
Chris Hempstead, WallachBeth Capital

“It’s rare when ETF volume goes above 30%,” he said in a telephone interview Tuesday morning.

Hempstead said he has seen the figure approach 40% on some days during the past few years.

“ETF trading spikes when people think events are highly correlated and macro in nature,” he noted. “When stock pickers are having a tough time and market correlations rise, that’s when we see the ETF percentage of overall volume start to creep up.”

For example, trading volume in volatility-linked ETFs soared in Monday’s risk-off attack as investors looked for shelter and hedges. The CBOE Volatility Index has jumped 54% in a week. [Volatility ETF Trading Surges on Market Jitters, VIX]

“When the percentage of ETF trading in markets pops, a lot of it is people putting on trades to hedge bets. It’s not buy-and-hold,” Hempstead said. Continue reading →

ETF News

Franklin Templeton Planning First ETF, IndexIQ Files For Two US Equity Funds

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etfdb images Courtesy of Carolyn Pairitz

While the U.S. markets continue their bull run to baffle even the best investors on Wall Street, the ETF market has started to take off in the last two weeks, with a number of new funds entering the space. After the slow down of new funds since mid-January, the solid economic data being released from around the world has helped issuers recognize that now is a great time for new funds. For some institutions its their first time venturing into the industry, while others are just adding to their army, as both Vanguard and IndexIQ have  filed interesting proposals with the SEC [see ETF Database Launch Center].

California-based mutual fund firm, Franklin Templeton has filed for their very first ETF to meet the growing needs of their investors:

  • Franklin Short Duration Government ETF: This actively-managed ETF will own U.S.-issued debt, ranging from Treasuries to mortgage-backed securities to create a shorter duration portfolio of bonds. Focusing on shorter duration bonds could prove to be a very popular investment theory, as many investors are starting to hedge their funds against the eventual rise in U.S. interest rates.
IndexIQhas laid the groundwork for two new domestic equity ETFs focused on driving growth and innovation:
  • IQ Fastest Growing Companies ETF: This ETF will invest in 50 quickly growing U.S. companies, to be determined by a number of factors including sales, net income, cash flow growth and total return. This strategic exposure to companies that not only currently have high growth indicators but also have featured high returns in the past, may interest investors who are looking for a bit of a riskier play on the U.S. equities market.
  • IQ Innovation Leaders ETF: Using a rule-based proprietary benchmark, this ETF is intended to invest in 100 companies that are seen as innovative based on their sales growth, research and development of assets and expenses, along with retained earnings growth. Another requirement of inclusion, these growing firms need to have a market cap of at least $300 and be a U.S. firm.
ETF News

Benzinga Asks: Is This ETF Home to Buffett’s Next Target?

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benzinga-logoCourtesy of the ETF Professor at Benzinga.com

The $28 billion purchase of ketchup king H.J. Heinz (NYSE: HNZ) by Warren Buffett’s Berkshire Hathaway (NYSE: BRK-A) and Brazilian financier Jorge Paulo Lemann has had a predictable result. Traders and investors want to know who is next; what company will be Buffett’s next elephant?

Buffett has an enviable problem: Berkshire’s cash hoard. Even after committing $12.1 billion for Heinz, Berkshire still has $15 billion left to go shopping with, and that number grows by the month according to Bloomberg.

By his own admission, Buffett’s thirst for big deals, or “elephants” as he calls them, is not quenched. That likely means traders and investors are already trying to figure out what company could be next on Berkshire’s shopping list.

As has been previously noted, ETFs ranging from the Market Vectors Coal ETF (NYSE: KOL) to the Industrial Select Sector SPDR (NYSE: XLI) are home to some potential Berkshire targets.

Following the Heinz deal, another ETF has jumped to the forefront of the Berkshire deal speculation conversation. That ETF is the PowerShares Dynamic Food & Beverage Portfolio (NYSE: PBJ). Shares of PBJ, which is home to almost $111 million in assets under management, have jumped 2.2 percent in the past week and are now trading at an all-time high.

The ETF’s recent bullishness is due in large part to the Heinz deal because that stock is is PBJ’s largest holding, accounting for 5.7 percent of the fund’s weight. To be fair, some of PBJ’s recent upside has come by way of Constellation Brands (NYSE: STZ), another top-10 holding in the ETF, making a deal with AnheuserBusch InBev (NYSE: BUD) that gives the former rights to sell Corona and other Grupo Modelo beer labels in the U.S.

Still, near-term ebullience pertaining to PBJ is likely to be fueled by speculation that the ETF is home to another Buffett acquisition candidate. Including Heinz, PBJ is home to 30 stocks. Of the remaining 29 stocks, eliminating unlikely Berkshire targets is not difficult.

Read more: http://www.benzinga.com/trading-ideas/long-ideas/13/02/3345461/is-this-etf-home-to-buffetts-next-target##ixzz2LNs9azVR