Why You Should Assess Your ETF Situation

Sorting out Your Situation with ETFs

Where do you stand right now with your portfolio?

If you can’t answer this question immediately, then you have some work to do. Given that we are just a little more than halfway through the calendar year, I think that’s as good a time as any to make sure you fine-tune your focus for the second half of what has so far been a most unusual year.

In last week’s Weekly ETF Report, we pointed out how important it is to conduct a halftime review of your holdings to make sure the stocks, bonds, mutual funds and, hopefully, exchange-traded funds (ETFs) you own are meeting your overriding investment objectives.

Of course, before you can tell if your holdings are meeting your goals, you have to know what your goals really are.

So, are you primarily a growth investor, or is income generation your chief goal? Are you the aggressive type that likes to roll the dice, or are you a restless sleeper that likes to know your money is safe, sound and tucked away?

The answer to these questions is crucial when trying to sort out your situation with ETFs. Fortunately, no matter what kind of investor you are, there’s an ETF to fit your needs.

In today’s new Weekly ETF Report video, I talk about the various growth-oriented ETF categories available right now. Indeed, the growth opportunities around the globe right now are umpteen. Some of my current favorites are international funds, emerging market funds and country-specific funds pegged to the emerging markets of Asia, but those are by no means your only options.

You see, when it comes to ETFs, particularly ETFs for the growth investor, the world is your proverbial oyster. You can choose from a variety of ETFs including sector ETFs, regional ETFs, market-capitalization ETFs and even actively managed ETFs.

Basically, if there’s a way to invest for growth, there’s an exchange-traded fund that can help. So, when you’re sorting out your situation for the remainder of the year, be sure you do so with ETFs.

ETF Talk: Asia Offers Regional Emerging Market Opportunity

Six of the 10 most populated countries in the world are in Asia, and the continent holds more than half of the world’s population. The second- and third-largest economies in the world, as measured by Gross Domestic Product (GDP), also are in Asia. The mix of frontier, emerging and developed economies in Asia creates a geographic region with an enticing combination of raw materials, markets to sell goods and both cheap and skilled labor. Exchange-traded funds (ETFs) that you can use to invest in Asia include: iShares Asia / Pacific Dividend 30 Index Fund (DVYA), SPDR S&P Emerging Asia Pacific ETF (GMF), SPDR S&P Small Cap Emerging Asia Pacific ETF (GMFS) and FTSE ASEAN 40 ETF (ASEA).

This set of funds is tied to a region that offers big economic potential. The funds also are among a wide variety of country-specific and Asia-area offerings.

DVYA seeks to track the results, before fees and expenses, of a non-diversified index of high-dividend-paying equities in Australia, Hong Kong, Japan, New Zealand and Singapore. Its top 10 holdings make up 44.1% of the fund’s total assets; the top holding is Telecom Corporation of New Zealand Ltd. This fund is most heavily invested in communication services, 21.62%, and financial services, 21.18%. DVYA has gained 8.32% this year, and it offers a yield of 5.18%.

GMF seeks to replicate the performance, before fees and expenses, of a market-capitalization-weighted index of emerging markets in the Asia-Pacific region. Its top 10 holdings make up 21.24% of GMF’s total assets; its top holding is Taiwan Semiconductor Manufacturing Co Ltd. This non-diversified fund is heavily invested in the technology sector, 26.48%, and financial services, 22.46%. Year-to-date, GMF has gained 10.10%. It has a small yield of 1.48%.

GMFS is a non-diversified fund that seeks to replicate the performance, before fees and expenses, of an index of small-capitalization companies domiciled in emerging Asia-Pacific markets. Small capitalization is defined here as a market capitalization of less than $2 billion U.S. dollars. GMFS’ top 10 holdings represent 8.91% of its total assets; the fund’s top holding is Tata Motors Ltd, 1.30%. The top sector holdings of this ETF are technology, 24.15%, and consumer cyclical, 16.37%. GMFS has gained 9.26% this year and has a yield of 3.42%.

ASEA seeks to replicate, before fees and expenses, the performance of an index of the 40 largest and most liquid companies in five Southeast Asian countries: Singapore, Malaysia, Indonesia, Thailand and the Philippines. ASEA’s top 10 holdings make up 46.37% of the fund’s total assets; its top holding is DBS Group Holdings Ltd, 6.41%. ASEA is largely invested in the financial services sector, 43.32%. This ETF has gained 11.23% this year, and it has a yield of 3.53%.

The resurgence of the Asian markets this year is one of the more positive developments for global equities. Fortunately, there are numerous ETF options for taking part in this growth, and some of the best are the four funds featured: iShares Asia / Pacific Dividend 30 Index Fund (DVYA), SPDR S&P Emerging Asia Pacific ETF (GMF), SPDR S&P Small Cap Emerging Asia Pacific ETF (GMFS) and FTSE ASEAN 40 ETF (ASEA).

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

Presenting Your Halftime ETF Scorecard

The first half of a most unusual year for the financial markets now is in the books, and that means it’s time to break out the halftime exchange-traded fund (ETF) scorecard to see which funds have led the charge higher, and how those funds compare to the exchange-traded funds representing the major market indices.

Let’s start by looking at the table below of the top-performing ETFs through the first half of the year. Note that the “%200DMA” column shows the percentage that each fund is above its 200-day moving average. This metric is important because it tells us how far extended a fund has become when compared to its long-term trend line. (*Data from 7/2/14)

As you can see by the table of the top 10 ETFs in the first half, it’s all about India, precious metals mining stocks, emerging markets and solar. The election in India of a pro-business Prime Minister was great for stocks in that country, and the rise in gold and silver prices helped mining stocks do very well. The rise in oil prices prompted renewed buying interest in alternative energy stocks like solar.

Now, as you can see, the huge gains in the top 10 ETFs outperform the still very strong performance of the major market indices. The table below shows the ETFs we use to mirror the most important market measures.

Here we see that although there have been big gains in all of these market vital signs, we haven’t yet seen a situation where these markets have extended far beyond their respective 200-day moving averages.

The biggest move above the long-term trend line is in crude oil, with the iPath Goldman Sachs Crude Oil (OIL) 8.05% above its 200-day moving average. Right now, gold, bonds and European equities are slightly above their long-term trend lines.

In our Successful ETF Investing advisory service, we currently have exposure to alternative energy stocks, precious metals and mining stocks and emerging markets. If you are looking for a way to generate ideas that will fit your financial goals, then you owe it to yourself to check out Successful ETF Investing today.

Let Us Be Your Coach

So, did your portfolio outperform the market through the first half of the year? Are you disappointed by the results you’ve received this year? Do you have a lot of cash on the sidelines that you don’t know what to do with?

If your answer to any of these questions is “yes,” then you need our Wealth Coaching services. You see, when it comes to your money, it’s always personal. That’s why we offer One-on-One, personal Wealth Coaching sessions directly with me, Doug Fabian.

These 90-minute, One-on-One Wealth Coaching sessions begin with a review of your goals and your existing investments. Then, we develop a plan specifically tailored to you, including how Fabian Wealth Strategies can help you get where you want to be.

Contact us today at 800-391-1118 to schedule your FREE, no obligation one-on-one Wealth Coaching session, and find out how Fabian Wealth Strategies can work for you.

NOTE: Fabian Wealth Strategies is a SEC registered investment adviser, and is not affiliated with Eagle Financial Publications.

Introducing the New Successful ETF Investing

After nearly four decades of helping investors make money, the one thing we know is that in order to continue delivering the best possible investment advice, we have to keep evolving and keep adjusting to the tools the market provides. This is a philosophy that my father, Dick Fabian, held when he first started the flagship Fabian publication, and this is a philosophy that still operates at the core of our business approach.

Our belief is that ETFs will continue to dominate the investment landscape, and that means they also should be the primary vehicles in your investment portfolio. With that concept at the forefront, I am proud to introduce the new Successful ETF Investing newsletter.

Our newly redesigned, revamped and renamed publication offers an enhanced focus on ETFs, a focus that includes new sections, new features and new portfolios to help income, growth and even very aggressive investors make more money.

One example of a pick designed for the aggressive investor is the recent addition of a small-cap, country-specific ETF in one of the hottest emerging market countries in Asia. We made gains of more than 25% on this pick, and that’s the kind of profit potential we’re seeking in our new aggressive recommendations.

We are very proud of our tuned-up version of Successful ETF Investing, and we know you’re going to love it. Check out Successful ETF Investing right now to discover what it’s all about.

Drunk on Samuel Adams’ Wisdom

“It does not take a majority to prevail… but rather an irate, tireless minority, keen on setting brush fires of freedom in the minds of men.”

–Samuel Adams

Did you know that during the revolutionary war, only about 3% of colonial British subjects took up arms against the King? If that doesn’t prove to you what a small minority is capable of, then nothing else will. The lesson here is never to forget what’s possible, even if you are vastly outnumbered.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about how to determine if your ETFs match your goals. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

All the best,

Doug Fabian

San Francisco MoneyShow, Hilton Union Square, Aug. 21-23: I’ll be speaking at the San Francisco MoneyShow this August, and I hope to see you there. Other speakers at this year’s event include Dr. Mark Skousen, Rich Karlgaard (publisher, Forbes), Roger Conrad, Elliot Gue and John Ransom. Admission is complimentary to my subscribers, but you must register: For details, call the Money Show at 800-970-4355 and mention priority code 035777.