ETF Insider: Stocks Simmer As Fed Twists Again

ETF Database

Stocks markets endured another week of back-and-forth trading as stimulus hopes collided with looming threats from Europe and concerning economic data releases on the homefront. The much anticipated FOMC announcement was rather anticlimactic as markets seemed apathetic to the Fed’s decision to extend Operation Twist. Chairman Bernanke did leave some hope on the table as he mentioned that additional stimulus measures would still be considered if the labor market does not materially improve in the coming months [see also How To Pick The Right ETF Every Time].

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

Long

Down Arrow

-0.4%
MOO

Long

Up Arrow

+0.6%
UUP

Long

Up Arrow

+0.3%

Our picks from Monday’s Insider posted a positive performance during an otherwise volatile trading week on Wall Street. 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 45 all-ETF model portfolios].

Trade #1 Long FXG: Down 0.4%

This recommendation got off to a strong start as shares of FXG rallied on Monday, closing just above the $24 level. This ETF drifted sideways for the next two days, only to fall victim to rampant profit-taking pressures on Thursday alongside major equity indexes. FXG sank as low as $23.58 a share on Thursday before drifting a bit higher to close out the week. Thursday’s sell-off wiped out all gains in this position, leaving us with a minor 0.4% loss on the week.

Trade #2 Long MOO: Up 0.6%

MOO started off the week on a positive note, climbing higher from the opening bell on Monday up until Wednesday afternoon as shares hit a weekly high at the $48.69 mark. Similar to FXG, MOO could not evade selling pressures on Thursday, sinking back down below $47 a share. This ETF inched higher to close out the week on a positive note, leaving us with a minimal 0.6% gain on the week.

Trade #3 Long UUP : Up 0.3%

This recommendation got off to a concerning start as the  first half of the week saw bullish forces in the equity market creating headwinds for the U.S. dollar. Nonetheless, uncertainty was quick to return to Wall Street as the FOMC announcement failed to bolster stocks higher, as many had hoped for. This defensive recommendation served us well despite starting off in a hole, returning a minimal 0.3% gain  on the week.

ETFdb Portfolios

Retirement ETFdb Portfolios

Our plain vanilla retirement portfolios all edged higher this week with our 30 Years Til Retirement taking the lead. Choppy trading created headwinds for our 5 Years Til Retirement and Ready To Retire portfolios.

Regional ETFdb Portfolios

Our Asia-Centric portfolio was able to clinch a gain during an otherwise frustrating week for equity markets thanks to its unique investment strategy. On the flip side, our Africa-Centric portfolio lagged behind.

Themed ETFdb Portfolios

Our High Tech portfolio took the lead this week as gains in the domestic technology sector carried it higher.

New ETF Highlights

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

ETF Launches

United States Metals Index Fund (USMI)

  • Launch:  June 19th
  • ETFdb Category: Metals
  • Structure: ETF
  • Expense Ratio:  0.70%

US Commodity Funds brought to market an ETF for tracking the performance of precious and industrial metals that show the most significant backwardation or moderate contango. This rules-based index ensures that exposure is spread across multiple maturities and is an excellent ETF for investors frustrated by the nuances of futures-based trading.

EcoLogical Strategy ETF (HECO)

  • Launch:  June 20th
  • ETFdb Category:  All Cap Equities
  • Structure:  ETF
  • Expense Ratio:  0.95%

Huntington brought to market an actively-managed ETF that seeks to give investors exposure to a mix of companies that “have positioned their business to respond to increased environmental legislation, cultural shifts towards environmentally conscious consumption, and capital investments in environmentally oriented projects.” As sentiments of social responsibly begin to permeate the investment world, funds like HECO will be important tools within any investor’s portfolio.

North American Energy Infrastructure Fund (EMLP)

  • Launch:  June 21st
  • ETFdb Category:  MLPs
  • Structure:  ETF
  • Expense Ratio:  0.95%

First Trust brought to market an actively-managed ETF aimed at giving investors exposure to U.S. and Canadian energy infrastructure companies. Because MLPs are required to distribute substantial portions of their earnings to receive certain tax advantages, these securities are known to offer hefty yields. Energy infrastructure companies rely on strong, industry-tested fundamentals; a quality that will surely aid them in this time of growing technological development demand.

Disclosure: No positions at time of writing.

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