Showing posts with label ETF. Show all posts
Showing posts with label ETF. Show all posts

Wednesday, February 10, 2016

Stocks to Watch - 9 Feb 2016 - 5 stocks to defy the downturn

VTG - Vita Group (Retailing)
DRM - Doray Energy (Gold)
AGL - Australian Gas Light
IGB - iShares Treasury
IAF - iShares Composite Bond

The Share Market has had one of those down days today - worldwide. Just up until today, things seem to be settled a little, then the dramatic drop today. In such a market, the one advice is to stay out, unless one plan to short some stocks.

Surprising the five mentioned above has been doing quite well recently. And for investors who wish to park their money somewhere, then these five are worth investigating further.

AGL - a venerable gas company, whether you call it blue chip or not, it has been around for years. It has all the advantages of incumbency over new players who would face barriers of entry. It is not recognized as a growth stock usually - but take a look at its graph below - growth chasers wouldn't complain about AGL's recent performance while others are falling. Good for small growth and to ride out the storm.

Doray Energy - Gold miners have been doing well in the past 6 months due to the worldwide market downturn. This small gold miner is interesting in various respects. Not only is it trending up nicely, it does have positive earnings and a low PE. Definitely warrant deeper investigation. Aimed at the Speculator.

VTG - This group has been doing well recently. Though the last few days, it has been retracing, the general performance has been good over the past year. May be a good choice for moderate growth and to hold during periods of uncertainty.

IGB and IAF - both of these are ETFs in Bonds. For those who really want to play it safe, yet may still want a positive outcome during market downturn, these are two ETFs worth looking at. As the general rule goes, if the stock market is going down, people tend to switch asset classes and bonds is one class to consider.



Chart forAGL Energy Ltd (AGL.AX)

Chart forDoray Minerals Ltd (DRM.AX)

Chart forVita Group Ltd (VTG.AX)

Chart foriShares Treasury (IGB.AX)


Chart foriShares Composite Bond (IAF.AX)









Sunday, April 14, 2013

Notes - Masonson's ETF Buy - Don't Hold

These are some summarised notes on the fantastic book on how to trade ETFs by Masonson "Buy - Don't Hold"
It presents a technical strategy based on momentum using relative strength.





Chap 2
- investment questionnarire may determine the risk profile but then most managers use it to allocate asset based on conservative, balanced, aggresive, into asset classes with fixed percentage. It does not account for which asset classes may perform better or worse at
that time.
- better questionnaire at www.finametrica.com  and www.riskprofiling.com 
- risk management in stocks include knowing when to sellout. Some like to hold on whle the stock keeps crashing. The question when you want to keep holding is would you buy that same stock today?
- types of risks - market risk, individual stock risk, diversification risk, inflation risk.
-  Mechanical non emotiona trading has the highest probability of making money
- Buy and hold investing is very risky and can lead to huge losses
P52 use average true range ATR, when go above 0.75, then major bear
may be coming, so exit all holdings, there should still be some time.

Chap 3 - Personal Investment Plan - 6 steps Road to Success
- SIX step investment plan
i determine your risk level
Ii review existing investment portfolio, use sites from Web, WallStreet Journal, Barron's http://online.barrons.com/home-page
Iii assess the stock market condition - use Stock Market Dashboard in Chap 5 to determine market condition, buy when above +3 and sell when below -3
Iv Invest in ETFs instead of stocks - 5 classes of ETFs are;
Morningstar style box, S&P Indices, Individual countries, Fixed Income, Commodities.
v. find top ETFs of specific class using Relative Strength Analysis.
Web: ETF FamilyWeb sites, www.morningstar.com
vi. Protect using stop loss
- a section on retirement investing with details for US residents, but the principles can be applied elsewhere.

Chap 4 - Using ETFs
- contrary to their own thinking, investors are not more intelligent than their peers.
-  most investors lose money, including managed funds
- over 75% of active managers do not beat their benchmarks over a 10 year period. So not point paying over 1% in management fees.
- index funds (ETF is a type of this) has a beta of 1.0 (a measure of volatility)
- ETFs are usually a basket of stocks that mirror the index. So most reflect the indices and they do not beat the indices. Hence the majority are passively managed and so has lower fees. It lets investors follow the indices since most actively managed fund perform
poorer than the indices over the long term.
- list of low cost brokers:
www.digeratilife.com/blog/index.php/2009/05/22/onlinediscount-brokers-smart-money-broker-survey 
- A table 4.1 has a list of the main ETF families (providers?) and they types of ETFs they offer.
- there are many types of ETFs such as those that mirror the main indices like S&P500, commodities, various sector ETFs, currencies, bonds and also inverse ETFs that make money when the market falls (ProShares, Direxion, Rydex).
- benefits of ETFs are: transparency, liquidity, low fees, better performance, simpler tax implications, allow shorting by buying inverse ETFs without actual margin based shorting, can implement trading/investment strategies, earn dividends/income.
- risks: different price in ETFs to their underlying (eg when market is suspended), general market risk, spread in buy/sell, inverse ETFs may be suspended in extreme market conditions.
- leveraged ETFs can magnify gains and losses. The author warns against leveraged ETFs because of higher risks and suggest their use as hedging or intraday trading.
- leveraged ETFs are rated using beta. If beta =1.25, then the ETF move 25% more than its underlying in the same direction.
- 4 types of asset allocation is given according to the profiles:
conservative, moderate, aggressive, very aggressive. Morningstar and SPDR ETFs are recommended for all profiles. Fixed income range from half to zero from conservative to very aggressive classes. IShares countries ETFs range from low to high percentage from conservative to very aggressive.
- a long list of various  ETFs and their ticker symbols are presented in Chap 4

Chap5 - the Stockmarket Dashboard - key market indicators to Gauge
Market Directions
- websites : www.stockcharts.com
- Dashboard consist of 8 indicators. Since each indicator is not always reliable, investment decisions are based on an aggregate of the 8 indicators.
- When the indicator is +3, start buying stocks up to indicator of +7.
When an indicator is - 3, sell ALL stocks.
- Returns on Stock is determined by 70% market trend, 20% industry trend and 10% individual stock fundamentals.
- 8 components of the StockMarket Dashboard
i) Percentge of NYSE stock above their 50d MA. If above 75% then move downwards then market top has been reached. Similarly for the 25% to indicate market  bottom.
ii) NASDAQ crosses 100 DMA. Crossing upward from below means trend has changed upwards and vice versa. The NASDAQ is chosen because it usually leads the other indices.
iii) New daily highs minus New daily lows on NYSE. When this  is -750 and the next day the number reverse to more than + 750 then a market bottom is reached. For market top, find number of new weekly highs divided by number shares traded. If this is 25% and goes lower in the next week, then it is time to sell.
iv) Percentage of NYSE stocks whose Point and Figure Charts has a buy signal. When this number is 70% and turns down it may be a market top.  If the number is 25% and turns up, it may be a market bottom.
v) American Association of Individual Investors (AAII)  survey of weekly bullish sentiment. When 50% is bullish and turn lower next week, then market top. If 25% and turn up, then market bottom.
vi) MACD on NASDAQ where the difference 26dayExpMA-12dayExpMA line crosses the 9dayExpMA, then market has changed direction.
vii) Invest 6months - be in the market from 1 Nov to 30April and out of the market for the other 6 months. Use MACD of S&P500 to fine-tune when to enter and exit markets.
viii) NASDAQ Summation Index (NASI) - When this crosses the 5day EMA
from below, it is a buy signal and vice versa. This is used together with MACD for confirmation.

Chap 6 RELATIVE STRENGTH ANALYSIS (RSA)
- RSA is based on picking the selected stocks which are outperforming their peers in terms of their stock price.
- calculate the % change in stock price over a given period then rank them with other stocks.
- The suggested time frame is 6 months
- Sell the stock if it falls below a certain ranking. And replace with other stocks that increased in ranking.
- RSA have been shown to outperform buy and hold strategies.
- perform analysis every week, based on 6 month price performance.
- sell off those that drop out of top ten and buy those that get into top 10.
- can be used with stocks, also ETFs if there are hundreds of them.
- before buying, check the ETF 2 year chart 50dma and MACD are in an uptrend.
- Strategy #1 - after ranking the ETFs according to their categories, the choose the top  few from each category.  The number of stocks from each category depends on the risk profile. For aggressive investors, choose more stocks from risky category, such as International ETFs.
- Strategy #2, rank all ETFs together ignoring their categories. Pick the top 10 ranking ETFs in this universal ranking.
- when coming out of market bottom, avoid top ranking ETFs which are bonds or inverse ETFs.
- www.robertwcolby.com  - list the top 10 rank ETFs
- www.etfscreen.com - provides relative strength analysis  on ETFs.
- www.morningstar.com - has ETFs info
- www.marketwatch.com - has more details on ETFs
- www.etftable.com  - ETFs stats and ranking
- www.etftrends.com - performance data but no RSA
- www.etfinvestmentoutlook.com  - also performance data but no RSA

CHAP 7 Subscription Software
High Growth Stock Investor software
- screening tools, filter, indicators, charts, groupings, Relative Strength based on price performance or other criteria.
VectorVest software
- powerful back testing, portfolio management, filters, searches.

CHAP 8 Putting it all together
1. Determine your investor profile: conservative, moderate, aggressive, very aggressive. www.kiplinger.com/reports/investor-psychology
2. Review current asset allocation, against your risk tolerance and investor profile determined from previous step. Rebalance portfolio if necessary, ie sell some stocks and replace with ETFs where possible.
3. Use the Stockmarket Dashboard to decide when to buy (+3 or above) and sell (-3 or below) shares. The Dashboard provides general market timing, it does not select which shares to buy or sell. When buying from+3, some strategies include buy everything at once or buy some, then buy a bit more when it increases to +4, +5, +6, +7. When selling, once the market falls down to -3, then sell the complete
portfolio.
4. Stock selection and therefore fundamental analysis of individual companies are not necessary, because this approach is to buy ETFs. The ETFs can also be categorised according to riskiness. Based on the investor risk profile, each profile can have a certain ETF allocation strategy. For example the Conservative allocation can consist of 53% Fixed Income ETFs (safe), 13% iShares Countries ETFs (risky), etc while the Very Aggressive allocation may have no Fixed Income ETFs, 40% iShares Countries ETFs and so on.
5. Selection of which ETFs to buy is based on the Relative Strength Method, using websites which rank them (see Chap6 for web links). Review your portfolio of ETFs at least weekly and if they ranking fall below 50%-tile within their group, then replace that ETF.
6. Always continue to use stop loss for protection. Do not change the plan once started or stray away from it. www.buydonthold.com  - more details on the book.

The Stockmarket Dashboard was used for backtesting with  two examples related to the GFC. The first case was for the market at Mar 2009, the recovery after the GFC, with a score of +7 - a strong buy signal. The second case looks back to Oct 2007, just before the GFC, with a score of -6 - a strong sell all signal.

Friday, February 22, 2013

Listed Investment Companies


What’s a Diversified Investment, but not an ETF or Managed Fund? – Listed Investment Companies.

Some which are listed on the ASX are:
Australian Foundation Investment Corporation,
Argo Investments,
Milton Corporation,
Djerriwarrh,
Australian United Investments
Carlton.

Wilson Asset Management,
Contango
Clime.

A few points about LIC are:
they perform better than managed funds and certainly better than ETFs.
They have experts there hunting out bargains and looking for growth opportunities.
They are generally run on a cheaper cost base.
Invest by buying shares in the company.
They are not forced to buy high and sell low, since they don’t have to hand back investments to customers like Managed Funds do.

Monday, November 9, 2009

ETFs: Buy Sell Indices and Metals on the ASX

Source: http://ozstock.blogspot.com

Update 2 Aug 2020
Technology ETFs:
ATEC - BetaShares S&P/ASX Australian Technology ETF
The index ATEC aims to track, the S&P/ASX All Technology Index.
The first ETF focused on providing access to Australia’s fast-growing technology sector and offers exposure to a diversified portfolio of dynamic ASX-listed tech players such as REA Group, Xero, Afterpay, WiseTech Global and carsales.com. 

ROBO - Invest in robotics, automation and artificial intelligence (RAAI) through the ETFS ROBO Global Robotics and Automation ETF. ROBO uses a full-replication strategy to track the index, meaning it holds all the shares that make up the index in proportion to their index weights. The index comprises up to 200 global companies related to robotics, automation, and artificial intelligence in areas such as manufacturing, 3D printing, logistics and security. 


Update 1 Aug 2015
ANZ Bank
ZGOL - Physical Gold
ZCNH - Physical Renminbi
ZUSD - Physical US Dollar

Exchange Traded Bonds / Fixed income
xtbs.com.au


Update 25 Nov 2012
ETF - UBS IQ Research Preferred Australian Share Fund. This ETF aims to replicate the performance of the UBS Research Preferred Index before fees and expenses. These are the shares that UBS has done research into, for their managed funds investments.


Update 16 Jul 2012
A few agriculture and metal commodities ETFs have been added to the ASX. A complete list of all ETFs can be seen at http://www.asx.com.au/products/managed-funds-product-list.htm
The agriculture commodities ETFs are:

ETPCMD - All Commodities (collateralised structured product)
ETPAGR - Agriculture (collateralised structured product)
ETPCRN - Corn (collateralised structured product)
ETPWHT - Wheat  (collateralised structured product)
ETPGRN - Grains  (collateralised structured product)

Metal Commodities ETFs:
ETPIND - Industrialised Metals (collateralised structured product)
ETPCOP  - Copper (collateralised structured product)

Energy Commodities ETFs
ETPNRG  - Energy (collateralised structured product)
ETPGAS - Natural Gas (collateralised structured product)
ETPOIL - Brent Crude  (collateralised structured product)





Update 11 Apr 2012
Some high dividend yielding shares are:
VHY - Vanguard Australian Shares High Yield
SYI - SPDR MSCI Australia Select High Dividend Yield
RDV - Russell High Dividend Australian Yield
IDF - iShares S&P / ASX High Dividend

Updated 22 Sep 2013
More high income ETFs
YMAX -BetaShares Australian Top20 Equity Yield Maximiser
IHD - iShares S&P/ASX High Dividend ETF
SYI - SPDR MSCI Australia Select High Dividend Yield
VHY - Vanguard Australian Shares High Yield ETF

6 Nov 2016
HSVT Betashares Australian Dividend Harvester
WDIV SSgA S&P Global Dividend



Update 24 Apr 2012
A very comprehensive list of ETFs available in Australia can now be found at the Australian Stock Exchange ASX at: http://www.asx.com.au/products/managed-funds-product-list.htm
Just click at the "ETFs and ETCs" item at the website above.


Update 17 Sep 2012
Fixed Interest or Bonds ETFs are now available in the Australian market. More will be added soon, but here the few that are recently made available:

IAF - iShares UBS Composite Bond - fee 0.24%. The Fund invests primarily in investment grade fixed income securities issued by the Australian Commonwealth Government, Australian State-Governments, Supranational and Sovereign agencies and corporate debt issues that form the Index, and seeks to achieve its objective by employing an optimisation (stratified sampling) strategy to track the performance of the Index.

IGB - iShares UBS Treasury - fee 0.26%. The Fund invests primarily in investment grade fixed income securities issued by the Australian Commonwealth Government that form the Index, and seeks to achieve its objective by employing a full replication strategy to track the performance of the Index.

ILB - iShares UBS Government Inflation - fee 0.26%. The Fund invests primarily in investment grade fixed income securities issued by the Australian Commonwealth Government and Australian State-Governments that form the Index, and seeks to achieve its objective by employing an optimisation (stratified sampling) strategy to track the performance of the Index.

AAA - Betashares Australian High Interest Cash

Russell has also launched three fixed-income ETFs (updated 8 July)
RGB - Russell Australian Government Bond ETF - fee 0.24%
RSM - Russell Australian Semi-Government Bond ETF - fee 0.26%
RCB - Russell Australian Select Corporate Bond ETF - fee 0.28%


BOND - SPDR S&P/ASX Australian Bond Fund. The Fund seeks to closely track, before fees and expenses, the returns of the S&P/ASX Australian Fixed Interest Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking and lower costs.

GOVT - SPDR S&P/ASX Australian Government Bond Fund. The Fund seeks to closely track, before fees and expenses, the returns of the S&P/ASX Government Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking and lower costs.

GGOV - BetaShares Global Government Bond 20+ Year ETF – Currency Hedged
GGOV’s strategy is to invest in a portfolio of long-maturity bonds issued by governments of the G7 nations (USA, Japan, Germany, United Kingdom, Italy, France and Canada). Exposure is hedged into AUD.   Update 2 Aug 2020

Update 1 Aug 2015
VAF - Vanguard Australian Fixed Interest
VGB - Vanguard Australian Government Bond Index Fund

IHCB - iShares Global Corporate Bond (Hedged)  6 Nov 2016






Update 7 Feb 2012

QAG - ETF Betashares Agriculture - Currency Hedged - Synthetic
The Fund seeks to track the performance of the S&P GSCI Agriculture Enhanced Select Index Excess Return ("Index") hedged into Australian dollars, plus an interest component, before fees and expenses.

QCB - ETF Betashares Commodities Basket - Currency Hedged - Synthetic
The Fund seeks to track the performance of the S&P GSCI Light Energy Index Excess Return ("Index") hedged into Australian dollars, plus an interest component, before fees and expenses.

QCP - ETF Betashares Copper Index - Currency Hedged - Synthetic
The Fund seeks to track the performance of the S&P GSCI North American Copper Index Excess Return ("Index") hedged into Australian dollars, plus an interest component, before fees and expenses.



Update 15 Jan  2012
USD - BetaShares US Dollar ETF - If US$ goes up against AU$, then buy this. If US$ goes down against AU$, then sell this.
EEU - Beta Shares Euro ETF
POU - Beta Shares British Pound ETF

These currency ETF were introduced on Feb 2011. They allow for trading currency with much smaller cost than just buying and selling currency from banks or currency exchanges. The USD is supposed to hold actual US dollars in a JP Morgan Chase deposit account according to Money Magazine Dec 2011 issue.

OOO - Beta Shares Crude Oil ETF - also available. It tracks the Crude Oil Index which follows the West Texas Intermediate Crude Oil futures. This ETF is hedged.



Update 8 May  2011
AVOID buying the following ETFs if you don't want to be highly leveraged or speculative (see explanation soon)
QFN - BetaShares S&P/ASX 200 Financial Sector ETF
QRE - BetaShares S&P/ASX 200 Resources Sector ETF
by BetaPro management. There may be more of these coming......


The ETFs above are called synthetic ETFs. They are a new kind of ETFs which are partly composed of derivatives. This is unlike original ETFs which track their index by trading actual shares that the index is made up of. The original ETF is copying the index so it lets investor trading the index itself - what you see is what you get - and there are little surprises. The synthetic ETFs attempt to create the same movement as the underlying index, but actually make up of more exotic instruments such as derivatives. The risk profile is therefore different for the synthetic ETFs and their index. It will be particularly serious if market movement is so severe, such that the derivatives effect is even more severe, causing the companies backing synthetic ETFs to fail. In such cases the synthetic ETFs may collapse. This is an extreme but not impossible scenario.



Update 12 Dec 2010
iShares has recently added four more ETFs for Australian investors. The four ETFs are:


IOZ  iShares MSCI Australia 200
Aims to track the performance of the MSCI Australia 200 Index investing in the 200 largest companies in Australia.

ILC  iShares S&P/ASX 20
Aims to track the performance of the S&P/ASX 20 Index investing in the twenty largest blue chip companies in Australia.

IHD  iShares S&P/ASX High Dividend
Provides exposure to 50 large Australian companies with a particular focus on higher dividends

ISO iShares S&P/ASX Small Ordinaries
Aims to track the S&P/ASX Small Ordinaries, an established index which represents small cap companies in Australia



Original Post
Over nearly the last 2 years, mum and dad investors as well as professional investors may heve been burned by the GFC - Global Financial Crisis. For most, it is bad enough that the shares in companies crashes, but for others trading derivatives like options, futures and CFDs (Contract For Difference) the exposure to individual companies may have been worse.

For some companies the share prices not only crashed but the companies themselves collapse and investors (non-creditors) usually get nothing. But even in the doom and gloom, some companies or sectors fare better than others.

One way to mitigate company risks is to buy or sell stock indices, like the S&P 500. This is not about trading in leveraged derivatives like options or futures, but rather trading in actual units of the indices. This is called Exchange Traded Funds or ETF in short.

ETFs are not only for stock indices, they also exist for commodity indices. Below is a list of the ETFs available to buy and sell just like a regular unit of share, in the Australian Stock Exchange (ASX), along with their respective ASX code.


Metal Commodities
GOLD Gold Bullion
ETPMAG Silver
ETPMPD Palladium
ETPMPT Platinum
ETPMPM Precious Metal Basket

State Street's Domestic Equity (started about 2001)
SFY SPDR S&P/ASX 50
STW SPDR S&P/ASX 200
SLF SPDR S&P/ASX Listed Property Funds

(iShares started about 2007)
International Emerging Nations Equity (as classified by iShares)
IZZ iShares FTSE/Xinhua China 25
IBK iShares MSCI BRIC
IEM iShares MSCI Emerging Markets
IKO iShares MSCI South Korea Index Fund
ITW iShares MSCI Taiwan

International Developed Nations Equity (as classified by iShares)
IVE iShares MSCI EAFE Index Fund - European, Australasian and Far East markets
IHK iShares MSCI Hong Kong Index Fund
IJP iShares MSCI Japan
ISG iShares MSCI Singapore Index Fund
IAA iShares S&P Asia 50
IEU iShares S&P Europe 350
IOO iShares S&P Global 100 - multinationals $US5bn+ cap
IXI iShares S&P Global Consumer Staples
IXJ iShares S&P Global Healthcare
IXP iShares S&P Global Telecommunications

US ETFs (iShares)
IVV iShares S&P 500 US large cap stocks
iHVV iShares S&P 500 AUD Hedged (US Exposure)  6Nov 2016
IJH iShares S&P MidCap 400 US stocks
IJR iShares S&P SmallCap 600 US stocks
IRU iShares Russell 2000 US small cap stocks


(Vanguard started about 2009)
VAS Vanguard Australian Share Index ETF - top 300 Aust shares
VTS MSCI US Broad Market Index - overall US mkt
VEU Vanguard all world, ex US, Shares Index
VAP - Vanguard Australian Property Sector Index   Updated 8 Dec 2014
DJRE - SPDR Dow Jones Global Real Estate Fund    Updated 26 Apr 2015
VGAD Vanguard MSCI Index International Shares Hedged    6Nov 2016




Please let me know if you know of any ETFs trading in the ASx which are not listed here.

Note that a small amount of management fees may be build into the prices of these ETFs. In addition, foreign exchange rates also affect the prices. One example is today's Gold price is USD $942/oz but the ETFs GOLD share is AUD $114.6. However, ETFs seem to be as close as we can get to actually trading indices and commodities without actually trading the physical stuff.