New ETFs On The Block: Wisdomtree Bloomberg US Dollar Bullish Fund (USDU)

Ulli US Dollar Contact

146026450WisdomTree, the NY-based fifth largest exchange-traded fund sponsor and asset manager with 61 different products that span asset classes and countries, is back with its latest launch – the WisdomTree Bloomberg US Dollar Bullish Fund (USDU). The fund aims to benefit by providing exposure to the US dollar’s appreciation against a broad basket of 10 developed and emerging market currencies.

USDU tracks the Bloomberg Dollar Total Return Index and follows an active management strategy to measure the greenback’s performance against a diversified basket of currencies with the most liquidity and largest US trade flows. It invests in Treasury bills and other investment-grade money market securities, including short-term corporate-debt papers while taking positions in short-term currency forwards.

The underlying index follows a rules-based process and is rebalanced annually to reflect the dynamic nature of today’s global currency markets. Currently, the fund has the highest exposure in the euro (31.23 percent), followed by the Japanese yen (19.24 percent) and the Canadian dollar (11.52 percent). The remaining seven currencies in the index get exposure in single digits. Also, exposure to the Chinese yuan is capped at 3 percent while currencies that are pegged to the US dollar – such as the Hong Kong dollar and the Saudi riyal, are removed from the probable’s list.

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01-03-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, January 3, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01022014/

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Market Commentary

Friday, January 3, 2014

A CHOPPY WEEK ON WALL STREET

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Overall, volumes on Wall Street were thin this week, with many traders still on vacation. Also, a major storm in the Northeast hampered travel and states of emergency were declared in New York and New Jersey.

U.S. stocks ended a choppy trading session mostly lower on Friday after Federal Reserve Chairman Ben Bernanke defended the extraordinary measures undertaken by the central bank to boost the economic recovery. The S&P 500 (SPX) slipped less than a point leaving it down 0.6% for the week. The Dow Jones Industrial Average (DJIA) closed up 0.2% but finished the week marginally lower and the tech-heavy Nasdaq Composite (COMP) shed 0.3% on Friday and lost 0.8% for the week.

In the ETF world, WisdomTree, an exchange-traded fund sponsor and asset manager, has announced the launch of the WisdomTree Bloomberg US Dollar Bullish ETF (USDU). The fund, which is linked to the Bloomberg Dollar Total Return Index, seeks to provide exposure to the US dollar against a broad basket of developed and emerging market currencies based on global trade flows and liquidity measures. The nascent actively managed ETF space is just beginning to expand, and you should expect more options as money managers try to edge into mutual fund territory with a cheaper investment wrapper.

As we continue on into 2014, you will most likely see more actively managed ETFs that cover target income, commodities, emerging markets, managed futures, hedged products and other alternatives.

Our 10 ETFs in the Spotlight came off their highs to varying degrees but all remain on the bullish side of their respective trend lines.

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).

Now let’s look at the MaxDD% column and review the ETF with the lowest drawdown as an example. As you can see, that would be XLY with the lowest MaxDD% number of -5.73%, which occurred on 11/15/2012.

The recent sell off in the month of June did not affect XLY at all as its “worst” MaxDD% of -5.73% still stands since the November 2012 sell off.

A quick glance at the last column showing the date of occurrences confirms that five of these ETFs had their worst drawdown in November 2012, while the other five were affected by the June 2013 swoon, however, none of them dipped below their -7.5% sell stop.

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

YTD

3. Domestic Trend Tracking Indexes (TTIs)

Looking at the big picture, our Trend Tracking Indexes (TTIs) slipped from last week’s high but remain above their long term trend lines by the following percentages:

Domestic TTI: +4.09% (last Friday +4.58%)

International TTI: +6.20% (last Friday +7.05%)

Have a great week.

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: I have been using a 7% sell stop which you have recommended, or used, in the past.  Lately I have noticed you talk about a 7.5% sell stop.  Have you changed your sell stop to 7.5%?

A: Don: The 7% level has been my alert point, but I always have executed once the 7.5% level was crossed.

To avoid confusion, I have used the 7.5% level in my back tests as described in the e-book. Please realize that this is not an exact science and some investors sell even before the 7% level is reached while others use 8%. It all depends on their risk tolerance. The main idea is to have some kind of an exit strategy to avoid participating in the major market downturns.

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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 Friday, January 3, 2014

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2014/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01022014/

————————————————————

Market Commentary

Friday, January 3, 2014

A CHOPPY WEEK ON WALL STREET

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Overall, volumes on Wall Street were thin this week, with many traders still on vacation. Also, a major storm in the Northeast hampered travel and states of emergency were declared in New York and New Jersey.

U.S. stocks ended a choppy trading session mostly lower on Friday after Federal Reserve Chairman Ben Bernanke defended the extraordinary measures undertaken by the central bank to boost the economic recovery. The S&P 500 (SPX) slipped less than a point leaving it down 0.6% for the week. The Dow Jones Industrial Average (DJIA) closed up 0.2% but finished the week marginally lower and the tech-heavy Nasdaq Composite (COMP) shed 0.3% on Friday and lost 0.8% for the week.

In the ETF world, WisdomTree, an exchange-traded fund sponsor and asset manager, has announced the launch of the WisdomTree Bloomberg US Dollar Bullish ETF (USDU). The fund, which is linked to the Bloomberg Dollar Total Return Index, seeks to provide exposure to the US dollar against a broad basket of developed and emerging market currencies based on global trade flows and liquidity measures. The nascent actively managed ETF space is just beginning to expand, and you should expect more options as money managers try to edge into mutual fund territory with a cheaper investment wrapper.

As we continue on into 2014, you will most likely see more actively managed ETFs that cover target income, commodities, emerging markets, managed futures, hedged products and other alternatives.

Our 10 ETFs in the Spotlight came off their highs to varying degrees but all remain on the bullish side of their respective trend lines.

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 01/02/2014

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, January 2, 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

TTI010214

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 Trend Tracking Index (TTI—green line in above chart) has bounced off its long term trend line (red) by +4.34% after briefly dipping below it late in June 2013.

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 line to the downside. Be sure to tune in for the latest updates.

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First Day Of Trading Seems Sour, Economy Looks Sweeter

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

U.S. stock indexes posted their largest decline in three weeks on the first trading day of 2014, after the benchmark S&P 500 finished its best year since 1997. Oil and gas producers were among the hardest hit following a 3% drop in oil prices to under $96 a barrel as Libya prepares to reopen a major oilfield. The dollar rallied though against a basket of major currencies (DXY) as U.S. jobs, housing and manufacturing data gave support to the Federal Reserve’s decision to start slowing its stimulus program this month. This was the dollar’s largest daily gain in five months against a basket of currencies.

Across the pond, the euro fell 0.7 percent against the dollar to $1.3654, touching a two-week low of $1.3628. It might be hard to believe, but Europe’s common currency was the strongest-performing major currency in 2013. Historically though, the euro has tended to weaken at the start of a calendar year.

Perhaps the most positive news as we begin 2014 is that U.S. factory activity remained at a 2-1/2-year high in December and the number of Americans filing new claims for jobless benefits fell again last week, suggesting the world’s largest economy is on stable footing.

Checking in on gold- and precious-metals and mining funds during a gold-bullish kickoff to the New Year, SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) are gaining 1.8% and 3.2%, respectively. Market Vectors Gold Miners ETF (GDX) is ahead by 3.6%.

With the major indexes pulling back today, our 10 ETFs in the Spotlight followed suit as they all came off their recent highs to varying degrees. Take a look at the YTD table below.

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Closing The Year On A High Note

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The S&P 500 along with the Dow Industrials kept its upward momentum intact during this last trading day by closing out this year at new record levels. As it stands, the Fed’s decision earlier this month to start tapering was taken as a positive, which helped the indexes to keep the rally going.

Of course, the Fed’s action was speculated on and anticipated throughout this year, so by the time the trigger was actually pulled, it no longer was a surprise, and the markets handled it in stride despite a momentary sell off.

The strength of equities was surprising given the fact that bonds hit the skids earlier this year, slipped into bear market territory and never recovered in any meaningful way. Lots of speculation abounds about what the markets will do next year. My suggestion is that you pay no attention to these exercises in futility and focus on the the long-term trend. Combine the direction of the trend with my recommended sell stop discipline, and you can eliminate much of the guesswork as to what might or might not happen.

With the continuation of the current upside momentum in equities, nine of our ten ETFs in the Spotlight made new highs today. Take a look at the YTD table below.

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