It’s been an interesting week in the world of ETFs: The United States scrapped a missile defense system in Eastern Europe and gold is now holding steady above $1010/oz. Here are the ETF Database staff picks of the week’s most important and interesting stories from around the Web:
The author highlights several reasons why he believes that emerging markets are a better investment than domestic funds. These reasons include a surprisingly low amount of increased volatility when adding emerging market funds to a portfolio, currency risk and growth prospects. The author, Gary Gordon, truly makes a compelling case for increased emerging market investment.
ETF Plays for $3,000 Gold at ETF Database:
Michael Johnston discusses how several prominent investors have begun to forecast a dramatic increase of the price of gold to well over $3,000/oz. Michael says that continued pressure on the dollar as well as strong fundamentals from China make this high price target which would have been an outrageous level just two years ago, plausible today.
An Early Peek at 130/30 ETF Strategies at Index Universe::
Discussed in this article are some of the strategies that 130/30 ETFs use to try to achieve alpha. While it is generally well-known that these funds short 30% of the portfolio and use the proceeds from that sale to go long an extra 30%, the rest remains unclear. The author says that funds such as CSM rebalance every month to have a beta of 1 and that the funds generally go short on small firms that make up a tiny portion of the S&P 500 after they have had price spikes and underweight large names like Exxon and Apple compared to their weighting in the S&P 500.
Shorting Natural Gas ETF (UNG) at Stock Trading Hero:
The author takes a look at the ever popular UNG and uses technical analysis to make the case for a price decline. The author believes that $12 will be a key point for UNG, representing its short term resistance level and 50 day SMA.
Oil ETFs Are Broken at Business Insider:
This article discusses how current oil ETFs suffer from the oil market being in ‘contango’ whereby longer term oil contracts are at higher prices than near-term ones. This has led to USL outperforming USO since USL invests in longer-term futures. However, both have underperformed oil’s spot price significantly.
That’s it for This Week in ETFs: happy reading. Have a great weekend everyone!