While investors can now benefit from an amazing array of exchange-traded fund (ETF) choices, some of them fail to live up to their billing. These funds often pursue complex, glamorous-sounding strategies that lure investors — but often woefully underperform. Two funds in particular warrant closer scrutiny, due to their large popularity: PowerShares S&P 500 Low Volatility (NYSE: SPLV) and IQ Hedge Multi-Strategy Tracker ETF (NYSE: QAI) have problematic structures, and are delivering subpar returns. #-ad_banner-#A Low Volatility Fund That Fluctuates More Than The Market With net assets of about $5 billion, PowerShares S&P 500 Low Volatility is attracting its… Read More

While investors can now benefit from an amazing array of exchange-traded fund (ETF) choices, some of them fail to live up to their billing. These funds often pursue complex, glamorous-sounding strategies that lure investors — but often woefully underperform. Two funds in particular warrant closer scrutiny, due to their large popularity: PowerShares S&P 500 Low Volatility (NYSE: SPLV) and IQ Hedge Multi-Strategy Tracker ETF (NYSE: QAI) have problematic structures, and are delivering subpar returns. #-ad_banner-#A Low Volatility Fund That Fluctuates More Than The Market With net assets of about $5 billion, PowerShares S&P 500 Low Volatility is attracting its share of investors. The allure is in the name, which suggests broad exposure mainly to U.S. stocks with minimal volatility. But the fund provides neither of these virtues especially well. Whereas the S&P 500 includes the 500 largest firms with Nasdaq or New York Stock Exchange listings, SPLV is actually based on a much smaller universe: the S&P 500 Low Volatility Index, which only consists of 100 stocks (the 20% of S&P 500 components with the least volatility over the past year). So the diversification of the fund isn’t nearly what the fund’s name implies. Does the fund provide reduced… Read More

#-ad_banner-#Health care stocks have delivered the strongest recent gains of any sector. As a group, they have risen  roughly 24% annually over the past five years, topping the rate of return from the next-best sector — consumer cyclicals — by more than three percentage points. Look for this outperformance to continue. Among the sector’s strongest catalysts: the Affordable Care Act (aka Obamacare), which looks like it’s here to stay following a recent Supreme Court decision to uphold the premium subsidies available under the Act. Despite harsh criticism and numerous repeal attempts, the five-year-old law has proven to be a boon… Read More

#-ad_banner-#Health care stocks have delivered the strongest recent gains of any sector. As a group, they have risen  roughly 24% annually over the past five years, topping the rate of return from the next-best sector — consumer cyclicals — by more than three percentage points. Look for this outperformance to continue. Among the sector’s strongest catalysts: the Affordable Care Act (aka Obamacare), which looks like it’s here to stay following a recent Supreme Court decision to uphold the premium subsidies available under the Act. Despite harsh criticism and numerous repeal attempts, the five-year-old law has proven to be a boon to many health care firms by getting millions of previously uninsured people into the market for health care products and services. The graying of the U.S. population is a powerful growth catalyst, too, progressively increasing health care utilization as age-related maladies surge. Clearly, broad exposure to health care stocks makes good sense. The question is: how best to get that exposure? For investors who favor actively managed, no-load mutual funds, I’ve identified three top choices. They all have high performance ranks and reasonable expense ratios. But they’re noticeably different in terms of risk. Here are all the pertinent details. Vanguard… Read More

#-ad_banner-#Just because you ignore something doesn’t mean it will go away. At least that’s the view of the American Society of Civil Engineers. They’ve been repeatedly sounding the alarms regarding our nation’s rapidly-crumbling infrastructure, and their calls to action only grow louder. In their most recent quadrennial report card these engineers handed out a grade of D+, and estimate it would take $3.6 trillion to get our schools, roads, ports, highways and railroads up to snuff. Though Washington remains in denial about this huge problem, it will inevitably require hundreds of billions… Read More

#-ad_banner-#Just because you ignore something doesn’t mean it will go away. At least that’s the view of the American Society of Civil Engineers. They’ve been repeatedly sounding the alarms regarding our nation’s rapidly-crumbling infrastructure, and their calls to action only grow louder. In their most recent quadrennial report card these engineers handed out a grade of D+, and estimate it would take $3.6 trillion to get our schools, roads, ports, highways and railroads up to snuff. Though Washington remains in denial about this huge problem, it will inevitably require hundreds of billions of dollars just to keep our infrastructure report card from getting any worse. In 2012, I looked at the companies that are best-positioned for this challenge. A year later, I took a look at the best infrastructure-focused exchange-traded funds (ETFs) for investors to consider. Yet since my last look at this theme, a new investment reality has taken root. While the United States will eventually start investing in infrastructure, some countries aren’t deferring this badly-needed investment. They’re spending a lot of money on infrastructure right now. China has been an ongoing… Read More

At the start of 2015, investors could choose from 1,411 exchange-traded funds. And that figure keeps on growing as fund sponsors open three or four funds for every one that they close. These firms are launching funds simply because the demand is there. But how much is too much? After all, so many new ETFs these days seem to be quite similar to existing offerings. For example, there are now dozens of ETFs that track the S&P 500, or a basket of stocks that are substantively similar.  As far as I’m concerned, it’s much more interesting to discover new… Read More

At the start of 2015, investors could choose from 1,411 exchange-traded funds. And that figure keeps on growing as fund sponsors open three or four funds for every one that they close. These firms are launching funds simply because the demand is there. But how much is too much? After all, so many new ETFs these days seem to be quite similar to existing offerings. For example, there are now dozens of ETFs that track the S&P 500, or a basket of stocks that are substantively similar.  As far as I’m concerned, it’s much more interesting to discover new ETFs that aren’t simply the “same-old, same-old.” Here’s a look at five ETFs that have launched in 2015, and deserve clear consideration if you want the best lazy portfolio for 2015. Innovator IBD 50 ETF (NYSE: FFTY) Here at StreetAuthority, we are big fans of companies that seek out — and profit from — innovation.  In fact in our Top 10 Stocks newsletter, we have a portfolio of stocks that we call “American Innovators.” This new ETF, launched in April, holds a basket of 50 innovative companies, many of which are launching products. Top holdings include chipmaker, Avago Technologies… Read More

One of my favorite types of stocks is those that have recently hit new all-time highs. That’s because with no overhead resistance in their path there is nothing to stop them from moving even higher from a technical perspective. And when that stock has an upbeat fundamental outlook to support the strong technical picture, I know I have likely found a winner. That’s why I’m enthusiastic about Dollar General (NYSE: DG), the largest U.S. discount retailer by store count. The stock is in a powerful uptrend, making new high after new high this year. A quick note before we get… Read More

One of my favorite types of stocks is those that have recently hit new all-time highs. That’s because with no overhead resistance in their path there is nothing to stop them from moving even higher from a technical perspective. And when that stock has an upbeat fundamental outlook to support the strong technical picture, I know I have likely found a winner. That’s why I’m enthusiastic about Dollar General (NYSE: DG), the largest U.S. discount retailer by store count. The stock is in a powerful uptrend, making new high after new high this year. A quick note before we get to the trade: Many investors are reluctant to buy stocks near 52-week highs, regardless of any positive news or information about the company. This is due to “buy low, sell high” conditioning. Yet, there is proven reason why this is a huge mistake. If you’re serious about momentum investing, there is a presentation I think you should see. #-ad_banner-# Dollar General — which sells everything from A to Z (apparel to Ziplock bags) — has over 12,000… Read More

The great bond exodus may have begun. Fears of Federal Reserve-induced interest rate increases are pushing bond yields up and bond prices down. In fact, more than $1.2 trillion in value has been wiped out in the global bond market since April.  The selloff has accelerated when the June employment report showed that wages in May increased by the most since August 2013. Signs of an economic recovery in Europe have also pushed losses on global bonds even further. The yield on the German 10-year bund has jumped nearly ten-fold since late April. #-ad_banner-#The fallout is already being… Read More

The great bond exodus may have begun. Fears of Federal Reserve-induced interest rate increases are pushing bond yields up and bond prices down. In fact, more than $1.2 trillion in value has been wiped out in the global bond market since April.  The selloff has accelerated when the June employment report showed that wages in May increased by the most since August 2013. Signs of an economic recovery in Europe have also pushed losses on global bonds even further. The yield on the German 10-year bund has jumped nearly ten-fold since late April. #-ad_banner-#The fallout is already being felt with bond funds. The iShares 20+ Year Treasury Bond Fund (NYSE: TLT) and the SPDR Barclays Long-term Corporate Bond ETF (NYSE: LWC) have both lost roughly 10% in the past two months. Despite the idea that bonds are a safe investment and a hedge against stock market losses, the correlation between global bonds and stocks has recently increased to 0.30, the highest correlation since the Federal Reserve announced it would begin tapering quantitative easing in 2013. That means returns on stocks and bonds are moving in similar directions and there may be nowhere to hide for investors. Looking for… Read More

Exchange-traded funds (ETFs) are exploding in popularity with retail and institutional investors alike. Financial services firm Price Waterhouse Coopers expects the ETF industry to at least double to $5 trillion in assets under management by 2020. This will mean big profits for two asset management companies who are leaders in the industry. Exchange-traded funds are mostly commodity products. There are dozens of companies that offer an S&P 500 ETF, for example, and all hold the exact same companies. The best way an asset manager can differentiate itself among competitors is to become the lowest cost provider,… Read More

Exchange-traded funds (ETFs) are exploding in popularity with retail and institutional investors alike. Financial services firm Price Waterhouse Coopers expects the ETF industry to at least double to $5 trillion in assets under management by 2020. This will mean big profits for two asset management companies who are leaders in the industry. Exchange-traded funds are mostly commodity products. There are dozens of companies that offer an S&P 500 ETF, for example, and all hold the exact same companies. The best way an asset manager can differentiate itself among competitors is to become the lowest cost provider, which means being the biggest. ​BlackRock, Inc. (NYSE: BLK) is a global asset management business and the world’s largest provider of ETFs. It has more than $1 trillion under management, spread across its many iShares funds. Blackrock is  growing assets under management in the iShares business at a compounded annual growth rate of 16% over the past five years. This rapid growth combined with a scalable business and low fixed costs, allows Blackrock to keep costs to customers low, which attracts more customers and assets. iShares is only one quarter of Blackrock’s total business, but the evidence of the business’… Read More

Investors on the prowl for top-quality holdings typically seek two things: a history of robust dividends and the potential for substantially greater capital gains than the broader market. These qualities can be pretty tough to find in just one investment. Yet the WisdomTree MidCap Dividend ETF (NYSE: DON), an exchange-traded fund with net assets of $1.6 billion, offers both strong dividends and the potential for robust capital gains. Since its launch in June 2006, this ETF is up about 113% versus the S&P 500’s roughly 65% gain. The fund’s annualized dividend of $1.98 a share translates to a solid yield… Read More

Investors on the prowl for top-quality holdings typically seek two things: a history of robust dividends and the potential for substantially greater capital gains than the broader market. These qualities can be pretty tough to find in just one investment. Yet the WisdomTree MidCap Dividend ETF (NYSE: DON), an exchange-traded fund with net assets of $1.6 billion, offers both strong dividends and the potential for robust capital gains. Since its launch in June 2006, this ETF is up about 113% versus the S&P 500’s roughly 65% gain. The fund’s annualized dividend of $1.98 a share translates to a solid yield of 2.4%, compared with the S&P’s current yield of only 1.9%. DON’s track record stems from its bogey, the WisdomTree MidCap Dividend Index. This benchmark is made up of common stocks chosen from the top 75% of the WisdomTree Dividend Index (by market capitalization) after the removal of the 300 largest companies. To be included in the MidCap Dividend Index, a stock must meet certain requirements: Pay regular cash dividends during the 12 months before the index’s annual rebalance each December; have a market capitalization of at least $100 million as of the rebalance date; have an average daily… Read More

Stock splits are typically seen as bullish events, even though they don’t change the value of your investment. They simply increase the number of shares outstanding and reduce the price per share on a proportional basis. What’s important is the reason for a split. Companies usually do it when the stock price has risen so high that management thinks a price cut is necessary to keep shares looking attractive for investors, many of whom equate lower-priced shares with better values. Investors tend to see a stock split as a sign of financial strength, since splits are often announced at the… Read More

Stock splits are typically seen as bullish events, even though they don’t change the value of your investment. They simply increase the number of shares outstanding and reduce the price per share on a proportional basis. What’s important is the reason for a split. Companies usually do it when the stock price has risen so high that management thinks a price cut is necessary to keep shares looking attractive for investors, many of whom equate lower-priced shares with better values. Investors tend to see a stock split as a sign of financial strength, since splits are often announced at the same time as dividend hikes. Plus, studies have found a strong positive correlation between stock splits and future earnings growth. Clearly, splits have positive implications for portfolio performance, and a good real-world example of this comes from a unique exchange-traded fund called the USCF Stock Split ETF (NYSE: TOFR). The fund, which provides an easy way to gain regular exposure to stock splitters, has risen roughly 10% in value since last September, while the S&P 500 has risen around 7%.  The fund is still only about eight months old, and only has about $5 million in net assets thus… Read More

#-ad_banner-#The rapid surge in the dollar has thus far had little impact on the stock market. But it soon will.  In the upcoming earnings season, you’ll be hearing a lot about how many companies in the S&P 500 are having a tough time racking up sales in their foreign subsidiaries. And when you consider that few expect the dollar to pull back any time soon, this trend is likely to persist for at least the rest of 2015.  As we’ve noted in the past, larger companies tend to have much greater global exposure than smaller companies. And in the face… Read More

#-ad_banner-#The rapid surge in the dollar has thus far had little impact on the stock market. But it soon will.  In the upcoming earnings season, you’ll be hearing a lot about how many companies in the S&P 500 are having a tough time racking up sales in their foreign subsidiaries. And when you consider that few expect the dollar to pull back any time soon, this trend is likely to persist for at least the rest of 2015.  As we’ve noted in the past, larger companies tend to have much greater global exposure than smaller companies. And in the face of rising global sales challenges, you would think large cap stocks would be losing favor. Yet the S&P 500 has actually outperformed the Russell 2000 (a small-cap index) over the past 13 months. The simple explanation: global uncertainty tends to lead to a “flight to quality” as larger companies are generally seen as safer investments. Yet as Q1 earnings season will likely show, these aren’t “quality” times for big companies.  That’s why I am focusing my research these days on small-cap stocks. A number of individual stocks in the Russell 2000 are now trading far from their 52-week high,… Read More