My Three Favorite ETFs Poised to Profit

My Three Red-Hot MoneyShow ETFs

This week certainly got started in unusual fashion for me, as I was nearly thrown out of bed on Sunday by the force of a 6.0 earthquake that rocked the Napa Valley. I was staying in that beautiful part of the country for the annual San Francisco MoneyShow, and this year Mother Nature made it quite memorable.

Being part of yet another earthquake (I’ve been through many in my life, living in Southern California) reminded me that you need to be prepared for natural disasters. Of course, you also have to be prepared for financial disasters, too, and knowing what’s happening in the markets right now is the first step to preparedness.

Now, since our last Weekly ETF Report, there hasn’t been much of a sense of disaster in the markets. In fact, it’s been quite the opposite, which actually is a worry in itself. Stocks powered higher, with U.S. stocks leading the global markets to new highs. The S&P 500 now trades at the psychologically significant 2,000 level, a clear indication that the fear factor in stocks just isn’t anywhere to be found.

While the gains in the U.S. market have been strong of late, the U.S. market is not one of my favorites for new money. In fact, during last week’s MoneyShow, I told attendees at one of my seminars about three exchange-traded funds (ETFs) that I really like right now.

So, if you didn’t have a chance to attend the MoneyShow, no problem. I am going to present three red-hot MoneyShow ETFs for you to check out right now.

WisdomTree Emerging Markets Small Cap Dividend ETF

This fund holds stocks in the emerging markets, a segment that I am really fond of right now. More importantly, the WisdomTree Emerging Markets Small Cap Dividend ETF (DGS) only holds small-cap companies from specific emerging market countries, and its focus is mostly on Asia.

One thing I also like about DGS is that despite the fact that it holds small-cap companies, the fund actually pays a pretty healthy dividend yield of 2.55%. In today’s environment, a 2.55% yield is nothing to sneer at. Moreover, DGS has seen a near-10% gain over the past six months, and the fund now trades above both the 50- and 200-day moving averages.

Deutsche X-trackers Harvest CSI300 CHINA A

The second red-hot MoneyShow ETF I presented was the Deutsche X-trackers Harvest CSI300 China A Shares (ASHR). This is a fund that I really like, as it’s a way to get exposure to the undervalued China A shares market. These are stocks that haven’t been available easily to the investing public. But thanks to ETFs such as ASHR, foreign investors now can participate in this booming sector.

During the past three months, ASHR has surged some 12% and now trades well above its May low. I expect more gains in ASHR, and that’s why we currently recommend this fund to subscribers of my Successful ETF Investing advisory service.

YieldShares High Income ETF

The final fund I like here is geared toward income investors, and it’s the YieldShares High Income ETF (YYY). This fund actually holds a basket of closed-end funds, which feature high-yield investments that provide the dividend payout juice in YYY.

How much yield? Well, how about a current yield of 8.91%? That’s the kind of performance you need if your goal is income generation, and that’s why we currently recommend YYY in our advisory service.

For more on these three funds, or to find out about other red-hot funds that both growth and income investors need to check out right now, I invite you to subscribe to Successful ETF Investing today!

ETF Talk: Leveraging Bulls and Bears in Russia

Russia is a country of rich natural resources and a well educated population, but many investors are afraid of it. In the long term, those investors are often right. Russia has gone from strength (a successful hosting of the 2014 Winter Olympics) to show of strength (the invasion of Crimea) to self-injury (a ban on food imports which may drive up Russian consumer prices 2% this year). But investing in a way that is counter-cyclical to other investors’ fears can bring great profits, particularly when investing through a triple-leveraged fund such as the Direxion Daily Russia Bull 3x Shares (RUSL) or the Direxion Daily Russia Bear 3x Shares (RUSS).

RUSL, the bull exchange-traded fund (ETF), seeks daily investment results, before fees and expenses, of 300% of the performance of an index of publicly traded companies that are listed on an exchange in Russia or which generate at least 50% of their revenues in Russia.

RUSS, the bear ETF, attempts to generate results which are 300% of the inverse performance of the same index. It does this primarily through financial positions which allow it to short assets in the index.

RUSL has lost 45.03% this year, but it has gained 14.67% since the start of August. Because these funds are designed for daily returns, their long-term trend is not necessarily a real concern for investors. RUSS has lost 1.69% this year and 15.75% since August began. As leveraged ETFs, neither of these funds distributes dividends.

The composition of both funds changes daily, using financial instruments which target the performance of the relevant index. The index is non-diversified, with the largest holdings in energy, 41.47%; materials, 16.13%; telecommunications, 12.43%; and financials, 11.69%. It also has additional holdings in consumer staples, information technology, utilities, industrials, consumer discretionary and healthcare. The top 10 holdings in the index make up 15.48% of its assets. The largest holdings are Gazprom OAO, 8.28%; AK Transneft OAO, 2.09%; Eurasia Drilling Co Ltd, 1.78%; Globaltrans Investment PLC, 0.74%; and E.ON Russia JSC, 0.52%.

Long-term investment should be based on a consideration of the fundamentals and business prospects of a specific company, country, industry or sector. Short-term trading is much more dependent on your ability to react rationally to Mr. Market’s mood swings. Investing in a leveraged fund, such as Direxion Daily Russia Bull 3x Shares (RUSL) or Direxion Daily Russia Bear 3x Shares (RUSS), greatly amplifies the potential reward.

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.

Your August ETF Snapshot: The Top China ETFs

As many of my readers and podcast listeners know, I have been very positive on emerging markets this year, having dedicated two monthly snapshots to ETFs in the space. This month, I’ve highlighted one of my favorite emerging market sub-sectors, China.

Indeed, the month of July proved to be a real breakout month for Chinese stocks, with the Shanghai Stock Exchange Composite Index surging nearly 7.5%. That’s outstanding on its own, but it is particularly telling considering the S&P 500 sank 1.51% in July.

To see which funds made our Top China ETFs list, just check out our ETF Snapshot today!

Time for a Little Coaching

The market is vaulting to new highs, but is your portfolio?

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 1-800-391-1118 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 Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Financial Publications.

Orwell on Arguments

“Several of them would have protested if they could have found the right arguments.”

― George Orwell, “Animal Farm”

The market keeps pushing to new highs, yet there are still plenty of good arguments in favor of the cautious approach here. And while I try to make sure you always approach your investing with caution, sometimes the right argument is just to embrace the trend and get your money positioned in the sectors most likely to continue to outperform.

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 my best advice on ETFs. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

All the best,

Doug Fabian