Major Market ETFs Sink On Weak Economic Outlook

Ulli Market Commentary Contact

There was no green number to be found in today’s market pullback, as the chart from MarketWatch clearly shows.

It was a day during which recovery worries clearly surfaced as it appeared that the economy may not be as strong as had been previously assumed. While these inconvenient thoughts have surfaced from time to time, bullish sentiment has always won in the recent past.

Whether this is the start to more downside activity is simply too early to tell. The sell off was broad and covered equities, crude oil, gold, commodities and emerging markets. Bonds bucked the trend as interest rates headed lower.

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Mutual Funds On The Cutline—Helping You To Better Manage your 401k

Ulli Mutual Funds On The Cutline Contact

With over 99% of all investors being committed to the use mutual funds in their 401k retirement plans, my weekly StatSheet was the first step in providing you with tools to make better investment decisions.

Last week, I introduced “ETFs On The Cutline,” and I have now expanded this idea for use in the mutual fund arena as well. This is the first post in a regular series to provide you with the same relevant data, which you can use with any of your retirement plans.

While there are thousands more mutual funds than ETFs existing in the investment universe, how can you use this data if your respective fund choices are not listed?

First, let’s take a look at the latest cut line table for mutual funds:

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A New Corporate Bond ETF (CBND)

Ulli Bond ETFs Contact

With interest rates hovering around the zero line, ETF providers are scrambling to bring additional products on the market to satisfy the income needs of the investing public, as reported by Barron’s:

Funky niche ETFs might be annoying to some. But State Street’s (STT) Global Advisors group today brought to market a fund which could actually clean out much of the clutter in a rather expansive ETF marketplace.

Enter the SPDR Barclays Capital Issuer Scored Corporate Bond ETF (CBND). Instead of picking and ranking its components by who’s the biggest (which, in this environment can be akin to who’s in the worst shape), CBND selects its issues based on fundamentals. Those include metrics such as  return on assets, interest coverage and measures related to a company’s ability to fund  short-term obligations.

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ETFs On The Cutline—Updated through 4/8/2011

Ulli ETFs on the Cutline Contact

In this second edition, you’ll notice that ETFs do not remain in the same position in relation to the cutline for very long. This week’s exception would be DFJ, which continues to hang around the +1 placement.

Then there are fast paced ETFs like TUR, which was in a +3 position last week and catapulted off this table by having moved +4.55% above its long term trend line.

Others, like RWX, moved down from +20 to +13.

Take a look at this week’s table:

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Sunday Musings: Update On New Blog Improvements

Ulli ETF Tracker Contact

Last Monday’s premier post titled “ETFs On The Cutline” was a successful one based on positive reader feedback along with a high count of blog visitors.

As I announced a couple of weeks ago, further improvements, to provide you with more relevant ETF/mutual fund data, were in the pipeline, are now finalized and will be published next week. If you are on the mailing list, a notice will be emailed to you.

Here’s what’s coming your way:

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On ETFs, CEFs, MLPs And Trend Tracking—One Reader’s Experience

Ulli Reader feedback, Trend Tracking Contact

You just never know what all you can do with the concept of trend tracking until someone else tells you about it. That was the case with reader KD, who more or less customized trend tracking to match his risk tolerance and investing preferences.

Here’s what he had to say:

I thought I would share some of my results since we first communicated. In March 2009 I had a net worth of about $3.9 M of which $0.5 M was house, leaving $3.4 M investable. In March 2011, I have $4.9 M investable.

With your help, I avoided the 2008 fiasco and then jumped in with both feet in the 2-3 qtr 2009. I like to balance my portfolio with income producing instruments, but don’t care for typical bonds. In the 4 qtr 2009 I bought about $1.3 M CEF munis, paying 5-7% tax free,  and sold them in November 2010 for a substantial capital gain and then invested about $1.5 M in oil & gas pipeline MLP’s, which pay 5.5% to 7.5% and are now worth about $1.7 M. I use cefconnect.com to help select the CEF’s and tickerspy.com to help me select the MLP’s.

The balance of my portfolio is in ETF’s.  My account is with Etrade and I use only limit orders. Cost is $10 per execution. Note I follow your trend tracking index and will go to 100% cash if the market turns against me.

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