Greetings!
Below please find the ETF Spotlight newsletter containing highlights of the research and data on www.etfresearchcenter.com as well as a recap of the past week's action in the ETF market.
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In this week's issue
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 Dogs of ETF Land
- Chart of the week: Worst performers of 2010
- Fund Focus: iShares S&P Global Clean Energy (ICLN)
- Revisions, asset flows & short interest
- 2011 EPS estimates, change, and P/E multiples for major ETFs
- Market monitor - movers & categories
To download the full newsletter click here.
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| Chart of the week |
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Dogs of ETF Land
A familiar strategy called "Dogs of the Dow" involves purchasing the 10 stocks in the Dow Jones Industrials Index with the highest dividend yields (often resulting from under-performance) and holding them for the following year, in the belief that "reversion to the mean" would require above-average performance for these shares.We conducted a similar exercise with our universe of nearly 600 equity ETFs by screening for the ten worst performers of 2010 in hopes of identifying some buying opportunities. In a fairly good year for stocks in general, the worst performing fund was only down 36%. But unlike with the Dow index where any 10 stocks would constitute a reasonably diversified portfolio, 7 out of 10 of the worst performing ETFs were clean energy-related (the remaining funds were "PIIGS"-related). Obviously, buying a bunch of these "Dogs" would result in undesirable levels of concentration.However, our ALTAR Score™ rating suggests fairly wide disparity in the investment merit of these Clean Energy funds. The highest rated of the diversified clean energy portfolios, the iShares S&P Global Clean Energy fund (ICLN) may be worth a look. It is the subject of this week's Fund Focus. Download the full newsletter here.
Chart: Dogs of ETF Land
Worst performers of 2010 (among equity ETFs)
Source: Bloomberg
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| Fund Focus |
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iShares S&P Global Clean Energy (ICLN)
Whatever your position on clean energy in general, some of these stocks are so beaten up that they now look attractive again. ICLN, down nearly 70% since inception in 2008, has only about 1/4 of assets in US stocks, and many of them have business lines outside of pure clean energy projects that earn real (though volatile) profits. And with oil starting the year above $90 these technologies could get a second look on an economic basis.
To download the full newsletter, click here.
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