Tuesday, April 30, 2013
Wednesday, April 24, 2013
Floating Rate ETF | ETF Trends
Floating Rate ETF | ETF Trends
ETFs that focus on floating rate notes and senior bank loans have been gathering a lot of cash lately as fixed-income investors position for rising interest rates and inflation.
For example, iShares Floating Rate Note ETF (NYSEArca: FLOT) has more than tripled in size since the beginning of the year to $1.4 billion in assets.
On Monday alone, the BlackRock ETF had large inflows reaching nearly $500 million, according to WallachBeth Capital. The floating rate note fund ranks second on the list of best-selling ETFs the past week.
Similarly, PowerShares Senior Loan Portfolio (NYSEArca: BKLN) has been extremely popular so far in 2013 as investors look for bond ETFs that provide protection from rising interest rates.
BKLN has experienced net inflows of $1.7 billion year to date, according to IndexUniverse data, taking total assets to $3.2 billion.
BKLN is designed for investors “who may be looking for floating-rate bonds to protect against rising interest rates,” Morningstar analyst Timothy Strauts writes in a report on the ETF. “Most investors’ portfolios are dominated by fixed-rate bonds. The biggest risk that fixed-rate securities face (aside from default) is the potential for rising interest rates. An easy way to minimize this risk is to diversify a bond portfolio by adding exposure to floating-rate securities.”
BKLN has a 30-day SEC yield of 3.94%.
In another sign of the category’s popularity, State Street Global Advisors and Blackstone Group have partnered on the first actively managed senior loan ETF, which launched earlier this month. [Senior Loan ETFs Yielding 6% Face New Actively Managed Rival]
“Suppressed interest rates and central bank asset purchases have seen bank loan ETFs grow in popularity, as investors look for ways to adjust with inflation,” WallachBeth said in a recent note.
FLOT and other floating rate note ETFs are different from the bank loan funds.
The key difference is that floating rate notes are typically investment grade, whereas most bank loans are rated below investment grade, explains Matt Tucker, head of fixed income strategy at iShares.
“Because of this, bank loans have the potential for higher yield, but of course this comes with greater credit and liquidity risk,” Tucker said. Investors often consider floating rate notes when they want to reduce their overall exposure to interest rate risk, but favor investment grade credit risk, he added. [iShares: Floating Rate Note ETF for Rising Rates]
FLOT has a 30-day SEC yield of 0.40%.
Other ETFs in the category include Market Vectors Investment Grade Floating Rate Bond Fund (NYSEArca: FLTR) and SPDR Barclays Capital Investment Grade Floating Rate ETF (NYSEArca: FLRN).
Floating Rate ETF Triples in Size on Rising Rate Fears
April 11th at 9:57am by John Spence
For example, iShares Floating Rate Note ETF (NYSEArca: FLOT) has more than tripled in size since the beginning of the year to $1.4 billion in assets.
On Monday alone, the BlackRock ETF had large inflows reaching nearly $500 million, according to WallachBeth Capital. The floating rate note fund ranks second on the list of best-selling ETFs the past week.
Similarly, PowerShares Senior Loan Portfolio (NYSEArca: BKLN) has been extremely popular so far in 2013 as investors look for bond ETFs that provide protection from rising interest rates.
BKLN has experienced net inflows of $1.7 billion year to date, according to IndexUniverse data, taking total assets to $3.2 billion.
BKLN is designed for investors “who may be looking for floating-rate bonds to protect against rising interest rates,” Morningstar analyst Timothy Strauts writes in a report on the ETF. “Most investors’ portfolios are dominated by fixed-rate bonds. The biggest risk that fixed-rate securities face (aside from default) is the potential for rising interest rates. An easy way to minimize this risk is to diversify a bond portfolio by adding exposure to floating-rate securities.”
BKLN has a 30-day SEC yield of 3.94%.
In another sign of the category’s popularity, State Street Global Advisors and Blackstone Group have partnered on the first actively managed senior loan ETF, which launched earlier this month. [Senior Loan ETFs Yielding 6% Face New Actively Managed Rival]
“Suppressed interest rates and central bank asset purchases have seen bank loan ETFs grow in popularity, as investors look for ways to adjust with inflation,” WallachBeth said in a recent note.
FLOT and other floating rate note ETFs are different from the bank loan funds.
The key difference is that floating rate notes are typically investment grade, whereas most bank loans are rated below investment grade, explains Matt Tucker, head of fixed income strategy at iShares.
“Because of this, bank loans have the potential for higher yield, but of course this comes with greater credit and liquidity risk,” Tucker said. Investors often consider floating rate notes when they want to reduce their overall exposure to interest rate risk, but favor investment grade credit risk, he added. [iShares: Floating Rate Note ETF for Rising Rates]
FLOT has a 30-day SEC yield of 0.40%.
Other ETFs in the category include Market Vectors Investment Grade Floating Rate Bond Fund (NYSEArca: FLTR) and SPDR Barclays Capital Investment Grade Floating Rate ETF (NYSEArca: FLRN).
CNBC Model ETF Retirement Portfolio | ETF Trends
CNBC Model ETF Retirement Portfolio | ETF Trends
In a collaboration with exchange traded fund experts, CNBC has rolled out an all-ETF diversified portfolio for the investor looking to save toward retirement.
“We wanted investors to have some exposure to most asset classes, that would be stocks, bonds, cash, commodities and even real estate, depending upon your age,” Kim Arther, founding partner of Main Management LLC, said on CNBC. “And you can do all of this with ETFs that are liquid, transparent and diversified.”
I am proud to be part of this advisory board put together by CNBC. [CNBC Rolls Out Model ETF Retirement Portfolios]
On Wednesday, Arthur described a suitable portfolio for a 30-year-old investor that leans toward stocks.
Younger investors will want more exposure to stocks since the asset “grows and ages along with you,” CNBC reporter Bob Pisani explained in the interview.
Specifically, the ETF portfolio for an individual who is 30 years old, with more than 30 years until retirement, includes core stock and bond holdings, along with opportunity picks that could pop up.
Equity
Looking at the equities exposure, ECON provides an interesting play on the emerging market consumer sector.
“You have the consumer exploding in the emerging markets,” Arthur explained. “So we want to make sure we own companies that give you direct exposure to those emerging markets.”
Bonds
CNBC’s Model ETF Retirement Portfolio for the 30-Year-Old Investor
April 17th at 5:30pm by Tom Lydon
“We wanted investors to have some exposure to most asset classes, that would be stocks, bonds, cash, commodities and even real estate, depending upon your age,” Kim Arther, founding partner of Main Management LLC, said on CNBC. “And you can do all of this with ETFs that are liquid, transparent and diversified.”
I am proud to be part of this advisory board put together by CNBC. [CNBC Rolls Out Model ETF Retirement Portfolios]
On Wednesday, Arthur described a suitable portfolio for a 30-year-old investor that leans toward stocks.
Younger investors will want more exposure to stocks since the asset “grows and ages along with you,” CNBC reporter Bob Pisani explained in the interview.
Specifically, the ETF portfolio for an individual who is 30 years old, with more than 30 years until retirement, includes core stock and bond holdings, along with opportunity picks that could pop up.
Equity
- SPDR S&P 500 (NYSEArca: SPY) 17.5%
- Schwab U.S. Dividend Equity (NYSEArca: SCHD) 7.5%
- Vanguard Mid Cap (NYSEArca: VO) 5%
- First Trust Health Care AlphaDEX (NYSEArca: FXH) 5%
- Vanguard FTSE All-World ex-US (NYSEArca: VEU) 17.5%
- WisdomTree Emerging Markets Equity Income (NYSEArca: DEM) 5%
- EGShares Emerging Markets Consumer Titans (NYSEArca: ECON) 7.5%
- PowerShares S&P International Low Volatility (NYSEArca: IDLV) 5%
Looking at the equities exposure, ECON provides an interesting play on the emerging market consumer sector.
“You have the consumer exploding in the emerging markets,” Arthur explained. “So we want to make sure we own companies that give you direct exposure to those emerging markets.”
Bonds
- iShares Core Total U.S. Bond Market (NYSEArca: AGG) 2.5%
- WisdomTree Emerging Markets Local Debt (NYSEArca: ELD) 2.5%
CNBC ETF Retirement Portfolio -- Target 30-Year-Old
CNBC ETF Retirement Portfolio -- Target 30-Year-Old
Weighting
| Equity | % | |
| SPY | SPDR S&P 500 | 17.5 |
| SCHD | Schwab U.S. Dividend Equity | 7.5 |
| VO | Vanguard Mid Cap | 5 |
| FXH | First Trust Health Care AlphaDEX | 5 |
| VEU | Vanguard FTSE All-World ex-US | 17.5 |
| DEM | WisdomTree Emerging Markets Equity Income | 5 |
| ECON | EGShares Emerging Markets Consumer Titans | 7.5 |
| IDLV | PowerShares S&P International Low Volatility | 5 |
| Bonds | ||
| AGG | iShares Core Total U.S. Bond Market | 2.5 |
| ELD | WisdomTree Emerging Markets Local Debt | 2.5 |
| Opportunity | ||
| BKLN | PowerShares Senior Loan Portfolio | 5 |
| GDX | Market Vectors Gold Miners | 5 |
| VNQI | Vanguard Global ex-US Real Estate | 5 |
| HYLD | Peritus High Yield | 5 |
| UUP | PowerShares DB US Dollar Index Bullish | 5 |
| Total | 100 |
CNBC ETF Retirement Portfolio -- Target 50-Year-Old
CNBC ETF Retirement Portfolio -- Target 50-Year-Old
Weighting
| Cash | % | |
| GSY | Guggenheim Enhanced Short Duration Bond | 5 |
| Equity | ||
| SPY | SPDR S&P 500 | 12.5 |
| SCHD | Schwab U.S. Dividend Equity | 5 |
| VO | Vanguard Mid Cap | 5 |
| FXH | First Trust Health Care AlphaDEX | 2.5 |
| VEU | Vanguard FTSE All-World ex-US | 12.5 |
| DEM | WisdomTree Emerging Markets Equity Income | 5 |
| ECON | EGShares Emerging Markets Consumer Titans | 2.5 |
| IDLV | PowerShares S&P International Low Volatility | 5 |
| Bonds | ||
| AGG | iShares Core Total U.S. Bond Market | 10 |
| LQD | iShares iBoxx $ Investment Grade Corp Bond | 5 |
| ELD | WisdomTree Emerging Markets Local Debt | 5 |
| Opportunity | ||
| BKLN | PowerShares Senior Loan Portfolio | 5 |
| GDX | Market Vectors Gold Miners | 5 |
| VNQI | Vanguard Global ex-US Real Estate | 5 |
| HYLD | Peritus High Yield | 5 |
| UUP | PowerShares DB US Dollar Index Bullish | 5 |
| Total | 100 |
Wednesday, April 10, 2013
Monday, April 8, 2013
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