La vendita allo scoperto per Invesco S&P 500 High Beta ETF dà agli investitori un'idea del grado in cui gli investitori stanno scommettendo sul declino delle azioni di Invesco S&P 500 High Beta ETF. I dati relativi alle vendite allo scoperto vengono aggiornati ogni due settimane.

Invesco S&P 500 High Beta ETF (ARCA:SPHB), Report sulle vendite allo scoperto

Invesco S&P 500 High Beta ETF

PowerShares S&P 500 High Beta Portfolio

Technology

Industrials

Financial Services

Consumer Cyclical

Utilities

Healthcare

Basic Materials

Other

Energy

Real Estate

Consumer Defensive

The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. Strictly in accordance with its guidelines and mandated procedures, S&P DJI selects 100 securities from the S&P 500 Index for inclusion in the underlying index that have the highest sensitivity to market movements, or beta, over the past 12 months as determined by the index provider.

Nvidia Corp.

Super Micro Computer, Inc.

Tesla, Inc.

Monolithic Power Systems Inc

Carnival Corp.

Caesars Entertainment Corp.

Enphase Energy Inc Common Stock

Broadcom Inc

United Rentals Inc.

Advanced Micro Devices Inc.

Micron Technology, Inc.

Intel Corp.

Teradyne Inc

Lam Research Corp. Com New

Kla Corp.

Intel Corp

Palantir Technologies Inc.

Cadence Design Systems Inc.

Microchip Technology Inc.

Vistra Energy Corp.

ETFs

Specialty ETFs

AAPL

AMZN

FBCG

MSFT

NVDA

SPHB

La decisione del tribunale statunitense e i solidi utili di Nvidia potrebbero essere i catalizzatori di una nuova ondata di crescita.

Wall Street pronta al decollo? 3 ETF ad alto potenziale da tenere d&#39;occhio

Business,Man's,Hand,Recommending,Contract,And,Customer's,Hand,Refusing,It

Equities

Large Cap

News

Movers

ALGM

ETEC

First Trust NASDAQ Clean Edge Green Energy Index Fund

QCLN

Rialzo pre-market per il titolo tech dopo la proposta di acquisizione. Analizziamo i dettagli dell&#39;offerta e le possibili implicazioni.

Nuova offerta per Allegro MicroSystems: è ora di cavalcare l&#39;onda?

Wall Street is buzzing this week. A U.S. court decision has put a stop to President Donald Trump from<a href="https://www.benzinga.com/government/regulations/25/05/45667775/trumps-tariff-refund-could-cost-us-10-billion-with-2-month-end-rebalance-impact-on-equities-in-case-of-an-appeal-uncertainty-is-back-front-and-center"> issuing broad tariffs through emergency authority</a>, and the market collectively breathed a sigh of relief. Mix that with NVIDIA Corp.&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) <a href="https://www.benzinga.com/news/earnings/25/05/45657660/nvidia-q1-highlights-china-export-ban-hits-results-but-jensen-huang-says-demand-incredibly-strong">solid earnings</a> and a temporary ceasefire in the U.S.-EU tariff battle, and you have the ideal recipe for a high-beta breakout.
<a href="https://www.benzinga.com/etfs">High-beta ETFs</a>, celebrated for their magnified swings, are perfect for bullish markets such as this one. When sentiment surges among investors, these funds don&#8217;t tread, they run. To explain in numbers, a beta of more than one means the ETF is more volatile than the market in general.
For a trader wanting to catch a ride on this short-term wave of momentum, consider the following three high-beta ETFs that may perform well in the coming week:
<h1 class="wp-block-heading">Invesco S&amp;P 500 High Beta ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPHB#NYSE">SPHB</a>)</h1>
Beta: 1.42 SPHB monitors 100 of the S&amp;P 500&#8217;s highest-beta stocks over the last year. It&#8217;s a handpicked portfolio of the market&#8217;s most volatile performers when the bulls are running.
<ol class="wp-block-list">
<li></li>
</ol>
Sector Exposure: Heavy on tech (42.2%), followed by industrials and consumer discretionary.
Assets Under Management: $379.3 million
Expense Ratio: 0.25%
Why Now: Tech is leading the rebound, especially on Nvidia's AI blowout. The easing of trade tensions adds to the momentum of cyclical sectors.
Also Read: <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/25/05/45679047/nvda-tsla-turbocharge-qqq-surge-toward-best-month-since-2023">NVDA, TSLA Turbocharge QQQ Surge Toward Best Month Since 2023</a>
<h1 class="wp-block-heading">ProShares Ultra S&amp;P 500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SSO#NYSE">SSO</a>)</h1>
Beta: 2.04 For those who want to go big or go home, SSO provides double the S&amp;P 500 daily return. It&#8217;s not for the faint of heart, but it&#8217;s a powerful weapon when momentum is decidedly upward. The strategy is to leverage derivatives to multiply S&amp;P 500 returns by 2x.
<ol start="2" class="wp-block-list">
<li></li>
</ol>
Expense Ratio: 0.89%
Why Now: With tariff concerns on the wane and the AI bubble again in vogue, the S&amp;P 500 may have more to gain. SSO allows traders to amplify that gain.
Warning: This is a trade tool, not a long-term friend. The compounding effect can warp returns over longer holding periods.
<h1 class="wp-block-heading">Fidelity Blue Chip Growth ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/FBCG#BATS">FBCG</a>)</h1>
Beta: 1.31 FBCG leans into growth heavy-hitters, mega-cap tech names that tend to be more volatile but pay off when the market goes risk-on.
<ol start="3" class="wp-block-list">
<li></li>
</ol>
Top Holdings: Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Nvidia, Amazon.com Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>): essentially, &#8220;The Avengers&#8221; of technology.
Expense Ratio: 0.59%
Why Now? With Nvidia&#8217;s AI-driven ramp-up igniting another wave in tech, FBCG is poised to profit. This ETF equates high-beta growth with a quality screen.
As opposed to leveraged plays, FBCG provides a more balanced strategy with a growth tilt, perfect when you&#8217;re optimistic but not fond of whiplash.
<h1 class="wp-block-heading">Bottom Line</h1>
With Trump&#8217;s tariff strategy running into the legal brick wall, Nvidia wowing the Street and transatlantic trade tensions being put on hold, risk appetite is back in play. For investors who want to bet on the rally, these three high-beta ETFs are presenting a trio of flavors of aggressive exposure to an increasingly bullish market.
Just keep in mind: what goes up quickly… can come down just as quickly. It is wise to don your seatbelt and trade safely.
Read Next: 
<ul class="wp-block-list">
<li><a href="https://www.benzinga.com/etfs/specialty-etfs/25/05/45676519/bullion-to-blockchain-why-gen-z-may-never-buy-a-gold-etf">Bullion To Blockchain: Why Gen Z May Never Buy A Gold ETF</a></li>
</ul>
Photo: Shutterstock

3 High Beta ETFs To Consider As Wall Street Welcomes Court Ruling On Tariffs, Tech Rebound

Investors ditched their worries last week, and <a href="https://www.benzinga.com/etfs">some ETFs exploited the increased euphoria</a> full tilt.
ETF Weekly Performance Highlights:
VanEck Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMH#NASDAQ">SMH</a>):
SMH jumped 13% last week, fueled by a spectacular rally in chip stocks. Investor optimism over AI, cloud computing, and tenacious demand for semiconductors fueled the meteoric surge of this ETF.
Virtus LifeSci Biotech Clinical Trials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BBC#NYSE">BBC</a>): BBC rose 7%, with the biotech industry regaining some much-needed mojo. Investors seemed happy to roll the dice on clinical trial breakthroughs, ignoring the industry&#8217;s typical volatility.
Simplify Volt TSLA Revolution ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TESL#NYSE">TESL</a>): TESL surged 31.2% in its strongest week in months. Tesla (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) stock jumped after <a href="https://www.benzinga.com/markets/25/04/44974342/elon-musks-wealth-skyrockets-by-billions-as-tesla-stock-rallies-after-billionaire-ceo-steps-back-from-doge">Elon Musk promised to dial back his time with the government</a> and shift his focus back to the EV behemoth, music to Tesla shareholders&#8217; ears.
Invesco S&amp;P 500 High Beta ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPHB#NYSE">SPHB</a>): SPHB gained 11.5% as risk appetite roared back. High-beta stocks, the market&#8217;s resident drama queens, were once again popular with investors seeking momentum.
iShares Bitcoin Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IBIT#NASDAQ">IBIT</a>): IBIT gained 9.2%, benefiting from Bitcoin&#8217;s recovery and renewed optimism about crypto. Hodl (&#8220;Hold on for dear life&#8221;), it seems, remains a lifestyle choice.
What Happened Last Week
While ETFs led the dance, overall market sentiment also <a href="https://www.benzinga.com/government/regulations/25/04/45022314/wall-street-recovers-dollar-steadies-as-trump-tempers-trade-fight-signals-support-for-powell-this-week-in-markets">received a much-needed dose of adrenaline</a>.
Markets regained their groove as investor anxiety over the U.S.–China trade war eased. The Trump administration signaled the possibility of tariff reductions, and China considered putting some levies on hold, according to reports. Never one to pass up a headline, President Donald Trump assured investors he had no intention of firing Fed Chair Jerome Powell, which eased concerns over central bank autonomy.
The S&amp;P 500 has clawed back almost 80% of its post-April 2 &#8220;Liberation Day&#8221; sell-off. Earlier sell-offs in Treasuries and the dollar also halted, as investors adopted a risk-on sentiment.
But beneath the surface, warning lights continue to flash:
U.S. private sector growth<a href="https://www.benzinga.com/government/regulations/25/04/44952395/us-business-activity-growth-slows-in-april-as-services-suffer-tariff-shock-markets-rally-as-trade-war-cools"> moderated to a 16-month low</a>. Consumer sentiment saw the worst three-month slump since the 1990 recession.
Inflation expectations jumped to levels not seen since &#8220;Eye of the Tiger&#8221; was the chart-topper.
In the stock world, ServiceNow (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOW#NYSE">NOW</a>) posted a 20% weekly gain on robust earnings, and Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) dropped 15% after scaling back its 2025 outlook. Tesla shares, meanwhile, had their largest weekly jump since November following Musk&#8217;s pledge to spend less time with the Department of Government Efficiency (DOGE) and focus more on making electric vehicles.
What&#8217;s Ahead
Action this week will be paramount, with high-profile earnings from Microsoft (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Meta (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), Apple (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), and Amazon (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>). In addition, look for a data dump: the initial peek at Q1 GDP, the Fed&#8217;s favored inflation gauge for March, and the April jobs report.
Markets may have flown high last week, but this week may be an entire different ball game.
Read Now: 
<ul>
<li><a href="https://www.benzinga.com/etfs/new-etfs/25/04/45039498/sec-approves-proshares-xrp-futures-etfs-xrp-price-surges-ahead-of-launch">SEC Approves ProShares XRP Futures ETFs: XRP Price Surges Ahead Of Launch</a></li>
</ul>
Photo: Aksana Mestnaya/Shutterstock

Broad U.S. Equity ETFs

IBIT

TESL

TSLA

ETFs Last Week: Funds Lead The Charge As Markets Stage A Return To Risk-On

When markets are volatile like these days, <a href="https://www.benzinga.com/etfs">high-beta ETFs</a> and high-momentum ETFs provide huge opportunities if you have the stomach for the whipsaws.
Beta gauges a stock&#8217;s sensitivity to market action. A high-beta ETF invests in shares that tend to move more dramatically than the overall market. That is, they tend to perform better in a rally but drop harder in a decline. These funds can be highly useful for the risk-on investor during the rebound phase.
High momentum ETFs focus on stocks recently showing a strong price uptick. The rationale is based on the idea that winners tend to keep winning. These ETFs are best suited for bullish or trending market conditions.
Also Read: <a href="https://www.benzinga.com/25/04/44818473/etf-and-equity-trading-access-goes-live-on-kraken-as-platform-enters-traditional-markets">ETF, Equity Trading Access Goes Live On Kraken As Platform Enters Traditional Markets</a>
Here are some top-performing ETFs worth taking a closer look at:
<ul>
<li>Invesco S&amp;P 500 High Beta ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPHB#NYSE">SPHB</a>): Follows the 100 highest beta stocks in the S&amp;P 500, which makes it one of the most popular funds to use when markets are rebounding.</li>
</ul>
<ul>
<li>iShares MSCI USA Momentum Factor ETF (MTUM): Targets U.S. stocks with high recent returns, picking up on positive trends across industries.</li>
</ul>
<ul>
<li>Invesco Dorsey Wright Momentum ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PDP#NASDAQ">PDP</a>): Applies a relative strength strategy to choose the best performers—a good one for trend-followers who desire market leader exposure.</li>
</ul>
Yet, if you want to play it safe:
<ul>
<li>Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) provides broad market exposure with a long-term growth focus.</li>
</ul>
<ul>
<li>Consumer Staples Select Sector SPDR ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) is a defensive investment, giving stability from businesses whose products are still in demand during all economic times.</li>
</ul>
<h2 class="wp-block-heading">Market Recap: Bounce Or Just A Breather?</h2>
Wall Street continued to be volatile due to <a href="https://www.benzinga.com/topic/tariffs">tariff uncertainty</a>. At last check Monday, the Dow increased 0.78%, the Nasdaq gained 0.64%, and the S&amp;P 500 added 0.79%. Yet all three indexes fluctuated between gains and losses throughout the session—a reflection of the fragile sentiment among investors. All the indexes have inched down by less than 1% by Tuesday afternoon.
President Donald Trump temporarily exempted some tech products from new tariffs and pledged <a href="https://www.benzinga.com/25/04/44798727/auto-stocks-rise-on-trumps-comments-about-supporting-us-car-companies-whats-going-on">to &#8220;help&#8221; automakers</a>, following a recent 25% tariff. This sent shares higher.
Adding to the cheer, the CBOE Volatility Index (VIX), Wall Street&#8217;s gauge of fear, fell 3% as of today, making equities a little more attractive.
Yet, the bigger picture is conflicted. Since the April 2 tariff shock, the major indexes are 4–5% below where they stood. 
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/25/04/44812438/exclusive-argents-new-etfs-arent-chasing-ai-or-meme-stocks-heres-what-theyre-buying-instead">Exclusive: Argent&#8217;s New ETFs Are Not Chasing AI Or Meme Stocks, Here&#8217;s What They&#8217;re Buying Instead</a></li>
</ul>
Image: Shutterstock

PowerShares DWA Technical Leaders Portfolio

ETFs For The Brave: Are These High-Octane Funds Your Best Bet To Ride An Upward Market Swing?

Allegro MicroSystems, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ALGM#NASDAQ">ALGM</a>) shares are trading higher premarket on Thursday after it disclosed receiving a proposal&nbsp;from ON Semiconductor Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ON#NASDAQ">ON</a>) for $35.10 per share, with an implied <a target="_blank" href="https://www.benzinga.com/pressreleases/25/03/b44157898/onsemi-proposes-to-acquire-allegro-microsystems-for-35-10-per-share-in-cash" rel="noreferrer noopener">enterprise value of $6.9 billion</a>.
The all-cash offer reflects a 57% premium over Allegro&#8217;s closing price on February 28, 2025, the last trading day before reports of <a target="_blank" href="https://www.benzinga.com/25/03/44084024/on-semiconductor-moves-to-acquire-allegro-sparking-investor-interest" rel="noreferrer noopener">onsemi&#8217;s acquisition interest surfaced</a>.
Allegro&#8217;s Board, after consulting independent financial and legal advisors, <a target="_blank" href="https://www.benzinga.com/pressreleases/25/03/g44158580/allegro-confirms-receipt-of-unsolicited-proposal-from-onsemi" rel="noreferrer noopener">deemed onsemi&#8217;s proposal inadequate</a>.
Notably, onsemi has repeatedly sought to engage Allegro MicroSystems in discussions over the past six months.
The latest proposal, submitted on February 12, 2025, raised the offer to $35.10 per share, up from an initial $34.50 per share proposal as of September 2, 2024.
Read: <a target="_blank" href="https://www.benzinga.com/media/25/02/43971798/on-semiconductor-focuses-on-ai-chip-growth-to-cut-2400-jobs-to-stay-competitive" rel="noreferrer noopener">ON Semiconductor Focuses On AI Chip Growth, To Cut 2,400 Jobs to Stay Competitive</a>
Hassane El-Khoury, President and Chief Executive Officer of onsemi said, &#8220;The Allegro team has built an impressive leadership position in magnetic sensing and power ICs for the automotive and industrial end-markets.&#8221;
&#8221;Together, Allegro&#8217;s unique product portfolio and onsemi&#8217;s differentiated intelligent power and sensing technologies would create a diversified leader in automotive, industrial and AI data center applications.&#8221;
As of December 31, 2024, ON Semiconductor&nbsp;held <a target="_blank" href="https://www.benzinga.com/25/02/43592322/on-semiconductor-q4-earnings-q4-revenue-drops-15-weak-demand-in-auto-and-industrial-sectors-lower-utilization-hits-margins-ceo-warns-of-continued-challenges-in-2025" rel="noreferrer noopener">$2.99 billion in cash and equivalents</a>.
Investors can gain exposure to ALGM stock via&nbsp;iShares Breakthrough Environmental Solutions ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ETEC#NASDAQ">ETEC</a>) and SPDR S&amp;P Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XSD#NYSE">XSD</a>).
Price Action: ALGM shares are up 9% at $29.19 premarket at the last check Thursday.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/earnings/earnings-misses/25/02/43631471/on-semiconductors-q4-revenues-down-15-as-automotive-industry-hits-massive-speed-bump-7-analysts-cut-forecasts-on-continued-demand-weakness" target="_blank" rel="noreferrer noopener">ON Semiconductor&#8217;s Q4 Revenues Down 15% As Automotive Industry Hits Massive Speed Bump, 7 Analysts Cut Forecasts On Continued Demand 10.Weakness</a></li>
</ul>
Photo via Shutterstock.

Allegro MicroSystems Board Deems ON Semiconductor's $6.9B Offer 'Inadequate'

Low volatility exchange traded funds get plenty of attention. Their high beta counterparts, not so much, but there are some credible options in the high beta ETF space.
One of those funds is the Salt High truBeta US Market ETF (CBOE: SLT).
<h3>What Happened</h3>
SLT, which is almost a year old, tracks the Salt High truBeta&trade; US Market Index. That index targets large- and mid-cap stocks with above-average sensitivity to the SPDR S&amp;P 500 ETF (NYSEARCA: SPY). The index has a true beta estimate of 1.5, meaning it aims to capture to 50 percent more variation than the broader market in the same direction, <a href="https://www.saltfinancial.com/?section=indices&amp;_ga=2.248954439.1974160488.1556151781-1781221656.1556151781">according to the issuer</a>.
&ldquo;Beta is widely familiar to investors in describing the relationship between the risk and return for an asset relative to the overall market,&rdquo; <a href="https://www.saltfinancial.com/wp-content/uploads/2018/11/High_truBeta_Index_Methodology-FINAL-1.pdf">according to Salt Financial</a>. &ldquo;A security with an estimated beta of 1.0 is expected to vary in the same direction and magnitude as the market. A beta of 1.5 would be interpreted to vary 50% more than the overall market; a beta of 0.50 would be expected to vary 50% less, and so on.&rdquo;
<h3>Why It&#39;s Important</h3>
Although the S&amp;P 500 and Nasdaq-100 indexes recently hit record highs, low volatility ETFs have been commanding plenty <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/03/13437219/investors-really-love-low-volatility-etfs-this-year">of headlines this year</a>. That while the high beta SLT is setting a torrid pace. SLT is up 8.44 percent just this month, extending its year-to-date gain to 30.34 percent. SLT is beating the rival Invesco S&amp;P 500 High Beta ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sphb#NYSE">SPHB</a>) by nearly 500 basis points year-to-date.
As of April 23, SLT&#39;s underlying index had 101 components, featuring what has been a rewarding mix of technology and energy stocks. Those two sectors combine for 52 percent of the index&#39;s weight. Financial services and industrial stocks combine for 29.30 percent.
As a high beta benchmark SLT doesn&#39;t feature exposure to all 11 of the GICS sectors. Not surprisingly, consumer staples, real estate and utilities -- hallmarks of low volatility funds --&nbsp;do not reside in SLT&#39;s roster.
<h3>What&#39;s Next</h3>
With stocks continuing to march higher, those bullish on the broad market&#39;s near-term prospects may want to consider SLT as an alternative to momentum strategies. Year-to-date, SLT is beating the MSCI USA Momentum Index by a margin of better than 2-to-1.
Related Links
<a href="https://www.benzinga.com/markets/cannabis/19/04/13583036/the-new-cannabis-etf-is-already-making-additions">New Weed ETF Already Adding Stocks</a>
<a href="https://www.benzinga.com/news/earnings/19/04/13582491/epic-earnings-tests-loom-for-these-leveraged-etfs">Big Moves Could Be Coming For These ETFs</a>

Long Ideas

Trading Ideas

A Gem Among High Beta ETFs

For part of last year, the low volatility trade, particularly as measured by the iShares Edge MSCI Min Vol USA ETF (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) and the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>), was scorching hot.
However, by the end of the year, investors were favoring higher beta, cyclical fare, pushing the S&amp;P 500 to annual gain of 12 percent while SPLV and USMV finished the year with an average gain of 10.4 percent.
Year-to-date, USMV is trading slightly ahead of the S&amp;P while SPLV is trailing the benchmark U.S. equity benchmark by a modest margin, but some signs point to a low volatility resurgence. Maybe.
<h3>Low Volatility Trades</h3>
In a note out Monday, <a href="https://rareviewmacro.com/">Rareview Macro</a> founder Neil Azous pointed out that USMV notched 13 consecutive higher closes. That streak ended Monday when USMV lost just 0.15 percent. Still, it is hard to quibble with the 4.8 percent gained by USMV over the past month, an impressive run in short order for a low volatility ETF.
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/02/9077827/a-new-etf-reduces-junk-bond-volatility">A New ETF Reduces Junk Bond Volatility</a>
For its part, SPLV has notched <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/10/8590026/this-catalyst-could-reinvigorate-low-volatility-etfs">14 higher closes this month</a>, including a string of seven, which was also snapped Monday.
<h3>Low Vol And Equity</h3>
&ldquo;The persistent low volatility has no question in our mind induced further equity buying as leverage and net exposure increases,&rdquo; said Azous. &ldquo;Put another way, the collapse in S&amp;P 500 1-month realized volatility has allowed risk control exposure to move back to their full investment for the first time in years.&rdquo;
Still, investors are not displaying much enthusiasm for some low volatility ETFs. For example, $693.3 million has been yanked from USMV this year while nearly $248.3 million has departed SPLV. Interestingly, nearly $246 million has flowed into the PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>).
USMV allocates 35.5 percent of its weight to healthcare and technology stocks while SPLV devotes 38.5 percent of its weight to utilities and consumer staples names.
It is not all bad news on the flows front for volatility ETFs. For example, the PowerShares S&amp;P 500 High Dividend Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/sphd#NYSE">SPHD</a>) has added $159.1 million in new assets this year.
SPHD&#39;s status as a low volatility dividend fund might imply that it is an exclusively large-cap ETF, but the fund has decent exposure to <a href="http://www.benzinga.com/news/16/06/8085988/mid-caps-like-the-low-volatility-treatment-too">mid-caps, another market segment</a> where low volatility strategies are winning this year. The ETF allocates over 29 percent of its combined weight to mid-cap value and blend stocks.
The ETF devotes over 40 percent of its lineup to utilities and real estate stocks.
Disclosure: Todd Shriber owns shares of SPHD.

Dividends

Markets

SPHD

PowerShares S&P 500 Low Volatility Portfolio

SPLV

USMV

A Dichotomy In This Year's Low Vol Trade

Every year, hundreds of new exchange-traded funds come to market in the United States. While the number of new ETFs debuting in any given year is usually large, the number that ultimately prove successful is far smaller.
Ditto for those ETFs that burst out of the gate and immediately prove successful at gathering investor assets. In the most positive of ways, the Elkhorn Lunt Low Vol/High Beta Tactical ETF (BATS: LVHB) is breaking the rules for many news. After less than a month on the market, the LVHB is now home to nearly $60 million in assets under management, <a href="http://www.elkhorn.com/etf/detail.aspx?ticker=lvhb">according to Elkhorn data</a>.
<h3>The ETF</h3>
&ldquo;LVHB tracks the Lunt Capital U.S. Large Cap Equity Rotation Index, which is based on Lunt Capital&#39;s proprietary risk-adjusted momentum strategy and calculated by S&amp;P,&rdquo; according to a statement issued by Elkhorn.
The Lunt Capital U.S. Large Cap Equity Rotation Index rotates between low-volatility and high-beta stocks in the S&amp;P 500. That is accomplished by the Lunt index being fully invested in the S&amp;P 500 Low Volatility Index, tracked by the PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>), and the S&amp;P 500 High Beta Index. That low volatility index is the underlying benchmark for SPLV, while the <a href="http://www.benzinga.com/node/8586186">high beta index</a> is tracked by the PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>).
SPHB&#39;s benchmark holds the 100 S&amp;P 500 stocks with the &ldquo;highest sensitivity to market movements, or beta, over the past 12 months,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPHB&amp;ticker=SPHB&amp;title=powershares-s-p-500-high-beta-portfolio">according to PowerShares</a>.
<h3>Sometimes, Timing Is What It Takes</h3>
As highlighted by the substantial inflows to LVHB, the new ETF was well-timed, a trait not worn by all new ETFs. LVHB came to market at a time when investors were departing low volatility fare for higher beta stocks and sectors, underscoring the new ETF&#39;s utility to move between those themes. The new Elkhorn ETF debuted and remains allocated to higher beta stocks.
Financial services and energy stocks currently combine for over 64 percent of LVHB&#39;s weight with technology names commanding more than 13 percent.
None of the ETF&#39;s top 10 holdings command more than 1.78 percent of the rookie ETF&#39;s weight. That group includes Freeport-McMoRan Inc (NYSE: <a class="ticker" href="/stock/fcx#NYSE">FCX</a>), Williams Companies Inc (NYSE: <a class="ticker" href="/stock/wmb#NYSE">WMB</a>) and Morgan Stanley (NYSE: <a class="ticker" href="/stock/ms#NYSE">MS</a>).

New ETFs

A New ETF Off To A Blistering Start

As is the case with other investments, knowing exactly when low volatility is going to be in style amounts to an effort aimed at factor timing and can be a tricky endeavor. Likewise, knowing when higher beta stocks will be favored is a taxing endeavor.
<h3>Welcome To The Market, LVHB</h3>
The Elkhorn Lunt Low Vol/High Beta Tactical ETF (BATS: LVHB), which launched Thursday, aims to solve the low volatility/high beta rotation dilemma. As its name implies, LVHB is the latest ETF in the burgeoning lineup of Illinois-based <a href="http://www.elkhorn.com/">Elkhorn Investments</a>.
Elkhorn was founded by Ben Fulton, formerly of PowerShares. While at PowerShares, Fulton was involved in the creation of the PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)), one of the largest low volatility ETFs on the market today. In other words, LVHB&#39;s low volatility and high beta pedigree is second-to-none.
<h3>LVHB's Index And Strategy</h3>
&ldquo;LVHB tracks the Lunt Capital U.S. Large Cap Equity Rotation Index, which is based on Lunt Capital&#39;s proprietary risk-adjusted momentum strategy and calculated by S&amp;P,&rdquo; according to a statement issued by Elkhorn.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8586349/singles-day-shopping-with-this-etf">Singles' Day Shopping With This ETF</a></bzrelatedlink>
The Lunt Capital U.S. Large Cap Equity Rotation Index rotates between low-volatility and high-beta stocks in the S&amp;P 500. That is accomplished by the Lunt index being fully invested in the S&amp;P 500 Low Volatility Index and the S&amp;P 500 High Beta Index. That low volatility index is the underlying benchmark for SPLV while the high beta index is tracked by the PowerShares S&amp;P 500 High Beta Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)).
LVHB came to market allocated to the high beta index as its <a href="http://www.elkhorn.com/etf/detail.aspx?ticker=LVHB">top 10 holdings</a> currently mirror those in SPHB.
Adding to LVHB&#39;s uniqueness is that the ETF came to market with $50 million in assets under management, courtesy of Utah-based registered investment advisory Soltis Investment Advisors. That immediately makes the new Elkhorn fund one of this year&#39;s most successful rookie ETFs.
LVHB, Elkhorn&#39;s sixth ETF, charges 0.49 percent per year, or $49 on a $10,000 investment. The firm&#39;s other ETFs include the Elkhorn S&amp;P 500 Capital Expenditures Portfolio (NASDAQ: <a class="ticker" href="/stock/capx#NASDAQ">CAPX</a>) and the Elkhorn S&amp;P High Quality Preferred ETF (BATS: EPRF).
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CAPX

An Effective New Way To Harness Volatility

For investors focusing on dedicated, equity-based volatility exchange-traded funds, &ldquo;low&rdquo; has been the name of the game this year. However, that trend could be starting to change amid a significant recent influx of new assets to the PowerShares S&amp;P 500 High Beta Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)).
<h3>Index, Holdings</h3>
SPHB, which turned five in May, tracks the S&amp;P 500 High Beta Index. That index is essentially the opposite of SPLV&#39;s underlying index. SPHB&#39;s benchmark holds the 100 S&amp;P 500 stocks with the &ldquo;highest sensitivity to market movements, or beta, over the past 12 months,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPHB&amp;ticker=SPHB&amp;title=powershares-s-p-500-high-beta-portfolio">according to PowerShares</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8566178/this-etf-is-worth-the-price-of-admission">This ETF Is Worth The Price Of Admission</a></bzrelatedlink>
Here&#39;s a fun fact that speaks to the efficacy of the rotation into the high beta trade via SPHB: Over the past three months, the high beta ETF is up 4.1 percent while its low volatility equivalent, the PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)), is down 5.5 percent. The S&amp;P 500 is lower by 1.3 percent over the same period.
<h3>Value</h3>
SPHB has the look of a value ETF with financial services and energy names dominating the ETF, combining for over 61 percent of its weight.
&ldquo;Such sector exposure is positive in light of recent developments. The yield on the 10-year Treasury note has moved higher since the end of the third quarter to 1.8% from 1.6% and the Federal Reserve&rsquo;s minutes indicate a near-term rate hike is likely. Higher bond yields have caused, and could continue to cause, investors to rotate away from income-oriented sectors such as consumer staples and utilities,&rdquo; said <a href="https://www.cfraresearch.com/">CFRA Research </a>in a note out Monday.
SPHB&#39;s third-largest sector weight is 13.7 percent weight to technology. Combine that with the ETF&#39;s financial services and energy exposure, and SPHB&#39;s holdings are well-positioned to deliver solid earnings growth.
&ldquo;Meanwhile, according to Capital IQ consensus estimates for 2017, S&amp;P 500 energy earnings are projected to triple, while financials and technology sectors should each exhibit double-digit growth of about 13 percent,&rdquo; according to CFRA.
The research firm has an Overweight rating on SPHB.
Over the past month, SPHB added nearly $224 million in new assets, according to issuer data, representing a sizable portion of its $444.2 million in assets under management.
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Analyst Color

Analyst Ratings

It Might Be Time For This Type Of Volatility ETF

Regarding volatility exchange-traded funds, it is those of the low volatility variety that are garnering all the attention this year. That includes the ultra-popular PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)).
Amid all the fervor over ETFs like SPLV, lost in that shuffle are high beta equivalents such as the PowerShares S&amp;P 500 High Beta Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)). However, some signs point to investors renewing their attention in the likes of SPHB.
<h3>The Case For SPHB</h3>
Quiet as it has been kept, SPHB is actually outperforming SPLV this year. Year-to-date, the high beta ETF is up 9.7 percent compared to 8.3 percent for SPLV. However, SPLV is, not surprisingly, the better risk-adjusted bet. To this point in the year, SPHB&#39;s annualized volatility works out to over 28 percent compared to less than 12 percent for SPLV, according to <a href="http://www.etfreplay.com/charts.aspx">ETF Replay</a> data.
SPHB, which turned five in May, tracks the S&amp;P 500 High Beta Index. That index is essentially the opposite of SPLV&#39;s underlying index. SPHB&#39;s benchmark holds the 100 S&amp;P 500 stocks with the &ldquo;highest sensitivity to market movements, or beta, over the past 12 months,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPHB&amp;ticker=SPHB&amp;title=powershares-s-p-500-high-beta-portfolio">according to PowerShares</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/09/8464305/fidelity-makes-a-splash-with-6-smart-beta-etfs">Fidelity Makes A Splash With 6 Smart Beta ETFs</a></bzrelatedlink>
What is interesting is that SPHB&#39;s largest sector weight is financial services at almost 34 percent. Interesting because that same sector is also over 18 percent of SPLV&#39;s weight. Combine that with its 28.3 percent weight to energy stocks, and SPHB almost looks like a value ETF because those are usually the two largest sector allocations in traditional value funds.
Technology and consumer discretionary names combine for over 21 percent of SPHB&#39;s weight. Those sectors have scant representation in SPLV.
Data suggest investors are returning to SPHB. Over the past month, the ETF has added nearly $131 million in new assets, a total exceeded by just two other PowerShares ETF over that period, <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">according to issuer data</a>.
Making that recent influx of new money into SPHB all the more impressive is that it represents a significant percentage of the ETF&#39;s current assets under management tally. As of September 16, the ETF had $223.6 million in assets under management.
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Signs Of A Return To A High Beta ETF

Entering Tuesday, the S&amp;P 500, the benchmark U.S. equity index, sports a modest year-to-date loss of 0.12 percent. That would seem to imply it was a boring year for U.S. stocks and exchange-traded funds that track the S&amp;P 500.
However, this year was anything but boring the myriad ETFs that track indexes that are derivatives of the S&amp;P 500. ETF issuers obliged that trend by bringing new S&amp;P 500 off-shoot products to market this year.
&ldquo;Many of the weak stocks in the S&amp;P 500 index were in the energy sector, which was plagued by low commodity prices. Indeed the three worst performers in the index, all part of the energy sector, were down more than 70 percent for the year. According to Howard Silverblatt, senior index analyst with S&amp;P Dow Jones Indices, excluding the energy sector that was down 22 percent from the broader index would have resulted in a 200 basis point improvement in the year to date gains for the S&amp;P 500 index,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Monday.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/12/6076842/finding-dividend-growth-with-financial-services-etfs">Finding Dividend Growth With Financial Services ETFs</a></bzrelatedlink>
<h3>SPXE's Recent Success</h3>
The research firm highlighted the ProShares S&amp;P 500 Ex-Energy ETF (NYSE: <a class="ticker" href="/stock/spxe#NYSE">SPXE</a>) as an option for investors looking to maintain S&amp;P 500 exposure while dodging flailing energy stocks. SPXE, which debuted in September as part of a three-ETF suite of ProShares Ex-Sector ETFs, has slightly outperformed the traditional S&amp;P 500 since coming to market. 
With energy out of the equation, SPXE ratchets up its exposure to technology stocks to the tune of almost 22.5 percent and financial services names to almost 17.9 percent. Those allocations are well in excess of what the traditional S&amp;P 500 devotes to those sectors.
<h3>Others Thrived As Well</h3>
Low volatility ETFs have also thrived this year and that group includes the PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>). SPLV, one of the largest low volatility ETFs, tracks an index comprised of the 100 least volatile S&amp;P 500 stocks as measured on a trailing 12-month basis. 
SPLV is &ldquo;up 4.6 percent, significantly outperforming the 11 percent loss of PowerShares S&amp;P 500 High Beta Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)). SPLV excludes approximately 400 most risky stocks in the broader index, while SPHB excludes a similar number of least risky stocks,&rdquo; said S&amp;P Capital IQ.
Low volatility stocks <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/12/6039678/low-volatility-etfs-could-be-hot-in-2016">could be winners again</a> in 2016 due to divergent global monetary policies. That is exactly what investors are dealing with as the Federal Reserve ebbs closer to its first interest rate hike in nine years, while the Bank of Japan, the European Central Bank and others engage in easy monetary policies.
SPLV&#39;s top holdings include well-known consumer products giants such as Clorox Co (NYSE: <a class="ticker" href="/stock/clx#NYSE">CLX</a>), Procter &amp; Gamble Co (NYSE: <a class="ticker" href="/stock/pg#NYSE">PG</a>) and The Coca-Cola Co (NYSE: <a class="ticker" href="/stock/ko#NYSE">KO</a>).
Image Credit: <a href="https://pixabay.com/en/newspaper-stocks-stock-price-pen-1081412/">Public Domain</a>

Intraday Update

SPXE

A Look At Some Of 2015's Exciting S&P 500 ETFs

If 2015 has been a volatile year for stocks, then low volatility exchange-traded funds have strutted their stuff. While the S&amp;P 500 is up just 1.6 percent year-to-date, the PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)) and the iShares MSCI USA Minimum Volatility ETF (iShares Trust (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>)) are up an average of 3.7 percent.
Investors should expect more of the same next year, and it looks like they are already prepared as highlighted by the more than $3 billion in new assets that have flowed into USMV.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/12/6032088/rapid-growth-for-this-low-beta-etf">Rapid Growth For This Low Beta ETF</a></bzrelatedlink>
<h3>The Appeal</h3>
&ldquo;Investors should brace for larger market fluctuations by choosing low volatility stocks rather than those of companies that are more market sensitive, said Chad Morganlander, portfolio manager at Stifel Nicolaus&rsquo; Washington Crossing Advisors,&rdquo; <a href="http://finance.yahoo.com/news/why-low-volatility-stocks-could-be-your-best-bet-for-2016-200449967.html?l=1#">reported Yahoo Finance</a>.
Morganlander told Yahoo Finance that low volatility stocks outperform their high beta counterparts during times of divergent global monetary policies. That is exactly what investors are dealing with as the Federal Reserve ebbs closer to its first interest rate hike in nine years, while the Bank of Japan, European Central Bank and others engage in easy monetary policies.
<h3>Low Volatility And High Beta</h3>
The theory that low volatility outperforms high beta in such environments has been <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5762061/low-volatility-is-absolutely-crushing-high-beta">highly supported this year</a>.
For example, SPLV is higher by 3 percent on the year, while the PowerShares S&amp;P 500 High Beta Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)) has slumped 11.3 percent.
<h3>Looking Into SPLV</h3>
SPLV holds the 100 S&amp;P 500 members that are the least volatile on a 12-month basis. No stock accounts for more than 1.25 percent of the ETF&#39;s weight. Top 10 holdings include Clorox Co (NYSE: <a class="ticker" href="/stock/clx#NYSE">CLX</a>), The Coca-Cola Co (NYSE: <a class="ticker" href="/stock/ko#NYSE">KO</a>) and Procter &amp; Gamble Co (NYSE: <a class="ticker" href="/stock/pg#NYSE">PG</a>).
 Since inception, SPLV&#39;s underlying index has outpaced the S&amp;P 500 by more than 100 basis points.
<h3>Other Low Volatility ETFs</h3>
The potential leadership of low volatility stocks in 2016 probably will not be limited to the primarily large-cap lineups found in SPLV and USMV. Investors might want to give a nod to low volatility mid- and small-cap ETFs as well.
The PowerShares S&amp;P MidCap Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/xmlv#NYSE">XMLV</a>)), which takes the 80 least volatile stocks on a trailing 12-month basis from the S&amp;P MidCap 400 Index, has enjoyed a banner year. XMLV is up 4.5 percent, while the S&amp;P MidCap 400 Index is down 1.7 percent.
<h3>Critical View Of Low Volatility</h3>
Critics of low volatility ETFs say that long-term investors must endure sub-par returns relative to the traditionally weighted benchmark in exchange for the reduction in volatility.
However, XMLV's underlying index <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5815769/low-volatility-mid-cap-etf-provides-refuge-too">has lagged</a> the S&amp;P MidCap 400 by just 26 basis points since inception, according to PowerShares data.
<h3>Small-Cap Equivalent</h3>
SPLV and XMLV have a small-cap equivalent, the PowerShares S&amp;P SmallCap Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/xslv#NYSE">XSLV</a>)).
 XSLV, which takes the 120 least volatile stocks on a trailing 12-month basis from the S&amp;P SmallCap 600 Index, is up 2.2 percent year-to-date while the S&amp;P SmallCap 600 Index is off 1.1 percent. 
XSLV allocates 54.4 percent of its weight to financial services stocks and 16.2 percent to industrials. Just 12.2 percent of the ETF&#39;s holdings are considered growth stocks. 
Image Credit: <a href="https://upload.wikimedia.org/wikipedia/commons/c/c9/Broad_Street_with_NYSE.JPG">Public Domain</a>

XMLV

XSLV

Low Volatility ETFs Could Be Hot In 2016

It might be heresy to say, even unrealistic to comprehend, particularly in a year in which investors have heard so much about the growth and momentum factors trumping value, but the stark reality is low volatility exchange traded funds are crushing their high beta counterparts.

	Technical analysts and assorted other market experts like to gauge the low volatility vs. high beta match-up with a ratio analysis of the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) and the PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>).

	Year-to-date, SPLV is up 2.4 percent, which on its own is not awe-inspiring, but it looks gorgeous relative to the 5.1 percent lost by SPHB. SPLV&#39;s advantage over its high beta counterpart has accelerated in the current quarter. Since July 1, SPLV is up 3.2 percent while SPHB is lower by 3.8 percent. None of this is a condemnation of SPHB. The ETF was working pretty well earlier this year. Rather, these data points underscore the advantages offered by less volatile fare in the current market environment.

	What is interesting is how SPLV, which just happens to pay a monthly dividend, is arriving at this substantial outperformance of SPHB. Remember the days when naysayers nagged SPLV for being a utilities ETF in disguise? Those days are long gone because utilities are just 2.77 percent of SPLV&#39;s weight. Only two sectors command <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPLV">smaller weights within the ETF</a>.

	In what may be a surprise to some investors, financial services is by far the larges sector weight in SPLV at nearly 36 percent. It is not that utilities have gotten exceptionally volatile. Data suggest that even during the most recent surge in Treasury yields, rate-sensitive utilities were only modestly more volatile than historic averages.

	What has happened is that <a href="http://www.etftrends.com/2015/06/investors-prepare-for-higher-interest-rates/">financial services volatility </a>has waned to the point that nearly 36 of the 100 S&amp;P 500 stocks that comprise SPLV&#39;s portfolio hail from that sector. Interestingly, nearly a third of SPLV&#39;s financial holdings are rate-sensitive real estate investment trusts (REITs), but the ETF balances that out with nearly all of its remaining financial holdings being banks and insurance providers. Those groups are perceived to be <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5730304/forget-deductibles-and-premiums-look-at-insurance-etfs">positively levered to</a>&nbsp;rising interest rates.

	SPHB is not bereft of financial services exposure. The sector is 15.2 percent of the high beta ETF&#39;s weight. SPHB&#39;s largest sector allocation is 18.7 percent to industrials, a group SPLV has a 13.8 percent weight to. Among several, the most obvious sector discrepancy between the two ETFs is SPHB&#39;s 18.6 percent weight to energy stocks compared to zero percent in SPLV.

	It does not take an expert in ratio analysis to determine that at a time when energy is the worst-performing sector in the S&amp;P 500, SPLV&#39;s outperformance of SPHB is being driven as much by what the former does not include as what it does.

Short Ideas

Technicals

Low Volatility Is Absolutely Crushing High Beta

Much has been made about the <a href="http://fabiancm.com/low-volatility-is-always-a-good-thing/">inflow of capital into low volatility</a> ETFs and defensive sectors such as the PowerShares S&amp;P 500 Low Volatility Portfolio (SPLV) and the iShares MSCI U.S. Minimum Volatility ETF (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>). I personally think that these are excellent vehicles for investors who are seeking long-term capital appreciation with minimal price fluctuations. These funds have captured billions of dollars in new assets over the last several years, and their returns have been on par or better than the SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>). Over the last 12 months, SPLV has gained 22.97% and USMV has added 20.70%, while SPY has returned 20.71% through 5/6/13 (with dividends reinvested).

	However, I also want to look at the other side of the coin to determine if there is enough alpha being provided in the &quot;high beta&quot; ETF category to warrant exposure to these funds as well. The biggest name is this space is the PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>). This fund is virtually the polar opposite of SPLV in that it contains 100 stocks from the S&amp;P 500 Index with the highest sensitivity to market movements. The index does a 12 month look back to determine which stocks have the most beta to be included in the ETF. Beta is a measure of relative risk and is the rate of change of a security&#39;s price.

	<img hspace="6" src="http://static.cdn-seekingalpha.com/uploads/2013/5/7/10139881-13679588225841062-David-Fabian.png" vspace="6" />

	As you can imagine the price fluctuations of this fund can get quite volatile, so investors should be mentally prepared to handle the ups and downs. The top three sectors in SPHB are financials (26%), technology (21%), and energy (18%) which generally tend to contain more active and heavily traded stocks.

	Over the last year, SPHB has returned 22.47%, which closely resembles the gains of SPLV, but a comparison of these two ETFs on the chart tells an entirely different story. The price trend in SPHB is much more erratic and tends to go through periods of steep peaks and valleys. SPLV, on the other hand, is more consistent and has fewer fluctuations.

	<img hspace="6" src="http://static.cdn-seekingalpha.com/uploads/2013/5/7/10139881-1367960089075783-David-Fabian.png" vspace="6" />

	I would have expected that given the higher risk profile of investing in SPHB, the end result would have been much better performance than its peers over the last year. <a href="http://fabiancm.com/why-you-should-rethink-your-defensive-game-plan/">The trend towards more defensive sectors</a> such as utilities, healthcare, and consumer staples has clearly been a drag on the cyclical stocks that comprise this ETF.

	Another factor that investors should consider is that SPLV is currently yielding 2.80% and pays dividends monthly, which may be more suitable for an income oriented portfolio. While SPHB only yields 0.83% and distributes income quarterly.

	Over time, I think that SPHB can add alpha to an aggressive stock investors&#39; portfolio in the right market environment. But for now, the rising tide is lifting all ships in the harbor, which is why these ETFs are so correlated in their performance. The ultimate decision to invest in either of these funds should be based on your risk tolerance and comfort with the underlying sector exposure of the companies that comprise the index.

	Disclaimer: David Fabian, Fabian Capital Management, and/or its clients may hold positions in the ETFs and mutual funds mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.

Is High Beta Worth The Risk?

With all due respect to the world of high fashion, low volatility ETFs are the new black. Inflows of $900 million <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3378741/more-low-vol-etfs-your-broker-forgot-to-mention">from the start of 2013 through February 19 affirm that assertion</a>. 

Alone, the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) now has over $4 billion in assets under management. The iShares MSCI USA Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) and the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>) have made their presences felt in the "low vol" ETF arena as well with $1.76 billion and $1.56 in AUM, respectively.

Bottom line: Investors love low volatility ETFs, but what about the high beta equivalents? It is a question worth exploring, particularly if <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/03/3409959/use-this-etf-for-a-high-beta-resurgence">cyclical sectors take on leadership roles and lead the broader market higher</a>.

Investors willing to take on some added beta should consider the following three ETFs, all courtesy of Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares unit.

PowerShares S&amp;P Emerging Markets High Beta Portfolio (NYSE: <a class="ticker" href="/stock/eehb#NYSE">EEHB</a>)
The PowerShares S&amp;P Emerging Markets High Beta Portfolio can be described as the high beta equivalent of the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>). For its part, EELV got off to a slow start following its January 2012, but has since surpassed the much ballyhooed $100 million in AUM total. The fact that EELV has returned almost 17 percent since inception certainly helps.

EEHB is still a small ETF ($2.3 million in AUM). Part of the reason for that is because as a high beta fund, it can be said that EEHB needs a sanguine environment for emerging markets equities in which to thrive. On a related note, the ETF's country lineup is arguably surprising. An almost 25 percent allocation to China is not unexpected, but South Korea and Taiwan combine for nearly 30 percent of EEHB's weight and those are two markets that are viewed as "lower beta" in the emerging world.

Additionally, EEHB's allocations to Russia (5.5 percent) and India (3.8 percent) are not that large and those are two higher beta emerging markets. There are some things to like with EEHB. An expense ratio of 0.29 percent is decent among emerging markets ETFs. The fund currently has a P/E ratio of 13.75 and a price-to-book ratio of just 0.59, <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=EEHB">according to PowerShares data</a>, implying it trades at favorable valuations relative to other diversified emerging markets ETFs.

PowerShares S&amp;P International Developed High Beta Portfolio (NYSE: <a class="ticker" href="/stock/idhb#NYSE">IDHB</a>)
Like EEHB, the PowerShares S&amp;P International Developed High Beta Portfolio has a low volatility cousin in the form of the PowerShares S&amp;P International Developed Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/idlv#NYSE">IDLV</a>). IDHB is the newer of the two, having debuted a month after its low volatility counterpart. And like EELV, IDHB has trailed its low volatility equivalent in terms of attracting assets (IDHB has about 20 percent of the assets IDLV has).

And like EEHB, IDHB surprises at the country level. As high beta developed market play, IDHB could lead investors to think the ETF is heavy on risky markets such as Italy and Spain. In reality, that is not the case.

In fact, IDHB merits consideration because its exposure to some of Europe's higher quality markets is significant. For example, Sweden is the ETF's largest country weight at nearly 15 percent. Germany is third at over 10 percent. Finland, Norway and Canada, all of which have AAA credit ratings, combine for over 16 percent of IDHB's weight. IDHB has a 30-day SEC yield of 2.54 percent and an annual expense ratio of 0.25 percent, which is favorable for an international ETF.

PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)
As was recently noted, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/03/3409959/use-this-etf-for-a-high-beta-resurgence">SPHB is the high beta equivalent of SPLV</a>. Given SPLV's success, comparisons here are hard, but it should be noted SPHB has done pretty well for itself with almost $264 million in AUM.

As SPLV takes the 100 S&amp;P 500 members with lowest trailing-12 month betas, SPHB takes the 100 highest beta names over the same time frame. To that end, it is not surprising that financials account for almost 25.5 percent of the ETF's weight and four financial services stocks are found among SPHB's top-10 holdings. 

Technology is the next largest sector weight at 20.7 percent. SPHB is not excessively levered to any of its holdings as 1.64 percent is the largest weight granted to any of the fund's constituents. Year-to-date, SPHB has impressed with a gain of 10.5 percent, clearly benefiting from U.S. stocks continuing to hover near all-time highs. 

Beyond that, SPHB, which charges 0.25 percent per year, offers investors a way of getting mid-cap exposure with high beta twist because mid-cap value and growth names represent over 60 percent of the ETF's weight.

For more on volatility ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/03/3409959/use-this-etf-for-a-high-beta-resurgence">here</a>.

Emerging Market ETFs

EEHB

EELV

EEMV

IDHB

IDLV

3 High Beta ETFs Your Broker Forgot to Mention

When it comes to volatility ETFs, meaning those funds that specifically track high or low volatility equities, so called "low vol" funds have been the dominant members of this space. Investors have clearly embraced the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>). Nearly $4 billion in assets under management indicates as much. 

Other low volatility ETFs have flourished as well. Earlier this year, iShares said its four-ETF suite of low volatility funds crossed $4 billion in combined AUM. iShares, the world's largest ETF sponsor, also noted that through February 19, low volatility ETFs <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3378741/more-low-vol-etfs-your-broker-forgot-to-mention">attracted $900 million in assets since the start of the year</a>.

Statistics like that might be enough to make investors what is going on with high volatility ETFs or if such products even exist. Indeed, there are a few "high vol" ETFs on the market today and with cyclical sectors such as energy and financial services continue moving to the upside, high volatility ETFs will reward investors. Now could be the time to consider high vol fare.

"Historically, the Consumer Discretionary, Materials, Energy, Financials and Industrials sectors outperformed the S&amp;P 500 in March over this period and four of the five (not Financials) continued this success in April. In the initial days of March, through March 8, this has held true to form with the Consumer Discretionary, Financials and Materials sectors leading the more defensive Consumer Staples and Utilities sectors," S&amp;P Capital IQ said in a new research note.

As a way of playing a continued high volatility resurgence, S&amp;P Capital IQ recommends the PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>), which the firm rates Overweight. SPHB debuted on the same day in May 2011 as SPLV did and to say the former has been overshadowed by the latter is accurate. However, SPHB cannot be characterized has small or illiquid.

The ETF has nearly $265 million in AUM and through 250 trading days last year, SPHB never traded at premium or discount to its net asset value of even 50 basis points, <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=SPHB">according to PowerShares data</a>. 

As investors would expect a low volatility ETF to be heavy on low-beta sectors such as consumer staples and utilities, SPHB is heavy on higher beta fare. Financials account for 25.6 percent of the ETF's weight while technology names chime in at 20.6 percent. The energy and materials sectors combine for over 28 percent.

"Despite SPHB's short history, we think the ETF offers a diversified way to gain exposure to some of the cyclical sectors. The ETF shows a number of favorable characteristics across our proprietary performance, risk and cost factor analysis," said S&amp;P Capital IQ. 

The research firm notes that it ranks five of SPHB's top-10 holdings Buy. Those names are Genworth Financial (NYSE: <a class="ticker" href="/stock/gnw#NYSE">GNW</a>), Morgan Stanley (NYSE: <a class="ticker" href="/stock/ms#NYSE">MS</a>), Helmerich &amp; Payne (NYSEL: HP), Masco (NYSE: <a class="ticker" href="/stock/mas#NYSE">MAS</a>) and Nabors Industries (NYSE: <a class="ticker" href="/stock/nbr#NYSE">NBR</a>). 

S&amp;P Capital IQ said it views Mogan Stanley and Nabors as undervalued. The firm also said two other SPHB top-10 holdings – Allegheny Technologies (NYSE: <a class="ticker" href="/stock/ati#NYSE">ATI</a>) and E-Trade (NASDAQ: <a class="ticker" href="/stock/etfc#NASDAQ">ETFC</a>) are undervalued as well.

Given its tilt away from dividend sectors such as staples and telecommunications, SPHB has a 30-day SEC yield of just 0.77 percent. However, the fund's expense ratio is favorable at just 0.25 percent per year. SPHB has outperformed the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) by about 80 basis points year-to-date.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

After-Hours Center

ETFC

Use This ETF For a High-Beta Resurgence

The Large Cap Blend style ranks first out of the twelve fund styles as detailed in my <a href="http://blog.newconstructs.com/2012/10/11/investment-style-rankings-for-etfs-mutual-funds/">style rankings for ETFs and mutual funds</a>. It gets my Neutral rating, which is based on aggregation of ratings of 39 ETFs and 1,046 mutual funds in the Large Cap Blend style as of October 12, 2012. Prior reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

	Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the style. Not all Large Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 990), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst, which allocate too much value to Neutral-or-worse-rated stocks.

	To <a href="http://blog.newconstructs.com/2012/10/09/how-to-find-the-best-etfs-2/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/04/05/how-to-avoid-the-worst-etfs/">avoid the worst</a> ETFs and mutual funds within the Large Cap Blend style, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

	Investors seeking exposure to the Large Cap Blend style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.

	Get my ratings on all ETFs and mutual funds in this style on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8cc7de114e11e1b62800188b533b34">mutual fund and ETF screener</a>.
<div>

		Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 5

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig1.jpg"><img alt="" class="aligncenter size-full wp-image-4799" height="246" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig1.jpg" title="LargeCapValueFig1" width="320" /></a>*

		Best ETFs exclude ETFs with NAV&rsquo;s less than $100 million.

		Sources: New Constructs, LLC and company filings
</div>

	Russell Growth at a Reasonable Price ETF (NYSE: <a class="ticker" href="/stock/grpc#NYSE">GRPC</a>) and ProShares UltraPro Dow30 (NYSE: <a class="ticker" href="/stock/udow#NYSE">UDOW</a>) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.

	Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
<div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig2.jpg"><img alt="" class="aligncenter size-full wp-image-4798" height="246" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig2.jpg" title="LargeCapValueFig2" width="320" /></a>

		* Best mutual funds exclude funds with NAV&rsquo;s less than 100 million.

		Sources: New Constructs, LLC and company filings
</div>

	PowerShares S&amp;P 500 High Quality Portfolio (NYSE: <a class="ticker" href="/stock/sphq#NYSE">SPHQ</a>) is my top-rated Large Cap Blend ETF and GMO Trust: GMO Quality Fund (NYSE: <a class="ticker" href="/stock/gqlox#NYSE">GQLOX</a>) is my top-rated Large Cap Blend mutual fund. Both earn an Attractive-or-better rating.

	PowerShares S&amp;P High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>) is my worst-rated Large Cap Blend ETF and ProFund: Bull ProFund (NYSE: BLPSX) is my worst-rated Large Cap Blend mutual fund. Both earn my Dangerous rating.

	Figure 3 shows that 448 out of the 1,599 stocks (over 51% of the total net assets) held by Large Cap Blend ETFs and mutual funds get an Attractive-or-better rating. However, only 2 out of 39 Large Cap Blend ETFs (less than 1% of total net assets) and 65 out of 1,046 Large Cap Blend mutual funds (less than 11% of total net assets) get an Attractive-or-better rating.

	The takeaways are: you cannot simply judge an ETF or a mutual fund by a style label or its top five holdings. ETFs and mutual funds with the same style label can have drastically different holdings that will translate into significantly different returns for your investment portfolio.
<div>

		Figure 3: Large Cap Blend Style Landscape For ETFs, Mutual Funds &amp; Stocks
</div>
<div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4795" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig3.jpg" title="LargeCapValueFig3" width="410" /></a>

		Sources: New Constructs, LLC and company filings
</div>

	As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/07/20/low-cost-funds-dupe-investors-2/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

	Investors need to tread carefully when considering Large Cap Blend ETFs and mutual funds, as only 2 ETFs and 65 mutual funds in the Large Cap Blend style allocate enough value to Attractive-or-better-rated stocks to earn an Attractive rating. For example, here are two very different stocks that are both held by our worst mutual fund, ProFund: Bull ProFund (NYSE: BLPSX).

	McDonald&rsquo;s (NYSE: <a class="ticker" href="/stock/mcd#NYSE">MCD</a>) is one of my favorite stocks held by Large Cap Blend ETFs and mutual funds and earns my Very Attractive rating. MCD is a model of effective capital management with a return on invested capital (ROIC) of 16.7% in 2011. This is in the 87th percentile of all Russell 3000 companies as McDonald&rsquo;s has improved its ROIC every year for the past decade. In spite of the recession, McDonald&rsquo;s has become even more profitable and efficient with their capital in the last four years. McDonald&rsquo;s is not only a great company; it is also an attractive stock due to the market&rsquo;s pessimistic view of future cash flows. The company&rsquo;s current stock price (~$92.36) implies that after-tax profits (NOPAT) will permanently decrease by 10%. This seems unlikely given that the company has increased its profits by an average of 11% over the past decade. Low expectations and strong historical performance make McDonald&rsquo;s an excellent long candidate.

	Simon Property Group (NYSE: <a class="ticker" href="/stock/spg#NYSE">SPG</a>) is one of my least favorite stocks held by Large Cap Blend ETFs and mutual funds and earns my Very Dangerous rating. SPG has misleading earnings &ndash; its economic earnings are negative and declining while its reports accounting earnings are positive and increasing. During the 14 years in my model, the company has never generated positive economic earnings. Not only is SPG not profitable, it is also overvalued. To justify its current stock price (~$153.05), the company must increase profits by 12.3% compounded annually for 20 years. That is a lot of future value creation for a company that has never created value. Investors should avoid this stock.

	BLPSX holds shares in over 400 companies. Investors would be better off allocating their money to a stock like MCD and avoiding SPG altogether rather than naively diversifying across many stocks.

	Figures 4 and 5 show the rating landscape of all Large Cap Blend ETFs and mutual funds.

	Our <a href="http://blog.newconstructs.com/2012/10/11/investment-style-rankings-for-etfs-mutual-funds/">style rankings for ETFs and mutual funds</a> report ranks all styles and highlights those that offer the best investments.
<div>

		Figure 4: Separating the Best ETFs From the Worst Funds
</div>
<div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4794" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig4.jpg" title="LargeCapValueFig4" width="409" /></a>

		Sources: New Constructs, LLC and company filings
</div>
<div>

		Figure 5: Separating the Best Mutual Funds From the Worst Funds
</div>
<div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4793" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/LargeCapValueFig5.jpg" title="LargeCapValueFig5" width="409" /></a>

		Sources: New Constructs, LLC and company filings
</div>

	Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8cc7de114e11e1b62800188b533b34">full list</a> of ratings and rankings along with reports on all 39 ETFs and 1,046 mutual funds in the Large Cap Blend style.

	Disclosure: I receive no compensation to write about any specific stock, sector, style or&nbsp;theme.

Sector ETFs

GQLOX

GRPC

SPHQ

UDOW

Best & Worst ETFs and Mutual Funds: Large Cap Blend Style

Since March 2011, the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) has become the benchmark against which all other volatility ETFs are measured. With $2.44 billion in assets under management, SPLV stands not only as one of the most successful ETFs to debut last year, but as a <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2804052/beyond-splv-low-volatilityWhat%20About%20High%20Beta/Volatility%20ETFs?-etfs-to-survive-a-wild-market">testament to the soaring popularity of these products</a>.

Other low volatility ETFs have thrived as well. For example, the iShares MSCI USA Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) is just 11 months old and already has almost $368 million in AUM. The iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) is also 11 months old and has $398 million in AUM.

What about the counterparts to low volatility ETFs? Those being high volatility funds. The story with those products is remarkably different. Illustrating the struggles of high volatility and high beta ETFs is the fact that <a href="http://www.benzinga.com/news/12/08/2843261/russell-to-liquidate-all-but-one-of-its-etfs">some of these funds have already disappeared</a>.

Acknowledging that beta and volatility are two different things, here is a look at which ETFs that emphasize beta and volatility might thrive in QE3-induced risk on environment:

PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)

SPHB is the high beta answer to SPLV and this product done an admirable job of attracting assets with $113.5 million since its May 2011 debut. SPHB, which rebalances quarterly, is home to 99 S&amp;P 500 stocks that have shown the highest beta over the past 12 months.

Given the emphasis on high beta, SPHB's sector weights will not surprise anyone with financials coming in at 34.6 percent and energy receiving an allocation of 23.6 percent. No stock receives an allocation above 1.57 percent. SPHB has a fair expense ratio at 0.25 percent, but it also has a problem. It has trailed the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) by 130 basis points this year. On the flip side, as risk appetite has increased over the past month, SPHB has offered double the returns of SPY.

PowerShares S&amp;P Emerging Markets High Beta Portfolio (NYSE: <a class="ticker" href="/stock/eehb#NYSE">EEHB</a>)

Consider EEHB the high beta answer to EEMV and the emerging markets equivalent of SPHB. EEHB, which debuted in February, is arguably a case study in how investors view emerging markets. That is to say developing nations and the corresponding ETFs are already perceived to posses higher betas and volatility, so it may not be attractive to some to take on even more beta. Assuming that assessment is partially correct, it might be part of the reason why EEHB has only $2.2 million in AUM.

EEHB's high beta ways are somewhat deceiving because the fund allocates 32.2 percent of its weight to South Korea, a market that probably should be considered developed instead of emerging. Another 12.3 percent goes to Hong Kong and Taiwan. A frontier markets ETF this is not.

It is EEHB's high weights to financials, industrials and materials names that have plagued the fund since inception. That said, being fair is essential, and it must be noted EEHB is up 5.4 percent in the past month compared to a 3.5 percent gain for the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>).

PowerShares S&amp;P International Developed High Beta Portfolio (NYSE: <a class="ticker" href="/stock/idhb#NYSE">IDHB</a>)

IDHB also debuted in February and like its emerging markets counterpart, EEHB, has also struggled to accumulate assets. Today, IDBH has just $2.3 million in AUM. Presumably, a large part of the reason for IDHB's AUM struggles is that global investors know that the U.S. has been the sturdiest developed market bet this year. 

Aside from a scant allocation to Canada, IDHB focuses on Europe and that means higher volatility than one would get with SPY. France and Germany combine for over 21 percent of IDHB's weight, but that is more that Eurozone exposure is more than canceled out by a combined 25 percent allocation to Sweden and Norway. 

IDHB's exposure to <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2839102/as-europe-etfs-rebound-nordic-plays-flex-their-muscles">steady Nordic economies gives the ETF an under-appreciated feel</a>. What cannot be glossed over is the fact that IDHB has surged 24.6 percent in the past three months. A 3.77 percent distribution yield and 0.25 percent expense ratio are not too shabby, either.

For more on volatility ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2805967/the-definitive-guide-to-low-volatility-etfs">here</a>.

Global

Pre-Market Outlook

What About High Beta/Volatility ETFs?

<div class="entry-content">

		The large-cap blend style ranks second out of the twelve fund styles as detailed in my <a href="http://blog.newconstructs.com/2012/07/16/roadmap-to-the-best-worst-etf-mutual-fund-styles/">style roadmap</a>. It gets my Neutral rating, which is based on aggregation of ratings of 40 ETFs and 1127 mutual funds in the large-cap blend style as of July 17, 2012. Reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

		Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all large-cap blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 16 to 1324), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst, which allocate too much value to Neutral-or-worse-rated stocks.

		To <a href="http://blog.newconstructs.com/2012/04/03/how-to-find-the-best-etfs/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/04/05/how-to-avoid-the-worst-etfs/">avoid the worst</a> ETFs and mutual funds within the large-cap blend style, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

		Investors seeking exposure to the large-cap blend style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.

		See ratings and reports on all ETFs and mutual funds in this style on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8cc7de114e11e1b62800188b533b34">mutual fund and ETF screener</a>.
<div>

			Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend1.jpg"><img alt="" class="aligncenter size-full wp-image-4290" height="235" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend1.jpg" title="LargeCapBlend1" width="329" /></a>

		* Best ETFs exclude ETFs with less NAV&rsquo;s less than 100 million.
<div>

			Sources: New Constructs, LLC and company filings
</div>

		Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
<div>
		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend2.jpg"><img alt="" class="aligncenter size-full wp-image-4289" height="235" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend2.jpg" title="LargeCapBlend2" width="329" /></a></div>
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		* Best mutual funds exclude funds with NAV&rsquo;s less than 100 million.</div>
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			Sources: New Constructs, LLC and company filings
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		PowerShares S&amp;P 500 High Quality Portfolio (NYSE: SPHQ) is my top-rated large-cap blend ETF and earns my Attractice rating. GMO Trust: GMO Quality Fund (NYSE: <a class="ticker" href="/stock/gqlox#NYSE">GQLOX</a>) is my top-rated large-cap blend mutual fund and earns my Very Attractive rating.

		PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>) is my worst-rated large-cap blend ETF and earns my Dangerous rating. Dunham Funds: Dunham Loss Averse Equity Income Fund (NYSE: DAAVX) is my worst-rated large-cap blend mutual fund and earns my Very Dangerous rating.

		Figure 3 shows that 456 out of the 1718 stocks (over 51% of the total net assets) held by large-cap blend ETFs and mutual funds get an Attractive-or-better rating. However, only two out of 40 large-cap blend ETFs (less than 1% of total net assets) and 71 out of 1127 large-cap blend mutual funds (less than 8% of total net assets) get an Attractive-or-better rating.

		The takeaway is: mutual fund managers allocate too much capital to low-quality stocks and large-cap blend ETFs hold poor quality stocks.
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			Figure 3: Large-cap Blend Style Landscape For ETFs, Mutual Funds &amp; Stocks
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			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend3.jpg"><img alt="" class="aligncenter size-full wp-image-4288" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend3.jpg" title="LargeCapBlend3" width="410" /></a>

			Sources: New Constructs, LLC and company filings
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		As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/05/09/low-cost-funds-dupe-investors/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

		Investors need to tread carefully when considering large-cap blend ETFs and mutual funds, as 96% of ETFs and 93% of mutual funds in the large-cap blend style are not worth buying. Only two ETFs and 71 mutual funds in the large-cap blend style allocate enough value to Attractive-or-better-rated stocks to earn an Attractive-or-better rating.

		Wal-Mart Stores, Inc. (NYSE: <a class="ticker" href="/stock/wmt#NYSE">WMT</a>) is one of my favorite stocks held by large-cap blend ETFs and mutual funds and earns my Attractive rating. In today&rsquo;s trying economic times, shoppers are trying to stretch their dollars further, and retailers like WMT are positioned to take full advantage. Over the past 10 years WMT has consistently had an <a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/">economic earnings</a> margin over 5%, something less than 5% of companies have achieved. Meanwhile, WMT&rsquo;s current stock price implies that cash flows will permanently decline by 10%, something that seems unlikely given WMT&rsquo;s historical performance.

		Funds that overweight stocks like WMT have a good chance of earning an Attractive-or-better rating.

		Bank of America Corp (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) is one of my least favorite stocks held by large-cap blend ETFs and mutual funds and earns my Very Dangerous rating. Investors who are not doing the due diligence required to uncover BAC&rsquo;s true <a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/">economic earnings</a> are being led astray by unreliable accounting accounting results. My March 5th, 2012 article provides more details on why I recommend Investors <a href="http://blog.newconstructs.com/2012/03/05/dont-catch-the-dead-cat-bounce-sell-bac/">avoid BAC</a>.

		Figures 4 and 5 show the rating landscape of all large-cap blend ETFs and mutual funds.

		Our <a href="http://blog.newconstructs.com/2012/07/16/roadmap-to-the-best-worst-etf-mutual-fund-styles/">style roadmap</a> report ranks all styles and highlights those that offer the best investments.
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			Figure 4: Separating the Best ETFs From the Worst Funds
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			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend4.jpg"><img alt="" class="aligncenter size-full wp-image-4287" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend4.jpg" title="LargeCapBlend4" width="409" /></a>

			Sources: New Constructs, LLC and company filings
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			Figure 5: Separating the Best Mutual Funds From the Worst Funds
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			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend5.jpg"><img alt="" class="aligncenter size-full wp-image-4286" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/LargeCapBlend5.jpg" title="LargeCapBlend5" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8cc7de114e11e1b62800188b533b34">full list</a> of ratings and rankings along with free reports on all 40 ETFs and 1127 mutual funds in the large-cap blend style.

		Disclosure: I own WMT.&nbsp; I receive no compensation to write about any specific stock, sector, style or&nbsp;theme.
</div>

Best & Worst ETFs and funds Large-Cap Blend

Best & Worst ETFs and Mutual Funds: Large-cap Blend Style

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