Crop-Focused ETFs

Ulli Crop-focused ETFs Contact

It’s no secret that energy and food prices have been the fastest rising component of the monthly CPI report. As a result, investors have poured money into crop-focused ETFs at an alarming rate, as the WSJ (subscription required) reports in “Playing With Your Food:”

Corn costs more than twice what it did last June. Wheat futures have shot up by three-quarters. Soybeans have soared by nearly half.

For lots of investors, those are mouth-watering numbers—and they’re snapping up exchange-traded products that specialize in agriculture. But moving into this market can mean risks and complications.

The returns of crop-focused funds can vary significantly from the prices in news headlines, due to the quirks of futures investing. And some funds hold shares in agriculture and food companies, which can be hurt as well as helped by rising commodity prices.

Of course, there’s an even more basic worry—that commodity prices will fall instead of rise. Cotton shot up over 50% from early January to early March, and then dropped nearly 15% within two weeks.

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ETFs On The Cutline—Updated through 4/21/2011

Ulli ETFs on the Cutline Contact

This week, you’ll notice again that ETFs do not remain in the same position in relation to the cutline for very long when market weakness or strength sets in. With the last few trading days having been bullish, some ETFs improved their positions.

Moving above the cutline to a +3 position from -1 last week, was PFF, which now also sports positive momentum numbers across the board, along with a low DrawDown percentage. Losing some momentum was PBW, which dropped from +5 to +2.

The lesson is that you need to have ETFs move above the cutline by a decent margin before considering them as a buy. Additionally, you want to make sure that all momentum numbers across are positive before taking a position.

Take a look at this week’s table:

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A New Waste Management ETF (WSTE)

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A new Waste Management ETF has been launched according to “Global X Funds Launches Waste Management ETF (WSTE):”

Global X Funds, the New York based provider of exchange traded funds (ETFs), today launched the Global X Waste Management ETF (Ticker: WSTE). WSTE is approximately evenly divided among the disposal of hazardous waste, non-hazardous waste and recycling sectors.

The world’s population growth and burgeoning middle class is creating a steady rise in demand for energy and consumer products, with an ever-increasing need for sanitation and waste-disposal services. The proper disposal of hazardous and non-hazardous waste is a critical and growing aspect of many industries, especially as corporations are held more accountable for the waste they produce. Investors in WSTE may stand to benefit from mandatory safety standards and environmental regulations imposed on these companies, which enforce the removal of pesticides, petrochemicals, nuclear, and industrial waste.  In addition, the process of recycling is critical for managing available resources and controlling the costs of basic materials.  If the world’s appetite for raw materials continues to grow, recycling may stand to become increasingly cost effective and a more viable substitute for primary production.

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A Pimco Total Return ETF

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It had to happen eventually. Pimco’s widely accepted and top performing Total Return Fund will be soon available as an ETF, according to the WSJs (subscription required) “ETFs to Get a Pimco Star:”

Pacific Investment Management Co. plans to launch an actively managed version of its popular Pimco Total Return Fund overseen by founder Bill Gross, a move that may well turn the tide for actively managed ETFs.

In a Securities and Exchange Commission filing, the California bond fund giant applied to launch Pimco Total Return ETF, which will invest 65% of its assets in a diversified portfolio of bonds, primarily investment-grade debt of varying maturities.

The launch of an active ETF version of the $236 billion Pimco Total Return fund, the world’s largest fund, shows that most active strategies can be turned into ETFs and will likely be followed by more entrants among big-name active managers.

“It’s a game changer,” said Scott Burns, director of ETF analysis at Morningstar Inc. “This is the validation that this corner of the ETF industry has been waiting for. A large, prominent fund manager with a strategy that is the largest out there—anyone who says it can’t be done and won’t be done—those excuses are completely blown up right now.”

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ETF/No Load Fund Tracker updated through 4/21/2011

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2011/04/weekly-statsheet-for-the-etfno-load-fund-tracker%E2%80%94updated-through-4212011/

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Market Commentary

Friday, April 22, 2011

ETFS BUNGEE-JUMP BACK

So far, Monday’s sharp sell-off, caused by Standard & Poor’s outlook change on U.S. Government debt to negative, turned out to be a one-day event.

The major market ETFs bounced off Monday’s bottom and rallied to close the Holiday shortened week higher, with the S&P 500 gaining 1.3%. The S&P’s 50-day moving average offered support, and we ended up closing 1.32% above it.

Worries about inflation, and the global economy in general, including U.S. Government debt, helped the metals push to historical highs with gold conquering the $1,500 level, while silver jumped above $46.

The stock market shifted into overdrive on Wednesday supported primarily by blowout earnings by Apple, whose revenue now exceeds that of IBM. Technology in general provided the fuel for the strong market advance.

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Weekly StatSheet For The ETF/No Load Fund Tracker—Updated Through 4/21/2011

Ulli ETF Tracker Contact

ETF/Mutual Fund Data updated through Thursday, April 21, 2011

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY— since 6/3/2009

As announced via a blog post, on 6/2/2009, the TTI triggered a buy signal with an effective date of 6/3/2009. We will use the 7% trailing stop loss of our positions as an exit point or the crossing of the trend line to the downside, whichever occurs first.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken above its long term trend line (red) by +4.79%.

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