Tag: SPDR S&P 500 ETF (SPY)

Coronavirus - ETFs You Should Avoid

Posted on by Matt Thalman

With the deadly Coronavirus outbreak continuing to spread and countless US companies let alone Chinese firms suspend business in China, even though the true extent of that effect is yet to be known, it’s clear there is going to be some economic effect from this disease.

Like it or not, we all live in a world that is becoming increasingly more interconnected and interdependent. This is the same reason a disease like Coronavirus is so quick to spread around the world and why the impact on stocks is not going to be limited to those firms based solely in China.

This makes it even more difficult for investors to truly determine what is safe and what isn’t in the stock market right now. However, we do have some low hanging fruit in terms of what you should not own at this time.

The first Exchange Traded Funds you should be avoiding right now are going to be the pure-play Chinese equity ETFs. The iShares MSCI China ETF (MCHI) or the SPDR S&P China ETF (GXC) should be on your sell list or high on the list of what not to buy. These funds invest in Chinese equities and don’t favor one sector more than others. The longer the ‘quarantine’ periods last in the different provinces in China, the more these ETFs are going to be hurt, end of story. However, these could be two outstanding options if you are looking to buy back into the Chinese markets once the Coronavirus scare dies off.

Furthermore, ETFs such as the Continue reading "Coronavirus - ETFs You Should Avoid" →

Top 25 ETFs To Have Owned Over The Last Decade

Posted on by Matt Thalman

The table below is a list of the 25-top performing ETFs over the last ten years. As you will see, the majority of the Exchange Traded Funds on this list produced returns of 15% or more on an annualized basis, with the top ETF returning more than 19% a year on average over the past decade. That would equate to roughly a 250% return before any dividends or fees.

ETFs
Continue reading "Top 25 ETFs To Have Owned Over The Last Decade" →

Dividend Stocks Yielding More Than Bonds

Posted on by Matt Thalman

A weird thing happens when investors start seeing signs of a recession or just start convincing themselves that a recession is inevitable and coming soon; interest rates begin to fall, which means bond yields begin to drop. Most investors are told when they start investing that stocks are risky, but they offer better long-term growth, while bonds are safer, but they don’t offer investors as much potential growth.

While these statements may be true during certain situations, they certainly don’t always hold true. Sometimes, stocks may be both less risky and offer higher growth than bonds. I personally believe now be may one of those times.

As things sit now, bonds are offering rather low yields. The three-month treasury is paying 1.78%, the 12-month treasury is paying 1.75%, while the even longer five-year treasury is only offering a yield of 1.56%. The ten-year treasury is at 1.68%, and the 30-year treasury is sitting at 2.13%. These returns are hardly likely to keep up with inflation over those longer periods. Buying an investment that may just keep up with inflation seems somewhat risky to me.

Even the bond ETFs that have performed well year-to-date and pay yields to their investors aren’t currently offering anything much better than what investors can get from Treasuries. The Vanguard Long-Term Corporate Bond ETF (VCLT) which is up 21% year-to-date is offering one of the best yields at 3.5%. But this ETF is rather risky considering if, and when interest rates turn around, this fund will get hit.

On the other hand, certain stocks are currently offering higher yields, while also offering the chance for stock price appreciation, regardless of which way interest rates run. Let’s take a look at a few of my person favorites equity Exchange Traded Funds, which offer both growth and healthy, reliable yields. Continue reading "Dividend Stocks Yielding More Than Bonds" →

Emerging Market ETFs Could Offer Great Opportunities

Posted on by Matt Thalman

Recent studies of emerging markets show their investment opportunities may be greater than most investors realize. One study believes that by 2020 the aggregate GDP of emerging markets will overtake that of developed economies around the world. Another one has the number of global consumers hitting 1.8 billion by 2025, with the majority of them living in emerging markets. Lastly, it is believed consumer spending in emerging markets will grow three times faster than that of developed markets in the coming years.

All three of these stats indicate there could soon be a huge growth opportunity in developing markets around the world. But there are a lot of emerging market ETFs that are down more than 9% year-to-date while the SPDR S&P 500 ETF (SPY) is up more than 10% and hitting new all-time highs. With that being said, many experts are beginning to grow weary of U.S. equities as we have now set a new record regarding the length of our current bull-market and valuations appear to be stretched.

When we take all of this into consideration, moving money to emerging market funds now may turn out to be a good long-term asset allocation play. So, let's take a look at a few funds which look appealing due to their rough 2018.

The first two are the Vanguard FTSE Emerging Markets ETF (VWO) and its direct competitor the Schwab Emerging Markets Equity ETF (SCHE). Both of these funds are large, liquid and have low fee’s; 0.14% and 0.13% respectively. They also both don’t consider South Korea an emerging market but hold positions based in Hong Kong, Taiwan, India, China, South Africa, Brazil, Russia, and Mexico to name the top 8 countries based on holdings. Both have an index weighting based on market cap and have a weighted market cap of around $80 billion, meaning you’re getting great foreign large-cap exposure. Continue reading "Emerging Market ETFs Could Offer Great Opportunities" →

4 Companies You Can Own That Operate Your Favorite ETFs

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


SPDR S&P 500 ETF (SPY), Schwab U.S Broad Market ETF (SCHB), State Street Corporation (STT), Invesco (IVZ), Wisdom Tree (WETF), BlackRock (BLK), ETF investing, ETF's, benefits of etfs,

But first, maybe you are wondering what an ETF operator does and how do they make money?

Plan and simply an ETF operator sponsors and runs an exchange traded fund. ETF's are either managed or unmanaged. Managed would mean someone is actually deciding which investments to hold in the ETF in order to gain the highest return. Unmanaged ETF's are ones that simply track a corresponding index; such is the case with the SPDR S&P 500 ETF (SPY) which tracks S&P 500.

An ETF operator makes its money by charging a fee to manage the ETF. These fees are usually displayed as a percentage. These fees or the annual expense ratio, as it is often called, can range in amounts from as little as 0.04% which is the case with the Schwab U.S Broad Market ETF (SCHB), up to more than 3% with some of the exotic funds. Managed funds always carry a higher expense ratio as they require daily monitoring by the managers. Whereas with unmanaged funds a manager only has to make changes when the index the fund tracks changes, which is not usually very often. Think of it this way, managed means constant attention baby-sitting while unmanaged means no to little baby-sitting and the more baby-sitting, the higher the price.

So now that we know how they operate and were the revenue comes from let's take a look at a few ETF operators. Continue reading "4 Companies You Can Own That Operate Your Favorite ETFs" →