All Eyes on ETFs Sep ’22

Is Now A Good Time To Buy ETFs?

S&P 500: This Bear Market Is About To End (Technical Analysis).

An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies. The first ETF was the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index.

ETFs are versatile investment securities offering a wide range of benefits for investors. Whether you want to passively track a broad market index or invest in a niche area of the market, ETFs provide a low-cost, simple means of accessing a basket of securities in one fund.

When you buy an ETF, you’re buying a basket of securities wrapped into one investment that trades on an exchange. Most ETFs passively track an underlying index, which is a representation of other securities or asset types, such as stocks, bonds, commodities, or currencies.

Pros of ETFs:

  • Diversification: ETFs provide exposure to dozens, or even hundreds, of securities in just one basket.
  • Specialization: Certain specialty ETFs enable access to niche areas of the market.
  • Low cost: Because ETFs are passively managed, the operational costs are extremely low compared to actively managed portfolios. 
  • Tax-efficiency: For the ETFs that track a benchmark index, there is very little turnover.
  • Market orders: One of the stock-like aspects that can be a benefit for investors is the ability to place market orders.

Cons of ETFs:

  • Trading costs: Many ETFs can be traded at zero commission and with no transaction fee. However, some brokers will charge commissions to trade certain ETFs on their platform.
  • Illiquidity: ETFs that have low trading volumes can have wide bid-ask spreads.
  • Settlement: As is the case with stocks, ETF settlement is T+2.

Types of ETFs:

  • Equity ETFs such as S&P 500, Dividend, and International ETFs.
  • Fixed-Income or bond ETFs (Government Bonds, corporate bond, etc.)
  • Commodity ETFs (Gold, Silver, Oil, Copper, etc.)
  • Currency ETFs (Forex)
  • Real Estate ETFs (REIT) – high-yielding investments.
  • Specialty ETFs – semiconductor, etc.

The Pup’s Weekend Dig – Does the oversold bounce continue?

Sectors On Watch: $XBI – Biotech, $XLY – Consumer Discretionary, $XLV – Healthcare, $TAN – Solar, and $XLU – Utilities (Sep 11, 2022, 8:52 PM).

Zacks.com

  • Wed, Sep 14, 2:08 PM 5 Reasons to Buy Commodities ETFs Right Now: After a decade of underperformance, commodities are experiencing a huge rally due to the Russia-Ukraine war, sky-high inflation, pent-up demand after the COVID-19 pandemic, widespread vaccination, chances of more oncoming COVID-19 antiviral pills and still-moderate rates.
  • Mon, 12 Sept at 14:04 Stocks are well off their June lows with the Dow up 7.43%, the S&P up 10.9%, the Nasdaq up 13.8%, and the Russell 2000 up 14.1%.
  • September 10, 2022 Right now, it’s easier than ever to own crypto thanks to the launch of Bitcoin ETFs. In total, 38 publicly traded companies are holding over $5 billion in Bitcoin. Between ETFs, countries like Nicaragua, and public and private companies, there is over $28 billion in Bitcoin being held on balance sheets like treasuries.
  • Thu, Sep 8, 2:05 PM. Stocks Soar As Oil Prices Fall: the Fed is widely expected to raise rates by another 75 basis points at their next FOMC meeting on September 20-21. In fact, even with rates climbing, Q3 GDP estimates are forecast at 1.4%. That’s a big improvement from Q2’s -0.6% and Q1’s -1.6%. In other news, MBA Mortgage Applications fell -0.8% w/w, with purchases down -0.7%, and refi’s down -1.1%.
  • This year’s first half performance (down nearly -21%), was strikingly similar to that of 1970 (also down -21%). And in both periods, high inflation was an issue. But in the second half of 1970, the S&P was up 27%.
  • Many dividend-paying stocks have held up well this year as the major indices entered a bear market. Contrary to conventional wisdom, the opportunity still exists for investors to create a reliable stream of income from the equity markets. Dividends are a fantastic way to generate sizeable returns from stocks.
  • While blockchain was put on the map for its use in the cryptocurrency market, it’s evolved into an indispensable business tool for processing all types of transactions and data transfers – from financial, to shipping, to health records, and more. It’s truly revolutionizing virtually all industries that rely on security, cost efficiency, and speed.

SeekingAlpha

TradingView

Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated once at the end of every day like a mutual fund does.

TradingView SPY S&P 500 etf Head and Shoulders Chart Pattern

Barchart

ETFs market overview
source: barchart.com

ETF Funds By Asset Class

Use this ETF Screener to search for ETFs by Asset Class, including Equity ETFs, Commodity ETFs, Currency ETFs, Fixed Income ETFs, and more.

AIolux

 [HYG] iShares iBoxx $ High Yield Corporate Bond ETF
 [HYG] iShares iBoxx $ High Yield Corporate Bond ETF
source: AIolux

Macroaxis

Monday September 19, 2022 World Market Overview

world stock markets
source: macroaxis
Correlation Matchups

The Correlation Coefficient is a useful tool to identify correlated or non-correlated securities, which is essential in developing a diversified ETF portfolio. It tells us the relationship between two positions you have in your ETF portfolio or considering acquiring. Over a given time period, the two securities movetogether when the Correlation Coefficient is positive. Conversely, the two ETF assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions’ relationship to each other is valuable for analyzing and projecting your portfolio’s future expected return and risk.

Investors’ overexposure to a single market brings diversification risk in a portfolio, leaving it vulnerable to losses in that economy and underexposes it to markets in other parts of the world. For the same reason, if you are currently managing a portfolio composed of equities from multiple ETFs, you don’t want your positions to be highly correlated, even at the expense of accepting lower expected returns. Generally speaking, low correlations across different ETFs is the main idea behind global portfolio diversification, and without it, there’s no benefit to the rebalancing of internationally exposed ETF portfolios.

market correlations
source: macroaxis

S&P 500 Etf Profile

Etfs . USA . Etf . SP 500 Utilities

XLU market performance
source: macroaxis
S&P 500 Summary:

S&P 500 is selling for under 74.47 as of the 19th of September 2022; that is -0.37 percent decrease since the beginning of the trading day. The etf’s last reported lowest price was 74.34. S&P 500 has a very small chance of experiencing financial distress in the next few years and had a good performance during the last 90 days. Equity ratings for S&P 500 Utilities are calculated daily based on our scoring framework. The performance scores are derived for the period starting the 21st of June 2022 and ending today, the 19th of September 2022. Click here to learn more.

In seeking to track the performance of the index, the fund employs a replication strategy. S&P 500 is traded on NYSEArca Exchange in the United States. More on S&P 500 Utilities

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