ETF Filings Portfolio

A thought occurred to me the other day as I was looking at the filings page on the IndexUniverse weekly ETF Watch. It might be interesting to create a portfolio from some of the funds that are in registration. To be clear these funds do no exist (yet) and many of the filings are so old that it is quite clear to me that, assuming they are still active filings, some of the funds will never list but I’d very probably be a buyer of the WisdomTree Chilean Peso ETF if it ever listed. For purposes of this post I won’t speculate on the likelihood that any filing will become a fund. The approach will be to build at the sector level as best as I can which could be difficult for some funds where index composition is not available somewhere unless it is otherwise obvious by the name of the fund. FinancialsiShares MSCI New Zealand Investable Market Index FundiShares MSCI Egypt Investable Market Index Fund TechFirst Trust Nasdaq CEA Smartphone Index FundsShares FTSE Environmental Technologies Index ETF IndustrialSPDR Transportation ETFSPDR Aerospace & Defense ETF HealthcareRevenueShares S&P 500 Health Care Sector FundEG Shares DJ Emerging Markets Titans Healthcare ETF EnergyIQ Global Crude Oil Small Cap Equity ETFIQ Global Natural Gas Small Cap Equity ETF ConsumerClaymore China Consumer ETFiShares MSCI New Zealand Investable Market Index Fund MaterialsGlobalX Fishing ETFMarket Vectors Minor Metals ETF TelecomEG Shares DJ Emerging Markets Titans Telecom Fund UtilitiesGlobalX Brazil Utilities For the financial ETFs I was not able to find the constituents of the particular New Zealand ETF but the benchmark NZ 50 Index is very...

ETF Filings Portfolio

A thought occurred to me the other day as I was looking at the filings page on the IndexUniverse weekly ETF Watch. It might be interesting to create a portfolio from some of the funds that are in registration. To be clear these funds do no exist (yet) and many of the filings are so old that it is quite clear to me that, assuming they are still active filings, some of the funds will never list but I’d very probably be a buyer of the WisdomTree Chilean Peso ETF if it ever listed. For purposes of this post I won’t speculate on the likelihood that any filing will become a fund. The approach will be to build at the sector level as best as I can which could be difficult for some funds where index composition is not available somewhere unless it is otherwise obvious by the name of the fund. FinancialsiShares MSCI New Zealand Investable Market Index FundiShares MSCI Egypt Investable Market Index Fund TechFirst Trust Nasdaq CEA Smartphone Index FundsShares FTSE Environmental Technologies Index ETF IndustrialSPDR Transportation ETFSPDR Aerospace & Defense ETF HealthcareRevenueShares S&P 500 Health Care Sector FundEG Shares DJ Emerging Markets Titans Healthcare ETF EnergyIQ Global Crude Oil Small Cap Equity ETFIQ Global Natural Gas Small Cap Equity ETF ConsumerClaymore China Consumer ETFiShares MSCI New Zealand Investable Market Index Fund MaterialsGlobalX Fishing ETFMarket Vectors Minor Metals ETF TelecomEG Shares DJ Emerging Markets Titans Telecom Fund UtilitiesGlobalX Brazil Utilities For the financial ETFs I was not able to find the constituents of the particular New Zealand ETF but the benchmark NZ 50 Index is very...

Dark Side Of The Equities Moon

Albert Edwards was quoted (or maybe paraphrased is a better word) this weekend by both Alan Abelson and Prieur du Plessis with some dire price targets for the S&P 500. Neither post provided links but there were two different numbers; Abelson said Edwards was targeting SPX 250 or almost 80% below current levels and Prieur cited a target of 450 for the S&P 500. The general idea here is that true “revulsion” doesn’t does not happen until PE ratios compress into the single digits as they did in the early 1980s. Edwards writes “as the equity bloodbath of the last decade enters its final, even bloodier phase…” so we have that to look forward to. The argument relies on reversion to the mean which is backward looking. If this secular bear is to have a “third act” there is no reason it has to take the S&P 500 down to 450 just as there is no reason it has to stop at 450. Another point is that wherever a decline might bottom (450, 850, 150) it will probably not spend much time there. During the worst of the recent (current?) bear market the S&P 500 spent 23 days below 800 from February 17 to March 20. There was also one close in November below 800 and I bet you don’t remember that one but the S&P 500 dropped 6.6% on November 20, 2008 to close at 752 and bounced back the next day to close at exactly 800. There are many other instances of bear market lows being very quick despite the panic they engender. The point here is...

Dark Side Of The Equities Moon

Albert Edwards was quoted (or maybe paraphrased is a better word) this weekend by both Alan Abelson and Prieur du Plessis with some dire price targets for the S&P 500. Neither post provided links but there were two different numbers; Abelson said Edwards was targeting SPX 250 or almost 80% below current levels and Prieur cited a target of 450 for the S&P 500. The general idea here is that true “revulsion” doesn’t does not happen until PE ratios compress into the single digits as they did in the early 1980s. Edwards writes “as the equity bloodbath of the last decade enters its final, even bloodier phase…” so we have that to look forward to. The argument relies on reversion to the mean which is backward looking. If this secular bear is to have a “third act” there is no reason it has to take the S&P 500 down to 450 just as there is no reason it has to stop at 450. Another point is that wherever a decline might bottom (450, 850, 150) it will probably not spend much time there. During the worst of the recent (current?) bear market the S&P 500 spent 23 days below 800 from February 17 to March 20. There was also one close in November below 800 and I bet you don’t remember that one but the S&P 500 dropped 6.6% on November 20, 2008 to close at 752 and bounced back the next day to close at exactly 800. There are many other instances of bear market lows being very quick despite the panic they engender. The point here is...

Sunday Morning Coffee

I wanted to carry the dividends idea forward a little bit. There are some enormous dividends out there to be had. What I thought I would do is construct a portfolio where for each sector there is one very high yielding stock and one ETF. For compliance reasons I need to shy away from specific percentages allocated to each holding as the rules around this stuff assume that people add 2+2, get 22 and go out an implement the portfolio. FinancialsWestpack Banking (WBK) yields 5.80%iShares S&P Global Financials (IXG) yields 2.16%HealthcareMerck (MRK) yields 4.40%Pfizer (PFE) yields 4.50%EnergyYPF Sociedad Anonima (YPF) yields 7.10%Energy Sector SPDR (XLE) yields 1.87%IndustrialsNordic American Tanker (NAT) yields 8.90%Industrial Sector SPDR (XLI) yields 1.91%StaplesKimberly Clark (KMB) yields 4.10%Staples Sector SPDR (XLP) yields 2.74%DiscretionaryVF Corp (VFC) yields 3.20%Time Warner (TWX) yields 2.80%TechIntel (INTC) yields 3.40%Taiwan Semi (TSM) yields 3.90%Utilities National Grid (NGG) yields 6.70%Utilities Sector SPDR (XLU) yields 4.14%MaterialsLafarge (LFRGY) yields 5.74%BASF (BASFY) yields 4.28%Telecom AT&T (T) yields 6.30%NZ Telecom (NZT) yields 9.80% For a couple of the sectors I used two stocks instead of one stock and one ETF. A couple of the yields are very high, it would make me very nervous if every stock I owned yielded more than 7%. The way I did the math the mix yields 4.2% but you can play around with the numbers and weight this out however makes sense to you or better yet look at names in the context that are of interest to you. In general terms the payout ratios are very reasonable other than maybe NZT and WBK. The debt levels for these companies is...