ETF Insider: Take Profits In A Sideways Market

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Equity markets endured another back-and-forth week as investors digested mixed earnings and lackluster economic data releases. Industry giants Apple and Caterpillar both surpassed analyst expectations, while AT&T, Verizon, and SanDisk all missed the mark. Investors also fretted over the latest new home sales report for the month of December, which came in below the previous month’s reading, missing estimates entirely. Euphoria and gains from the first half of the week quickly evaporated during the final two trading days as profit taking pressures prevailed, despite the fact that U.S. GDP growth came in at an impressive 2.8%.

Actionable ETF Trade Ideas Last Week’s Actionable ETF Ideas
Ticker Position Performance
GDX

Long


Up Arrow

9.0%
UUP

Long

No Trade
XBI

Short

Down Arrow

1.5%

Our picks from Monday’s Insider posted a mixed performance this past week, although our profitable trade was more than able to make up for our other two lackluster recommendations. Below, we highlight how our trade ideas fared during the week [sign up for a free trial of ETFdb Pro to get actionable ETF ideas every Monday, as well as access to more than 40 all-ETF model portfolios].

Trade #1 Long GDX: Up 9.0%

This ETF got off to a shaky start as it tumbled lower on Tuesday, managing to finish the day below last Friday’s closing price. Selling pressures continued into Wednesday and this ETF dipped as low as $51.27 a share in early morning trading, which was still a safe distance from our stop-loss at the $50 mark. Bullish euphoria struck mid-day however, and GDX soared backed by high trading volume as invsetors reacted to the Fed’s decision to keep interest rates low until late 2014. Momentum continued the following two days and this long recommendation generated a handsome 9% gain on the week.

Trade #2 Long UUP: No Trade

This ETF opened just a penny away from our stop-loss on Monday morning and dipped below the outlined $22.25 level in a matter of minutes, effectively voiding this recommendation all together. Our keen technical analysis saved us from entering a losing trade seeing as how UUP sank as low as $22.02 a share on Friday. We anticipate for selling pressures to accelerate if UUP fails to hold support at the $22 level.

Trade #3 Short XBI : Down 1.5%

This short recommendation got off to a great start as XBI sank lower on Monday, nearing the $72 level. Tuesday was frustrating because this ETF effectively ended the day right where it had opened Monday morning, erasing all of our gains from the previous day. Bullish momentum continued into Wednesday and XBI triggered our stop-loss at the $75 level; we stuck to our rules and got out of the trade, incurring a minor 1.5% loss on the week. Nonetheless, our technical analysis served as well seeing as how XBI charged as high as $76.57 a share on Friday.

ETFdb Portfolios

Retirement ETFdb Portfolios

Mixed news on Wall Street paved the way for choppy trading as investors were swayed back and forth, with equity indexes ending fairly flat on the week. The Aggressive portfolio led the way higher from the retirement group thanks to its equity-heavy composition, while our Low Volatility portfolio missed out on stellar gains given its more conservative approach. Despite up-and-down price action across stock and bond markets, all of our retirement portfolios ended the week in green territory.

ETFdb Portfolio Weekly Return
Aggressive 1.21%
30 Years Til Retirement 1.10%
Cheapskate 0.98%
Moderate 0.98%
20 Years Til Retirement 0.95%
10 Years Til Retirement 0.73%
Ready To Retire 0.65%
5 Years Til Retirement 0.49%
Low Volatility 0.24%

Regional ETFdb Portfolios

With no “bad news” coming out of Europe this week, investors saw their risk appetite increase, which translated into impressive gains across the globe. Our Africa-Centric portfolio led the way higher with a solid three point gain on the week, while our newly released BRIC-Or-Bust portfolio trailed closely behind. Equity market euphoria was abundant worldwide as each of our regional portfolios ended the week in positive territory.

ETFdb Portfolio Weekly Return
Africa-Centric 3.20%
BRIC-or-Bust ETFdb Portfolio 2.39%
LatAm-Centric 2.38%
Easy-As-ABC 1.88%
Asia-Centric 1.84%
Emerging & Frontier Markets 1.78%
Ex-U.S. 1.47%
Ex-Europe 1.10%
Euro Free Europe 0.99%
Global Titans 0.73%

Themed ETFdb Portfolios

Our High-Tech portfolio jumped ahead of the pack this week as better-than-expected earnings from Apple and Netflix paved the way higher for the technology sector as a whole. However, our defensive-minded Black Swan Hyperinflation portfolio also appreciated significantly after the Fed’s announcement to keep interest rates at historically low levels until late 2014 [see All Portfolio Returns].

ETFdb Portfolio Weekly Return
2012 2.86%
High Tech 2.51%
Black Swan Hyperinflation 2.14%
Futures Free Commodity 2.09%
Equal Weight 1.92%
Simple (But Effective) Safe Haven 1.80%
RAFI 1.50%
Energy Bull 1.33%
Small Cap 1.32%
High Tax Bracket 1.09%
High Yield 0.97%
Kitchen Sink 0.90%
Better-Than-AGG Total Bond Market 0.86%
Socially Responsible 0.79%
Actively Managed 0.66%
AlphaDEX 0.65%
Financials Free 0.65%
Alpha Seeker 2.0 0.51%
The Sky Is Falling -0.03%
Cheapskate Hedge Fund -0.28%
New ETF Highlights

The exchange-traded universe continues to evolve as several issuers filed plans with the SEC for new products and a handful of new fund hit the street this past week. Check out our ETF Launch Center for complete updates on all new ETFs.

ETF Launches

MSCI Emerging Markets EMEA Index Fund (EEME)

iShares launched their new MSCI Emerging Markets EMEA Index Fund, EEME, which is designed to measure the performance of equity securities in the emerging market countries of Europe, the Middle East, and Africa.

MSCI Emerging Markets Latin America Index Fund (EEML)

iShares introducted their new MSCI Emerging Markets Latin America Index Fund, EEML, which offers investors exposure to the performance of equity markets in seven Latin American countries, including Brazil, Mexico, Chile, Columbia, and Peru.

MSCI Norway Capped Investable Market Index Fund (ENOR)

  • Launch:  January 24th
  • ETFdb Category:  Europe Equities
  • Structure:  ETF
  • Expense Ratio:  0.53%

iShares debuted the second pure play Norway ETF with its launch of their MSCI Norway Capped Investable Market Index Fund, ENOR. The fund is designed to measure broad-based equity market performance in Norway.

Accuvest Global Opportunities ETF (ACCU)

  • Launch:  January 26th
  • ETFdb Category:  Global Equities
  • Structure:  ETF
  • Expense Ratio:  1.25%

AdvisorShares launched its new Accuvest Global Opportunities ETF, ACCU, which utilizes country-specific ETFs with the goal of generating excess returns relative to benchmarks such as the MSCI All Country World Index. This ETF consists of the five or six country ETFs representing the most attractive markets on a monthly basis.

MSCI Denmark Capped Investable Market Index Fund (EDEN)

  • Launch:  January 25th
  • ETFdb Category:  Europe Equities
  • Structure:  ETF
  • Expense Ratio:  0.53%

iShares debuted the first Denmark ETF with its launch of their MSCI Denmark Capped Investable Market Index Fund, EDEN. The fund is designed to measure broad-based equity market performance in Denmark, and it caps the weighting to any one security at 25%.

MSCI Finland Capped Investable Market Index Fund (EFNL)

  • Launch:  January 26th
  • ETFdb Category:  Europe Equities
  • Structure:  ETF
  • Expense Ratio:  0.53%

iShares made another industry first with its launch of their MSCI Finland Capped Investable Market Index Fund, EFNL. The fund is designed to measure broad-based equity market performance in Finland, and it caps the weighting to any one security at 25%.

MSCI United Kingdom Small Cap Index Fund (EWUS)

  • Launch:  January 26th
  • ETFdb Category:  Europe Equities
  • Structure:  ETF
  • Expense Ratio:  0.59%

iShares introduced its new MSCI United Kingdom Small Cap Index Fund, EWUS, which is designed to measure the performance of equity securities of small-capitalization companies in the British securities market.

MSCI Australia Small Cap Index Fund (EWAS)

iShares launched its new MSCI Australia Small Cap Index Fund, EWASwhich offers investors exposure to the performance of equity securities of small-capitalization companies in the Australian securities market.

MSCI Canada Small Cap Index Fund (EWCS)

iShares launched its new MSCI Canada Small Cap Index Fund, EWASwhich is designed to measure the performance of equity securities of small-capitalization companies in the Canadian securities market.

MSCI Germany Small Cap Index Fund (EWGS)

  • Launch:  January 26th
  • ETFdb Category:  Europe Equities
  • Structure:  ETF
  • Expense Ratio:  0.59%

iShares introduced its new MSCI Germany Small Cap Index Fund, EWGSwhich offers investors exposure to the performance of equity securities of small-capitalization companies in the German securities market.

Disclosure: No positions at time of writing.

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