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. |
In this week's issue
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- Chart of the week: No Bargains for Retail Investors
- Fund Focus: iShares MSCI Hong Kong (EWH)... page 2
- Revisions, assets flows & short interest...page 3
- 2012 Book value per share estimates, annual change, and P/BV Multiples of major ETFs...page 4
- Market monitor: big movers & market segments...page 5
Download ETF Spotlight here. |
Chart of the week
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No Bargains for Retail Investors
With Black Friday around the corner now is the time of year investors typically turn their attention to retailers, hoping that strong holiday sales will bring some cheer to their portfolios. But while shoppers will be out in force bargain hunting, there seems to be few bargains for investors.
While we're no fans of the Consumer Discretionary sector (XLY) in general, shares in the SPDR S&P Retail ETF (XRT), an industry within the Discretionary sector, appear especially rich. Since 2006 XRT's relative P/E multiple has gone from a discount of nearly 50% to a premium of about 8% today.
Unfortunately, firms in XRT don't generate superior profits to justify such a premium, and as a result XRT has a low ALTAR Score--our measure of an ETF's overall investment merit--of just 4.5%, compared with a still unimpressive 4.9% for the larger Discretionary Sector.
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Figure: Relative P/E multiple, XRT vs. XLY
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Fund in Focus
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 iShares MSCI Hong Kong (EWH)
Despite the interconnectedness of Hong Kong's economy with that of China, EWH is a much different index than the iShares FTSE/Xinhua China 25 fund (FXI), as well as the better-known Hang Seng Index. In any case, firms in Financials-heavy EWH are having a rough time this year, with both revenue and sales declining by double digits. Overall this fund appears to offer average appreciation potential.
Download ETF Spotlight here.
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