One Man’s Opinion: Are Emerging Markets Along With Europe Likely To Outperform Global Equities In The Future?

Ulli Market Review Contact

92835431Emerging markets and Europe is the place to be for investors. They should play this call through broad-based index ETFs in emerging markets, said Hank Smith, chief investment officer at Haverford Trust.

Emerging markets are the most underperforming area in what has been a bull run in equities globally and they will surely catch up, Hank observed. Asked if he thought Treasuries were overvalued as the majority (57 percent) of market participants surveyed believes Fed tapering has been already priced in and a yield of 3 percent would make 10-year Treasuries attractive, Hank chose to disagree.

Bonds are still an overvalued asset class and the markets are nowhere close to what one could consider a normalized environment. A 10-year yield of 1.7 percent is an emergency level, but a 10-year today at 3 percent is on the way to normal environment and not normal. Over the next 18-24 months, a 10-year yield that settles in at 4/4.5 percent is correct. Today’s buyer will be sadly disappointed in terms of a decline in the value of what they buy today, he noted.

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New ETFs On The Block: Global X Next Emerging & Frontier ETF (EMFM)

Ulli Emerging Markets ETFs Contact

101768508Global X, the NY-based issuer of exchange-traded products famous for its niche offerings in international, income and commodity funds, is set to extend its reach in the developing markets with a pure-play equity strategy that combines both frontier and emerging markets. After the recent broad pullback in the emerging markets, ETF sponsors are obviously having a relook at their developing-market strategies.

According to SEC filing, the proposed Global X Next Emerging & Frontier ETF (EMFM) will track the Solactive Next Emerging & Frontier Index and will invest at least 80 percent of total assets in the securities of the underlying index and in GDRs and ADRs based on the securities in the underlying index.

The fund will open up custodian accounts in the “next” emerging markets, which are defined as the economies beyond the so-called BRIC and other developed Asian economies such as South Korea and Taiwan, and will directly buy securities from those markets.

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09-13-2013

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, September 13, 2013

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09122013/

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Market Commentary

Friday, September 13, 2013

MAJOR INDEX ETFs END THE WEEK HIGHER ON NEGATIVE DATA

Domestic equity markets ended in positive territory and the Dow registered its best weekly gain since January, despite lackluster reads on U.S. consumer sentiment and retail sales, while investors contemplate the odds that the Federal Reserve will taper stimulus measures at next week’s policy meeting.

Moreover, Syrian uncertainty remained, with diplomatic discussions continuing regarding the Syrian government relinquishing control of its chemical weapons. The Dow Jones Industrial Average closed 75 points higher (0.5%) at 15,376, the S&P 500 Index ended up 5 points (0.3%) at 1,688, and the Nasdaq Composite increased 6 points (0.2%) to 3,722.

Today’s session was very quiet as participants displayed tepid demand for equities ahead of next week’s meeting where a tapering announcement may occur. Excluding a brief dip during the opening hour after it was reported that the Consumer Sentiment Index fell 5.3 points in the preliminary September reading, the biggest drop this year, to 76.8, the lowest level in five months. Economists expected a smaller pullback.

Typically, consumer sentiment follows trends in employment, equity prices, oil prices, and media reports. Since the end of August, the Syria debate has caused oil prices to increase; and the most recent August employment gains were much weaker than expected. Equity prices, however, have been moving higher.

Despite the temporary slide into negative territory, the key indices were able to reclaim and hold their early highs into the close. Cyclical sectors ended mixed. Energy (+0.1%), financials (+0.2%), and industrials (+0.2%) lagged; discretionary shares (+0.3%) ended in-line; and materials (+0.7%) outperformed. Similar to cyclical sectors, defensive groups were mixed. Telecom services (+0.2%) lagged while consumer staples (+0.8%) and utilities (+0.8%), outperformed. For its part, the health care sector (+0.3%) ended in-line with the S&P.

The equity markets finished solidly higher on the week, despite next week’s highly-anticipated monetary policy meeting by the Federal Reserve, as some stronger-than-expected global data boosted economic optimism. The Dow was a standout performer, posting three sessions of triple-digit gains.

The S&P 500 rose 2 percent for the week, its best gain in about two months, yet its trading range has narrowed sharply this week and that trend is expected to continue until the Fed announcement. The Nasdaq posted a 1.7 percent gain for the week.

Our Trend Tracking Indexes (TTIs) joined the party and closed higher:

Domestic TTI: +2.29% (last week +1.28%)

International TTI: +6.15% (last week +4.31%)

Have a great week.

Ulli…

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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 Scott:

Q: Ulli: What is the sell stop rule on an ETF Bond fund?  Is it the same as on a Mutual Bond Fund?

A: Scott: Yes; it’s the same for either. I use 5%, and we’ve been out of bonds months ago when the stop was triggered.

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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, September 13, 2013

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/2013/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09122013/

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Market Commentary

Friday, September 13, 2013

MAJOR INDEX ETFs END THE WEEK HIGHER ON NEGATIVE DATA

Domestic equity markets ended in positive territory and the Dow registered its best weekly gain since January, despite lackluster reads on U.S. consumer sentiment and retail sales, while investors contemplate the odds that the Federal Reserve will taper stimulus measures at next week’s policy meeting.

Moreover, Syrian uncertainty remained, with diplomatic discussions continuing regarding the Syrian government relinquishing control of its chemical weapons. The Dow Jones Industrial Average closed 75 points higher (0.5%) at 15,376, the S&P 500 Index ended up 5 points (0.3%) at 1,688, and the Nasdaq Composite increased 6 points (0.2%) to 3,722.

Today’s session was very quiet as participants displayed tepid demand for equities ahead of next week’s meeting where a tapering announcement may occur. Excluding a brief dip during the opening hour after it was reported that the Consumer Sentiment Index fell 5.3 points in the preliminary September reading, the biggest drop this year, to 76.8, the lowest level in five months. Economists expected a smaller pullback.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 09/12/2013

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, September 12, 2013

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

TTI

The Domestic 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 +2.27% 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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Green Streak Comes To An End

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

The U.S. Federal Reserve was back in the spotlight again as traders worried that the Fed would begin to scale back its monetary stimulus when it meets on Tuesday and Wednesday next week. U.S. equity averages fell, halting a seven-day win streak for the Standard & Poor’s 500 Index as materials producers slid amid growing concern over Syria.

Economic data showed first-time weekly claims for state unemployment benefits, the last major reading on the labor market before the Fed’s meeting, fell to the lowest level since 2006, but the picture was incomplete because two states did not process all their claims.

Nine of ten S&P 500 industry sectors ended in the red. After posting gains in each of the past seven sessions, several of this month’s top performers fell victim to some profit-taking. Financials, industrials, and materials led to the downside with losses ranging between 0.5% and 1.0%. The financial sector was pressured by the underperformance of most large banks as investors attempted to gauge the impact of a slowdown in the mortgage industry.

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