New ETFs On The Block: Powershares Variable Rate Preferred Portfolio ETF (VRP)

Ulli Income ETFs Contact

90272538PowerShares, the exchange-traded fund unit of Invesco and the fourth-largest sponsor of ETFs in the US, launched the PowerShares Variable Rate Preferred Portfolio ETF (VRP) on May 1. The fund is US’s first variable rate preferred stock ETF product.

Preferred stocks have been the toast of institutional investors due to their potential for price appreciation and impressive dividend yields. Yet the slow and inevitable rise in yields has exposed these securities’ key investment risk: like other fixed income securities that pay a preset coupon over long horizons, they can slide in value and offset income gains they produce.

A study by Merrill Lynch showed in the eight months, since Ben Bernanke announced the end of Federal Reserve stimulus, traditional preferred stocks shed 10 percent of their value. To counter this problem, a fairly new type of preferred stocks was introduced by corporations, known as variable rate preferreds or VRPs. The same study showed VRPs lost 5 percent, or half the rate of traditional preferreds, in the final eight months of 2013. You should note that most of the returns from fixed-income securities usually come from the coupons.

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05-02-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For May 2, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05012014/

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Market Commentary

Friday, May 2, 2014

MARKETS UP OVERALL FOR THE WEEK ON STRONG JOBS DATA

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

While markets slid a bit today, all three major indexes posted gains for the week as the 5-day chart above shows. The key market driver today was the much anticipated jobs report, which revealed better-than-expected data; at least on the surface. The fact that the 2 surveys used, namely the household and establishment surveys, showed a huge divergence was conveniently overlooked.

Be that as it may, data showed U.S. job growth picked up at its fastest pace in more than two years in April, suggesting a sharp rebound in economic activity early in the second quarter. Factory orders — up a strong 1.1% for March — offered another dose of good economic news but not enough to power an earlier rally through the session’s closing bell.

Healthcare shares were among the biggest strains on the market today, including U.S. drug maker Pfizer Inc (PFE) whose shares fell 1.3% after its sweetened bid for AstraZeneca Plc (AZN) was rejected.

In Asia, Japan’s Nikkei index ticked down 0.2% to 14,457.51 and share prices fell in Singapore and Indonesia, while they rose in Malaysia, Thailand and the Philippines. The international realm is acting very unpredictable at present, especially with tensions heating up between Russia and the Ukraine.

Our 10 ETFs in the Spotlight recovered during this rebound week; none of them made new highs today but 9 of them are on the plus side YTD.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

In other words, none of them ever triggered their 7.5% sell stop level during this time period, which included a variety of severe market pullbacks but no move into outright bear market territory.

Here are the 10 candidates:

MaxDD

All of them are in “buy” mode, meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

Year to date, here’s how the above candidates have fared so far:

YTD

To be clear, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point is taken out in the “Off High” column.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) bounced back and remain above their respective long-term trend lines by the following percentages:

Domestic TTI: +2.42% (last Friday +1.86%)

International TTI: +3.61% (last Friday +2.74%)

Have a great weekend.

Ulli…

Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.

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READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

A note from reader Don:

Q: Ulli: When I subtract the dividend for an ETF from the high close for sell stop purposes, the sell stop is sometimes considerably less than it would be if I deducted the 7.5% from the high close. Am I right to use the high close less the dividends to compute the sell stop?

A: Don: Yes, when the price of an ETF is reduced by the amount of the dividend paid, you need to adjust the former high price by the same amount. Otherwise, your sell stop discipline is out of whack.

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WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

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Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/

ETF/No Load Fund Tracker Newsletter For May 2, 2014

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2014/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05012014/

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Market Commentary

Friday, May 2, 2014

MARKETS UP OVERALL FOR THE WEEK ON STRONG JOBS DATA

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

While markets slid a bit today, all three major indexes posted gains for the week as the 5-day chart above shows. The key market driver today was the much anticipated jobs report, which revealed better-than-expected data; at least on the surface. The fact that the 2 surveys used, namely the household and establishment surveys, showed a huge divergence was conveniently overlooked.

Be that as it may, data showed U.S. job growth picked up at its fastest pace in more than two years in April, suggesting a sharp rebound in economic activity early in the second quarter. Factory orders — up a strong 1.1% for March — offered another dose of good economic news but not enough to power an earlier rally through the session’s closing bell.

Healthcare shares were among the biggest strains on the market today, including U.S. drug maker Pfizer Inc (PFE) whose shares fell 1.3% after its sweetened bid for AstraZeneca Plc (AZN) was rejected.

In Asia, Japan’s Nikkei index ticked down 0.2% to 14,457.51 and share prices fell in Singapore and Indonesia, while they rose in Malaysia, Thailand and the Philippines. The international realm is acting very unpredictable at present, especially with tensions heating up between Russia and the Ukraine.

Our 10 ETFs in the Spotlight recovered during this rebound week; none of them made new highs today but 9 of them are on the plus side YTD.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 05/01/2014

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, May 1, 2014

Table of Content082312

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 10/25/2011

TTI0501

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our TTI (green line in above chart) is positioned above its long term trend line (red) by +2.49%.

To avoid a potential whip-saw, a Sell signal to move out of all domestic equity positions will be generated once we have clearly pierced the red line to the downside. Be sure to tune in for the latest updates.

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Markets Mixed As Investors Await Jobs Report On Friday

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The S&P 500 ended nearly flat on Thursday as investors anxiously await Friday’s jobs report, though some gains in Internet shares helped lift the Nasdaq to positive territory late in the day. The anticipated (April) jobs report, which is expected to show that U.S. employment rose at its fastest pace in five months could give investors confidence that economic momentum will continue on through the next quarter.

Perhaps more convincing that the U.S. economy is trucking along is the fact that U.S. consumer spending recorded its largest gain in more than 4-1/2 years in March and factory activity accelerated last month. Remember that consumer spending accounts for more than two-thirds of U.S. economic activity. When adjusted for inflation, it increased 0.7% in March after advancing 0.4% in February.

Shares of DirecTV Inc (DTV) experienced a surprising pop today of 4.1% after the Wall Street Journal reported that AT&T Inc (T) had approached the company about a possible acquisition. Other gainers on the day included TripAdvisor Inc (TRIP) which added 3.4%, while Amazon.com (AMZN) rose 1.2%.

Overseas, many of the major markets were closed for May Day holidays. However, Japan’s Nikkei 225 Index jumped by 1.3% on the day, while the U.K.’s FTSE 100 Index rose by 0.4%.

Our 10 ETFs in the Spotlight went sideways; no new highs were made today but 9 of them are remaining in the green YTD.

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Dow Closes At Record Level For The First Time This Year

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Volatility was still the name of the game on this last day of April just as it has been for quite some time. All the major indexes gained while the S&P 500 managed to eke out a modest +0.64% for the month.

As expected, the Fed announced a reduction of $10 billion in its monthly bond buying program from $55 billion to $45 billion. Key interest rates remained unchanged despite weak GDP growth in the first quarter, which almost came to a standstill. Of course, there always hopeful optimists who believe that the Fed’s tapering means the economy is improving and should soon be able to carry its own weight. Personally, I have not seen enough data to support that view.

Although private sector hiring improved in April with employers adding the most jobs in some 5 months. The Chicago PMI also rebounded last month at the fastest pace in six months.

Our 10 ETFs in the Spotlight headed modestly higher with 3 of them making new highs today while 9 of them are now in the green YTD.

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