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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 Inflation protection
- Chart of the week: Net margins of commodity producers
- Fund Focus: Market Vectors Hard Asset Producers (HAP)
- Revisions, asset flows & short interest
- 2011 DPS estimates, growth rates, and yield 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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Inflation protection
Though still debated on Wall Street, recent weeks have produced more evidence that inflation is becoming a bigger problem around the world. So far it seems that price increases have been concentrated in commodities and hard assets.
Recent evidence from Q4 results of S&P500 firms suggests that this may be putting the squeeze on margins (while still up versus Q4 2009, margins declined sequentially in a number of sectors). One way to offset this other than owning the commodities themselves is to buy stocks of commodity producers. This week's chart shows the 2010-12E net margins for 11 ETFs of commodity producers. In every case they are forecast to rise substantially this year and increase again next year. We examine one of the broadest such funds, the Market Vectors Hard Asset Producers (HAP) in this week's Fund Focus section. Download the full newsletter here.
Chart: Inflation protection
Net margins of commodity producers, 2010-12E
Source: AltaVista Research |
| Fund Focus |
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Market Vectors Hard Asset Producers (HAP)
This global equity fund (about 60% non-US) has about 40% each in Energy and Materials, making it one of the most broadly diversified baskets of resources producers and a play on commodity-price inflation. Margins should expand again this year as sales rise double-digits, resulting in a 25% jump in EPS. However recent gains in share prices have pushed the P/BV ratio of stocks in HAP to almost 2x, reducing future appreciation potential. Active investors may be able to assemble similar exposure at moderately better valuations with the iShares S&P Global Energy (IXC) and Materials (MXI) funds.
To download the full newsletter, click here.
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| New coverage | |
We have added coverage of nine new ETFs. Go to the ETF Research Center for details on any of them.
| Ticker | Fund Name | | XTL | SPDR S&P Telecom | | XTN | SPDR S&P Transportation | | XHE | SPDR S&P Health Care Equipment | | FONE | First Trust Cea Smartphone | | VXUS | Vanguard Total International Stock | | AND | Global X FTSE Andean 40 ETF | | EMVX | Global X Emerging Market Value | | EMGX | Global X Emergin Market Growth | | ASEA | Global X Asean 40 |
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