Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itsel
With hundreds of new ETFs seemingly launched every year, it isn’t getting any easier to stand out from the crowd. That said, 2022 saw an inflation-focused ETF launched just last year from RIA shop Horizon Kinetics outperform ETFs from some notable players like First Trust and Invesco. The Horizon Kinetics Inflation Beneficiaries ETF (INFL) was [...]
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2022’s broad market sell-off hasn’t been easy for investors, to put it mildly. It’s not easy to enjoy the holiday season simultaneously looking back at such a bumpy 2022 and peering ahead at a very uncertain 2023, with a recession a distinct possibility. Active equity investing could be a welcome help for investors’ portfolios, with [...]
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VettaFi Financial Futurist Dave Nadig appeared on Yahoo Finance to discuss the big year for ETFs. “We had over 400 launches this year,” Nadig said, which he thinks could be a record. Looking at funds that launched this year, Nadig noted the Fairlead Tactical Sector ETF (TACK), which uses a sector rotation strategy and technical [...]
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In a special ETF Prime, VettaFi’s Lara Crigger and Morningstar’s Ben Johnson sat down with host Nate Geraci to recap the top 2022 stories that were in ETFs and look ahead to 2023. Setting the table, Geraci noted at the top of the show that, “it was another monster year for ETFs. Second best year of inflows, [...]
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In trading on Wednesday, shares of the iShares Core MSCI Pacific ETF (Symbol: IPAC) crossed above their 200 day moving average of $54.01, changing hands as high as $54.07 per share. iShares Core MSCI Pacific shares are currently trading up about 0.5% on the day. The chart bel
Markets are rallying on the hope of better performance for companies after Nike and FedEx both reported quarterly earnings that beat expectations, reported CNBC. With a hawkish Fed looming over early next year, economic slowing is expected in the new year and dividends will remain a strong choice for many advisors and investors in a [...]
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Dividends: they’ve been hot towards the end of this year, and for good reason, offering equity investments that cushion portfolios with current income. There’s a heaping helping of uncertainty around the corner in the new year with the Fed’s rising rate scheme possibly inciting a recession, so investors on the lookout for a 2023 dividend [...]
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Investors have had a lot of volatility to face when looking to their international equities slice this year, from Russia’s invasion of Ukraine and global energy costs to China’s “Zero COVID” policies and its economic slowdown. That said, 2023 presents an opportunity to reconsider where to allocate abroad for investors, with some notable candidates in [...]
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Highlights 2022 was a historic year for losses in the U.S. financial markets1 In 2023, market volatility will likely persist due to continued headwinds faced by the U.S. economy Fixed income asset classes have the potential to deliver better total return performance in 2023 How investors are positioned in their fixed income portfolios matters, as [...]
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The First Trust International Equity Opportunities ETF is seeing unusually high volume in afternoon trading Wednesday, with over 958,000 shares traded versus three month average volume of about 61,000. Shares of FPXI were up about 0.6% on the day.
Decarbonization is happening globally at increasing trajectories as countries and regulatory bodies work to bring emissions in line with a sustainable future. The transition to net-zero emissions by 2050 is already putting a strain on the core metals integral to renewable energy and green technologies, and with increasing demand, transitional commodities provide a unique investment [...]
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In trading on Wednesday, the ARK Genomic Revolution ETF is outperforming other ETFs, up about 2.5% on the day. Components of that ETF showing particular strength include shares of Adaptive Biotechnologies, up about 13.5% and shares of Butterfly Network, up about 13.3% on the d
While they may not have had the best year thanks to rising global inflation and a stronger dollar, emerging markets (EM) can still add a dose of growth as well as diversification to a portfolio heading into the new year. That said, investors may want to give Vietnam a closer look. The macroeconomic environment wasn’t [...]
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Agricultural commodities like soybeans have witnessed a rollercoaster ride with inflation and geopolitical events like Russia’s invasion of Ukraine providing a heavy dose of volatility. Heading into the new year, soybean prices will still hinge upon those factors, but also the production aspect in the country of Brazil. It appears consumers may get a much-needed [...]
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Previewing the kind of insight and analysis that will be on display at Exchange, VettaFi vice chairman Tom Lydon, head of research Todd Rosenbluth, and financial futurist Dave Nadig appeared at the Investment Insights Summit last week. Speaking to what VettaFi does, Rosenbluth said, “I view a lot of what we do from a research [...]
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The Chinese market continues to attract investors from all around the world, lured by comparatively low valuation ratios and the prospect of strong earnings growth. However, it also remains highly volatile and suffered numerous steep losses in 2022. Risk factors this year included:
Contagion in China's real estate market due to the Evergrande credit crisis.
Crackdowns on the Chinese technology sector from the government.
Political risk after President Xi Jinping secured an unprecedented third term in office.
Retail closures due to lockdowns and quarantines from China's strict zero-COVID policy.
Protests against the government's strict zero-COVID policies.
Despite these challenges, investors continue to pour money into Chinese equities. A good reason to do so is based on the country's historically strong performance when U.S. stocks falter. Case in point, from 2000 – 2007 the U.S. market stagnated, while the Chinese market took off.
Currently, Chinese equities have a 0.52 correlation with U.S. markets, which coupled with their high volatility and positive expected returns could make them a good diversifier. Here are three ETFs holding Chinese equities to bet big on a comeback with.
iShares MSCI China ETF (MCHI)
With assets under management (AUM) of $7.5 billion, MCHI is one of the most popular broad-market Chinese equity ETFs available. The ETF tracks the MSCI China Index which holds roughly 630 Chinese equities based on their market-cap weights.
Value investors will quickly notice the low valuation ratios of this ETF. Currently, MCHI has an average price-to-book ratio of 1.59 and price-to-earnings ratio of 11.02, far lower than its U.S. counterparts. While this does look undervalued, it could also be a value trap given that political risk is hard to price.
Currently, the top holdings in MCHI include Tencent at 12.20%, Alibaba at 8.33%, Meituan at 4.79%, and JD.com at 3.18%. Over 31% of the ETF is held in the consumer discretionary sector, with communications and financials coming in second and third. MCHI costs an expense ratio of 0.57%.
KraneShares CSI China Internet ETF (KWEB)
KWEB tracks the CSI Overseas China Internet Index, which holds Chinese equities whose primary business or businesses are focused on internet and internet-related technology. The ETF rallied strongly by 34% over the last month as the Chinese government began to relax its zero-COVID policies.
KWEB is the ETF to buy if you're looking for a concentrated sector play. According to Kraneshares, this sector has great growth potential, with Chinese retail web sales totaling $2 trillion in 2021 compared to $870 billion in the U.S., and online shopping accounting for 25% of retail purchases in 2021.
The top holdings are similar to MCHI with Alibaba, Tencent, JD.com, and Meituan once again making an appearance. However, the sector breakdown is much more focused on consumer discretionary and communication services. Surprisingly, information technology only came in at 2.5%.
Global X MSCI China Consumer Discretionary ETF (CHIQ)
I think the Chinese market sector with the most to gain from a re-opening of the economy and a relaxation of the zero-COVID policies is consumer discretionary. The retail, restaurant, entertainment, and travel companies in this sector have been hamstrung in recent years and are due for a comeback.
An ETF that targets the Chinese consumer discretionary sector is CHIQ, which holds large and mid-cap China A, B and H shares, red chips, P-chips, and foreign listings. Currently, this includes 73 holdings, with names like Yum China Holdings, NIO, and Alibaba making an appearance.
Unsurprisingly, CHIQ is more volatile than its benchmark, with a beta of 1.20 compared to the MSCI Emerging Markets Index. However, its beta compared to the S&P 500 is much lower at 0.42, making it a potentially good diversifier. The ETF costs an expense ratio of 0.65%.
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the SPDR S&P Biotech ETF (Symbol: XBI) where we have detected an approximate $393.4 million dollar inflow -- that's a 5.0% increase week over week i
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the SCHD ETF (Symbol: SCHD) where we have detected an approximate $720.8 million dollar inflow -- that's a 1.7% increase week over week in outstanding u
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the JPST ETF (Symbol: JPST) where we have detected an approximate $619.7 million dollar inflow -- that's a 2.7% increase week over week in outstanding u