7 ETF Model Portfolios You Can Use – Updated through 9/10/2013

Ulli Model ETF Portfolios Contact

As the chances of an engagement in Syria became less threatening, the markets did a turnaround, after having slid towards a possible bearish break of the domestic trend line. That did not happen, and the major indexes picked up steam with the S&P 500 gaining +2.68% since last week’s model ETF portfolio report.

Despite the ongoing volatility, low volatility ETFs, such as XLP and SPLV, in which we have positions, were surprisingly lagging, as they have for the past month. Bond ETFs, of course, as I mentioned before, have been the losers for this year and any portfolios containing them have been left behind.

While the recent bounce back was a welcome development after the August selloff, it remains to be seen if this trend can hold or if it turns into a dead cat bounce. It pays to be prepared for either scenario as historical market disasters seem to occur most often during September and October.

Here’s the latest ETF Model Portfolio update:

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Bulls Win For 6th Straight Day

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

Amid more upbeat global economic news and concerns over a U.S.-led strike on Syria continuing to wane, U.S. equities closed with solid gains as the S&P 500 advanced for the sixth straight session. Chinese economic data showed stronger-than-anticipated reads on industrial production, retail sales and lending activity, while Syrian Foreign Minister announced that the country has agreed to Russia’s proposal to put its chemical weapons under international control.

On the equity front, Goldman Sachs, Visa and Nike jumped more than 2.1 percent as the three companies will be added to the Dow Jones Industrial Average, replacing Bank of America, Hewlett-Packard and Alcoa.

Stocks registered the bulk of their gains during the opening hour after China’s industrial output rose 10.4 percent in August from a year earlier and the nation’s retail sales gained 13.4 percent. Both results exceeded economists’ estimates. Equities also climbed yesterday as China’s exports topped forecasts. Meanwhile, new developments about Syria reduced risk for financial markets.

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China Helps Nasdaq To End At Highest Since 2000

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

Global economic optimism, courtesy of a stronger-than-expected read on Chinese August exports and a sharp upward revision to Japan’s 2Q GDP growth, helped to propel stocks to start the week. U.S. markets closed sharply higher on Monday, with the Nasdaq ending at its highest level since September 2000.

Sentiment was also lifted by merger activity and easing concerns about a potential Western-led strike on Syria. Meanwhile, consumer credit was the only item on today’s economic calendar, showing that consumer credit expanded at a smaller-than-expected pace.

U.S. equities climbed from the open thanks to China reported overnight a larger-than-expected trade surplus as imports grew 7.0% (11.3% expected) and exports increased 7.2% (6.0% forecast). Elsewhere, Japan saw its second quarter GDP revised up to 0.9% quarter-over-quarter from 0.6% and Tokyo received the nod to host the 2020 Olympics.

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ETFs/Mutual Funds On The Cutline – Updated Through 9/6/2013

Ulli ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 398 ETFs, of which currently 297 (last week 272) are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher.

These ETFs are generated from my selected list of some 93 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. 59 ETFs (last week 50) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 769 (last week 752) above the line and 90 below it out of the 859 that I follow.

Take a look:

1. ETF Master Cutline Report

2. ETF High Volume Cutline Report

3. MF Cutline Report

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

If you missed the original post about the Cutline approach, you can read it here.

One Man’s Opinion: Should The Government Wind Down Freddie Mac And Fannie Mae?

Ulli Market Review Contact

92835431Fannie May and Freddie Mac are still supported by the tax payer, but progress is being made as Congress is debating on how to get the government out of the mortgage business. However, Fannie and Freddie are now making money and putting in billions of dollars in the coffers that the government used to bail them out in the first place.

If Fannie and Freddie hadn’t been there in the last five years or so, the prices of housing stocks would have been much lower today, thinks James Lockhart, vice chairman of WL Ross & Co. At some point in time though the government needs to get out of the housing market, and it’s not going to be easy since both Fannie and Freddie’s share is well over half of the 10-trillion dollar industry, Jim noted.

Asked how long Fannie and Freddie would require government support, Jim said there’s some legislation going on and personally he would like to send a legislation proposing winding down of the institutions in the next five years or so and replacing them with a much smaller and purely government insurance program for some mortgage-backed securities. That government-backed program can actually act as a countercyclical force, he observed.

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New ETFs On The Block: Egshares Emerging Markets Dividend Growth ETF (EMHD)

Ulli Dividend ETFs, Emerging Markets ETFs Contact

139868600Emerging Global Advisors, the emerging market-focused sponsor of EGShares exchange-traded products, launched an income-centric product last month that focuses purely on yield.

The new fund, EGShares Emerging Markets Dividend Growth ETF (EMHD), tracks the FTSE Equal Weighted Emerging All Cap ex-Taiwan Diversified Dividend Yield 50 Index, a benchmark co-developed by EGA and FTSE that provides exposure in developing world companies.

The index screens the FTSE Emerging All Cap ex-Taiwan Universe and equal weights 50 stocks that have consistently generated high-income for their shareholders after screening for liquidity. While equal weighting ensures each index component is allocated 2 percent on rebalancing dates annually, the index excludes the least-capitalized dividend-paying companies.

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