New ETFs On The Block: Principal EDGE Active Income ETF (YLD)

Ulli Income ETFs Contact

91551519Principal Financial Group, the financial behemoth with $500 billion in assets under management and better known for its range of 401(k) retirement plans, insurance products and mutual funds, recently forayed into the exchange traded funds segment.

The newly launched Principal EDGE Active Income ETF (YLD) is sub-advised by Principal’s EDGE Asset Management unit and seeks to provide current income by investing in six income producing asset classes. Generally speaking, multi-asset ETFs provide exposure to a wide range of asset classes and provide much needed diversification to income investment products.

While YLD is an actively managed fund, it seeks to beat the performance of the Barclays US Corporate High Yield 2% Issuer Capped Bond Index by using tactical asset allocation methods. In a sense, the fund is a pretty much “go-anywhere” product as the portfolio manager can invest across asset classes and geographic boundaries in search of income.

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ETF/No Load Fund Tracker Newsletter For August 21, 2015

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ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2015/08/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-08202015/

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Market Commentary

THE BEAR MARKET HAS ARRIVED: DOMESTIC AND INTERNATIONAL TTIs IN “SELL” MODE

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks have been in a world of pain this week as selloffs continued. The Dow lost 531 points today, dropping to 16,459 and the “C” word (correction) started being floated around Wall Street. As far as my indicators are concerned, we have entered bear market territory, and to me the question is how far down will we go?

Concerns about global economic growth, especially in the world’s second largest economy (China), have been an increasing weight on the stock market. China’s cooling economy has caused the Shanghai index to tumble drastically this week despite a massive government intervention. Throw in uncertainty about when the Federal Reserve is going to raise interest rates for the first time in more than a decade, and investors are losing their confidence in holding onto stocks.

Oil remained under pressure Friday as U.S. crude fell as low as $39.86 a barrel—a level last seen in February 2009 in the depths of the financial crisis. Brent crude, the international benchmark, tumbled 60 cents to $46.02 in London after losing 54 cents the previous day to close at $46.62.

Here in the U.S., economic data released this week was neutral as we saw a mix of surprises to the upside and downside. Housing starts were better than expected, which supports many analysts’ views that the housing market will continue to improve. The Consumer Price Index, which measures inflation, failed to move significantly higher. This lack of price movement could cause more market participants to think that the Fed may wait even longer to raise interest rates.

It will be interesting to see how markets may or may not rebound come Monday.

All of our 10 ETFs in the Spotlight headed south with the indexes with Consumer Discretionaries (XLY) faring the worst by losing -3.13%. Holding up best was the Dividend ETF (DVY), which surrendered “only” -2.07%.

For the effect on our Trend Tracking Indexes (TTIs), please read section 3 below:

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 08/20/2015

Ulli ETF StatSheet, Uncategorized Contact

ETF/Mutual Fund Data updated through Thursday, August 20, 2015

TOC 082115

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 10/22/2014

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a “Sell” for this arena effective 10/14/2014, which was followed by a violent break back above the line on 10/22/14 generating a new “Buy.” It was a classic whipsaw signal, and you can read more on my blog as to the events as they were unfolding.

As of today, our TTI (green line in above chart) just has just broken below its long term trend line (red) by -0.67%. As I posted, I want to see a clear piercing below the trend line before issuing a “Sell” signal.

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Equities Get Spanked In Worldwide Rout—Trend Tracking Indexes (TTIs) Slip Into Bear Market Territory

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

It was a sea of red numbers crashing on world equities as Wall Street notched a third straight day of losses with the Dow plunging 358 points.  When the markets closed today, the Dow sat below 17,000 for the first time since Oct. 29 last year.

Fear is still percolating throughout the marketplace due to the losses and negative feel about markets globally. The closely watched Wall Street “fear gauge,” dubbed the VIX, is up nearly 20% today to 18.19, its highest level since July 9, but still well below its 52-week peak of 31.06 back on Oct. 15.

Crude did not perform well today either. A barrel of U.S. based crude flirted with falling below the $40 per barrel mark today for the first time since early 2009, which marks a fresh 6-1/2 year low. Crude is being pressured by data showing a bigger weekly inventory build in the U.S., continued oversupply and concerns about slowing growth in China.

None of our 10 ETFs in the Spotlight were able to overcome the worldwide bearishness, so all closed in the red. Leading to the downside was Healthcare (XLV) with -2.32% with Consumer Staples (XLP) showing the most resistance with a modest loss of -0.91%.

Our Trend Tracking Indexes (TTIs) broke their trend lines to the downside confirming the “Sell” signal for the International one. The Domestic one is in alert mode. Please see section 3 below for details.

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Fed Fed Fed Was All The News Today

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The ticking sounds of the countdown clock to the Fed’s interest rate hike are getting louder it seems. The stock market closed lower today after minutes from the Fed’s last policy meeting showed the central bank was “approaching” its first rate hike in nearly a decade. Rates near 0% and cheap borrowing costs have helped the real estate sector and greater economy heal over the past decade.

However, much of the policy speculation has depended on improvement in the labor markets and inflation moving back to its 2% mandate. The labor market has improved, but inflation remains tame. Consumer price level in July, for example, grew only 0.01%, which was below its forecast. Then there are stumbling oil prices and the devaluation of the Renminbi…

Oil prices have continued to slide, which is deflationary for the USD and China devaluing its currency sent yellow flags up about the state of the world’s second largest economy.

Let’s keep one eye on the domestic housing market indexes as we move towards the end of the week, as well as what the reactions will be on the Fed and China policy over the next couple of trading days. If it any more slippage occurs, we may very well enter bear market territory and exit our equity positions. Please see section 3 below for the current status.

All of our 10 ETFs in the Spotlight headed south today as bearish forces were too strong to overcome. Still, Consumer Discretionaries (XLY) held up the best by surrendering only -0.18%, while the Mid-Cap Value (IWS) fared the worst by giving back -0.93%.

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Markets Still Moving Sideways; Housing Continues To Perform

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities closed lower today after a big earnings miss from Walmart (WMT) and continued concerns over China’s capital markets. All three major indexes here in the U.S. lost and gave back some of Monday’s gains.

Investors were cautious in their trading all day after Walmart reported adjusted quarterly earnings of $1.08, which was four cents short of analyst estimates. The company reduced its outlook for the remainder of the year and shares dropped about 3.4% on the day, which was the biggest loser for the Dow.

Weighing heavily on investors’ minds today was the 6.2% drop in China’s Shanghai Composite index. The index has been extremely volatile as of late, dropping more than 8.5% in a single day just a few weeks ago. The government injected USD $19 billion into the markets to prop up stocks, but investors are weary that this type of intervention may be less supportive of the equity markets moving forward.

The bright spot here at home were home builder stocks. As the real estate rebound continues, investors have remained bullish on housing-related stocks and those have continued to perform. Also, Home Depot (HD) gained 3% after reporting a 5.7% increase in same-store sales.

8 of our 10 ETFs in the Spotlight joined the bears and headed south led by Consumer Staples (XLP) with -0.50%, while Consumer Discretionaries (XLY) bucked the trend and gained +0.09%.

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