Uncertainty Is Here To Stay

by on July 14, 2012 | ETFs Mentioned:

Markets ended the week fairly flat thanks to Friday’s massive rally, which helped cover up the dismal performance from earlier in the week. Back-and-forth trading was the theme yet again last week as investors continue to juggle looming threats from the eurozone along with lackluster economic data releases at home. To top it off, earnings season kicked off to a weak start as industry bellwethers Alcoa and Applied Materials both missed their marks, setting a rather pessimistic tone for upcoming releases [see also 17 ETFs For Day Traders].

Actionable ETF Trade Ideas

Last Week’s Actionable ETF Ideas
Ticker Position Week Performance







Our picks from Monday’s Insider posted mixed results during another choppy trading week on Wall Street. Below, we highlight how our trade ideas fared during the week [sign up for a free trial of ETFdb Pro to get actionable ETF ideas every Monday, as well as access to more than 45 all-ETF model portfolios].

Trade #1 Short XRT: Up 1.4%

This recommendation started off on a weak note as sideways price action dominated Wall Street for the first two trading days. However, selling pressures increased as we had anticipated and XRT sank lower three consecutive days in a row, hitting a low of $57.58 a share on Thursday. Buyers returned on Friday, which effectively erased a hefty chunk, although not all, of our profits in this trade.

Trade #2 Long IXN: Down 3.1%

This trade started off the week on a worrisome note as selling pressures took hold right from the opening bell on Monday morning. IXN sank alongside broad equity indexes throughout the rest of the week as profit taking became the dominant theme. Thursday proved to be a pivotal day as IXN sank below our outlined stop-loss at $62 a share, prompting us to stick to the rules and cut our losses. This ETF did bounce back higher on Friday, although it still ended the week well below Monday’s opening price.

Trade #3 Short FXY: Down 0.4%

This was by far the most frustrating recommendation on the week. Our prediction that the U.S. dollar would inch higher turned out to be correct as uncertainty levels remained elevated just as we had anticipated; however, the Japanese yen was stubbornly strong in the currency markets and managed to win the uphill battle versus the greenback. FXY inched higher throughout the week, leading us to incur a minimal, although a very frustrating, loss.

ETFdb Portfolios

Retirement ETFdb Portfolios

Our Low Volatility ETFdb Portfolio managed to hold its ground best, slipping less than 1% lower during an otherwise dismal week for equity markets. From a year-to-date perspective, our 20 Years Til Retirement portfolio is leading the way followed by our more aggressive 30 Years Til Retirement.

Regional ETFdb Portfolios

All of our regional portfolios ended up in red territory as profit-taking pressures prevailed in virtually every corner of the globe. The best performer year-to-date remains the Africa-Centric Portfolio followed closely by the Emerging & Frontier Markets Portfolio.

Themed ETFdb Portfolios

Our Better-Than-AGG Total Bond Market Portfolio was able clinch a small gain on the week thanks to its unique strategy. From a year-to-date perspective, the healthcare centric Baby Boomers Portfolio remains at the head of the pack.

New ETF Highlights

As this month comes to a close, the ETF world saw three new funds hit the street this past week. Check out our ETF Launch Center for complete updates on all new ETFs.

ETF Launches

Global Alpha & Beta ETF (RRGR)

AdvisorShares rolled out yet another actively-managed ETF, with its debut of the new Global Alpha & Beta ETF (RRGR). The fund was created by a partnership formed with Roger Nusabaum, better known as “Random Roger,” an experienced money manager who also happens to be a popular financial blogger. RRGR offers exposure to multiple asset classes, including domestic and international stocks and bonds.

UltraPro Financials (FINU)

  • Launch: July 12th
  • ETFdb Category: Leveraged Equities
  • Structure: ETF
  • Expense Ratio: 0.95%

ProShares added yet another fund to their sector-specific leveraged ETF lineup with its launch of the new UltraPro Financials (FINU). The fund offers 300% daily leveraged exposure to the Dow Jones U.S. Financials Index, a benchmark that consists of large banking institutions.

UltraPro Short Financials (FINZ)

  • Launch: July 12th
  • ETFdb Category: Leveraged Equities
  • Structure: ETF
  • Expense Ratio: 0.95%

ProShares also introduced its new UltraPro Short Financials (FINZ), an inverse version of FINU. The fund offers -300% daily leveraged and inverse exposure to the Dow Jones U.S. Financials Index, a benchmark that consists of large banking institutions.

Disclosure: No positions at time of writing.