Making Money Alert
ETF Talk: Broad-Based Fund Gives Hope
10/19/2011
When the nightly news reports stock market news, you generally are provided with prices for the S&P 500, the Dow Jones Industrial Index and the NASDAQ Composite. But as savvy investors, we know there are more indexes than the big three. In fact, many professional traders and investors focus their attention on the Russell family of indexes more so than the S&P or the Dow.
The Russell indexes initially were created to better track the performance of investment managers, which brought about the Russell 3000 Index. This index is divided into smaller subsets, such as the Russell 1000, which is the index that is tracked by the iShares Russell 1000 Value Index Fund (IWD). The iShares Russell 1000 Value Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the large capitalization value sector of the U.S.
With the market in turmoil, it has beaten down all of the indexes to attractive entry points. In fact, many of the technical indicators for IWD are signaling a very bullish outlook. Average volume rose more than 5% in the past week. IWD has crossed above its 10-day and 50-day simple moving averages and is moving upwards. Currently trading at around $61, IWD is in the middle of its 52-week trading range. During that time frame, IWD has recorded a low of $53.44 and a high of $70.88. At its current price point, with all the indicators showing bullish signals, IWD could be a good ETF to consider buying.
The top 10 holdings for IWD, as of Oct. 18, are Chevron Corp, 3.12%; General Electric Co, 2.84%; AT&T Inc, 2.77%; Procter & Gamble Co, 2.71%; Pfizer Inc, 2.40%; Johnson & Johnson, 2.25%; Berkshire Hathaway Class B, 2.10%; JPMorgan Chase, 2.09%; Intel Corp, 1.99%; and Wells Fargo & Co., 1.89%. The index currently has 653 different holdings with an average market cap of $66.09 billion. The entire index has a market cap of $8.12 trillion. Indeed, IWD is highly liquid and about as well diversified as any ETF that tracks an index.
As always, if you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my ETF Trader service. I am happy to answer your questions, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.