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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 What Tech Bubble?
- Chart of the week: Relative P/E ratio of Tech SPDR (XLK) vs. S&P500 (SPY)
- Fund Focus: Technology Sector SPDR (XLK)
- Revisions, asset flows & short interest
- 2011 Book value per share estimates, annual change, and P/BV 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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What Tech Bubble?
A few hot social media IPOs have some market commentators thinking it's 1999 all over again. But in fact valuations for the Tech sector as a whole have rarely been cheaper. As the figure below illustrates, the P/E premium that the Technology SPDR (XLK) used to enjoy over the S&P500 (SPY) has all but vanished, down from more than 30% in 2006 (and far less than the 100%+ premiums seen during the Tech bubble circa 1999).
Even the discount seen during the financial crisis is somewhat misleading, since earnings of the S&P500 collapsed sending its P/E skyrocketing even as the market declined. Now with earnings back to "normal" levels, comparisons are more meaningful.
Download the full newsletter here.
Chart: Relative P/E multiple, Technology SPDR (XLK) vs. S&P500 SPDR (SPY)
Source: AltaVista Research |
| Fund Focus |
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Technology Sector SPDR (XLK)
Fundamentals in the Tech sector are robust with sales, earnings and profitability measures all in record territory, although as comparisons get tougher growth rates are forecast to decelerate in 2011-12E. Valuation-wise, XLK trades at a premium to the S&P500 on some multiples such as P/BV. But that appears deserved, owing to the sector's relatively high and stable levels of profitability, resulting in an ALTAR Score of about average. Meanwhile XLK's usual P/E premium has all but vanished.
To download the full newsletter, click here.
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| New coverage | |
We recently added coverage of the following ETFs, bringing the total to 669 funds. Check ETF Research Center for details on any of them.
| Ticker | Fund Name | | HBTA | Russell 1000 High Beta | | LBTA | Russell 1000 Low Beta | | HVOL | Russell 1000 High Volatility | | LVOL | Russell 1000 Low Volatility | | HMTM | Russell 1000 High Momentum | | SHBT | Russell 2000 High Beta | | SLBT | Russell 2000 Low Beta | | SHVY | Russell 2000 High Volatility | | SLVY | Russell 2000 Low Volatility | | SHMO | Russell 2000 High Momentum | | SPHB | Powershares S&P 500 High Beta | | SPLV | Powershares S&P 500 Low Volatility | | PXLV | PowerShares Fundamental Pure Large Value | | PXLG | PowerShares Fundamental Pure Large Growth |
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