From the monthly archives:

August 2012

Investors were fixated on the words of Bernanke today, as the Fed Chairman delivered his much anticipated speech at the central bank’s annual economic symposium in Jackson Hole. Prior to the speech, investors flooded the market, spurring an early morning rally. But after Bernanke indicated that the central bank will not be taking immediate actions but that they are ready to step in should the economy worsen (essentially regurgitating what he has been saying for the past several months), stocks quickly sold off. But of course the reaction was short-lived and equities quickly climbed back up since now investors are apparently satisfied with another “hint” of QE3. And with the mere notion that the central bank is keeping all of their options on the table, markets ended the volatile session on a relatively high and optimistic note [create customized ETF analysis with the ETF Analyzer].  [click to continue…]

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First Trust announced this week the launch of a new ETF that will combine exposure to one of the world’s most widely-followed stock market indexes with VIX call options. The new First Trust CBOE S&P 500 VIX Tail Hedge Fund (VIXH) will seek to replicate an index that includes each component of the S&P 500 along with a variable percentage allocated to a long position in a call option on the CBOE Volatility Index (better known as the “VIX”), a unique combination that should allow it to limit downside loss potential while still offering considerable upside. The underlying index is reconstituted every month [see complete listing of new ETFs].

Mitigating Risk

The idea behind VIXH is relatively straightforward; it provides investors with exposure to a core asset class while also providing downside protection that may limit losses in the event of steep declines in equity markets. Because the VIX tends to spike during sell-offs (it is, after all, also known as the “fear index”), the call option held by VIXH should see a significant appreciation in value if stocks tumble. That can potentially help to offset losses in the components of the S&P 500.

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Equity markets have been drifting sideways with a downward bias as low trading volume remains a dominant theme while anticipation ahead of today’s speech at Jackson Hole has also played a key part in keeping a lid on investors’ confidence. Despite the rather uneventful trading activity on Wall Street, investors have digested a number of […]

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Equity markets remain plagued with low trading volumes and anticipation ahead of today’s speech at Jackson Hole has only added to the list of uncertainties keeping a lid on investors’ confidence. On the data front, the outlook remains mixed; weekly jobless claims came in unchanged from last week’s figure of 374,000 while personal income and consumer spending both met […]

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Bearish sentiment took over Wall Street today, as escalating fears about the Euro Zone and anticipation ahead of Bernanke’s speech spurred a global market sell off. Sour economic reports weighed heavily on investors with the Euro Zone’s measure of economic sentiment reported to be at its lowest level in over two years. The U.S. Labor […]

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Three ETFs Up 100% (And More) In 2012

by on August 30, 2012 | Updated September 24, 2012

With two thirds of 2012 in the books, the year is on track to be a relatively solid stretch for most investors. Despite an abundance of potential land mines and significant challenges, such as stubbornly high unemployment, general uncertainty over the future of the Euro zone, and a “fiscal cliff” on the horizon, stocks have […]

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Stocks managed to end up in green territory despite chugging along sideways throughout most of the trading session yesterday. Low volumes remain a dominant theme this week as many investors are staying off to the sidelines in anticipation of Ben Bernanke’s speech on Friday. Before his appearance at Jackson Hole, the Fed Chairman will surely consider today’s Beige Book […]

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The release of the Fed’s Beige Book today left investors even more leery ahead of Chairman Ben Bernanke’s speech on Friday. In the minutes from the last FOMC meeting, the Fed had given the markets yet another strong signal that it is preparing to take action to boost the nation’s lackluster recovery, but had emphasized that […]

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Rogers Eyes Russia

by on August 29, 2012

After 18 long years of negotiations, Russia has finally joined the World Trade Organization (WTO), marking a major stride forward in the nation’s continued effort to grow its presence in international affairs and on the global economic stage. Russia is now the 156th member of the WTO and many might find it surprising it is also the last G-20 member to join the […]

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Equity markets continued to chug along sideways as low trading volumes permeated Wall Street for another session, showcasing investors’ uncertainty ahead of Fed Chairman Bernanke’s speech at Jackson Hole this Friday. The Nasdaq managed to pull ahead of the Dow Jones Industrial Average and the S&P 500 Index for another day as mixed economic news […]

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Once again markets traded in a tight range for the majority of the session, dipping in and out of red territory. A pair of mixed economic reports kept trading volumes at painfully low levels as investors weighed the latest news. For the first time in two years, U.S. home prices rose in June as more […]

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With issuers big and small continuously filling the development pipeline, the exchange-traded product lineup is inching closer and closer to the 1,500 mark. Innovation has always been one of the guiding pillars in the ETF industry and the debut of Exchange Traded Concepts only marks another stride forward in democratizing the investment landscape. Exchange Traded Concepts, ETC for short, recently […]

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