HOT-ETF.com

An exchange-traded fund (ETF) is an investment vehicle that trades on stock exchanges, similar to stocks. An ETF can hold assets such as stocks, commodities, or bonds just to mention the most popular. ETFs have been around since the early 1990s.

The most popular ETFs track an index, such as the S&P 500 – SPX. These Funds are investing vehicles that hold dozens, hundreds, or even thousands of companies under one ticker. Although most popular ETFs follow an index the trend is toward increasingly moving towards focused portfolios that target specific sectors and industries. For example: iShares Dow Jones U.S. Telecommunications Sector Index Fund – IVZ, top holdings include AT&T, Verizon, Sprint, Century Link and Sprint-Nextel just to mention a few…

A good example of a foreign ETF would be the iShares MSCI Sweden Index – EWD; top holdings include: H&M, Ericsson, Nordea Bank and Volvo.

Exchange-traded funds have gone mainstream as individual investors and financial advisers alike have embraced the flexibility of low-cost, tax-efficient portfolios.

ETF vs Mutual Funds:

Typically ETFs are cheaper and more tax-friendly than regular mutual funds. The average expense ratio for U.S.-listed ETFs is 0.4%, compared with 1.42% for diversified U.S. stock funds, according to the investment research firm Morningstar. By composition, ETF investors have less exposure to capital gains taxes than mutual fund shareholders. That’s because fund managers frequently buy and sell the fund’s holdings and then pass the high transaction costs to investors. ETFs occasionally shift shares, too, although much less than most mutual funds. Annual expenses for ETFs range between 0.1% and 0.65% and are deducted from dividends. Index mutual funds charge anywhere from 0.1% to more than 3%.

In addition, ETFs give shareholders the ability to trade throughout the day, while funds are priced only once daily, at the market close. Buyers have plenty of investment choices: About 270 ETFs are currently listed on domestic exchanges. This can cause a temptation to trade that you should resist. Studies have shown the typical individual investor has a poor record when it comes to timing the stock market. With ETFs, the temptation to trade may be even greater because they can be bought and sold at any time in the trading day.

How to Buy ETFs?

Minimum investment requirement: For investors with limited funds (say, less than $1,000) who want to get started in the stock market, ETFs offer a cheap entrée. Through your discount brokerage account, you can buy one single measly share if you choose. In comparison, many index mutual funds have high initial balance requirements. (Those with lower requirements often charge higher fees.)

SOCL – Global X Social Media Index ETF @ NASDAQ

SOCL trading volume has increased from its daily average of just 6,000 shares to over 120,000 shares Wednesday and Thursday week ending February 4th. This humble fund of just $3.1 million in assets could rapidly increase after it gets it’s hands on a good slice of Facebook’s upcoming IPO.

Due to trading restrictions the Social Media ETF will have to wait 5 days until it can add Facebook as part of its holdings. SOCL is up 16% for the year.

Issuer: Global X
Expense Ratio: 0.65%
Inception: 2011-11-15

SOCL Top Ten Holdings

1. Gree Inc. (3632): 10.75%
2. Tencent Holdings Ltd. (00700): 10.33%
3. SINA Corporation (SINA): 9.74%
4. NetEase.com, Inc. ADR (NTES): 9.34%
5. DeNA Co., Ltd. (2432): 8.07%
6. Yandex NV (YNDX): 5.32%
7. Google, Inc. (GOOG): 4.94%
8. NEXON Co Ltd (NEXOF): 4.84%
9. LinkedIn Corp (LNKD): 4.57%
10. Mail.ru Group Ltd. GDR (MAIL): 4.46%

EWZ – MSCI Brazil Index Fund: The fund seeks investment results that correspond to the price and yield performance of the MSCI Brazil Index.

Issuer: iShares
Expense Ratio: 0.61%

EWZ is up 13 percent this year, outperforming the iShares MSCI Emerging Markets Index’s 8.2 percent jump and the iShares MSCI Developed Market Index’s 3 percent gain.

Why so hot now?

The Brazilian government suspended the “IOF” levy on foreign stock purchases back in December. “The IOF Tax is no longer an overhang which has dragged EWZ performance for two years,” Rebecca Cheong, an equity derivatives strategist at Societe Generale, said in the report.

With a stable economical and political situation, real middle and consumer class; EWZ is the lowest risk path into a emerging markets investment.

Top Holdings:

• Vale S.A. ADR (VALE): 6.04%
• Petroleo Brasileiro SA Petrobras: 10.34%
• Vale S.A. Pfd Shs -A-: 8.76%
• Itau Unibanco Holding S.A. (ITUB3): 8.08%
• Petroleo Brasileiro SA Petrobras (PETR3): 7.98%
• Banco Bradesco Sa Brad (BBDC4): 6.22%

Dow Jones

• U.S. economy added 243,000 jobs in January, far exceeding expectations (Expected: 130,000).

• Unemployment rate drops to 8.3%, the lowest since February 2009.

• Dow, up more than 5% in 2012, to its highest level since May 2008

• The Nasdaq, up more than 11% for the year, climbed to its highest level since December 2000.

• The S&P 500 has gained almost 7% this year, and finished at a six-month high.

Dollar, Oil & Gold

• The dollar slipped against the euro and the British pound, but rose versus the Japanese yen.

• Oil for March delivery rose $1.48 to settle at $97.84 a barrel.

• Gold futures for April delivery fell $19 to settle at $1,736.80 an ounce.

• Inception: 2011-07-13 by Precidian
• Expense Ratio: 0.50%

Just a couple months ago, Precidian Funds (New Jersey based new ETF player), announced the launch of the first U.S. traded ETF offering exposure to the Nikkei 225 Index: MAXIS Nikkei 225 Index ETF (NKY)

The Nikkei 225 is Japan’s rough equivalent of the large-cap S&P 500, introducing a new competitor to the iShares MSCI Japan Index Fund (EWJ).

Investors are already familiar with the Nikkei Index itself as an indicator of what the Japanese equity markets are doing, as it is constantly featured in the TV media. NKY ETF gives portfolio managers a way to rapidly get exposure to this index.

The Japanese have a long history of successful recovery after disaster strikes. Japan managed to become one of the top world economies after being hit with not one but two atomic bombs. Most analysts agreed that Japan will eventually enjoy a boost from reconstruction, after suffering a temporary economic hit, with household consumption rising to replace damaged homes and goods. Hopes surfaced the disaster could end the debilitating political warfare that has prevented the government from crafting policies to cope with a bulging debt and fast-aging society.

NKY ETF Top Holdings:

• FAST RETAILING CO LTD – 6.39%
• FANUC LTD – 5.80%
• SOFTBANK CORP – 3.44%
• KYOCERA CORP – 3.15%
• HONDA MOTOR CO LTD – 2.11%

A full list of NKY NIKKEI ETF (one of the hottest 2011 ETF’s) top holdings is available at: http://www.precidianfunds.com/2/nky225/holdings.php

Cash In with Chile’s Hot Boosting Economy

Chile is a relatively developed country for Latin America, with a long history of a civic society.

The state owns and operates its own copper mines through CODELCO, the largest copper miner in the world. As its owner, the Chile ensures that much of its mineral wealth remains within the country’s borders and is managed correctly. Chile operates one of the most successful and balanced sovereign wealth funds in the world, which enabled the country to undertake an aggressive stimulus plan in the face of a troubled global economy in 2008.

• Chile enjoys a stable A+ credit rating with S&P.
• Chile boasts the largest GDP growth in South America
• Chile is that it is copper rich
• Because Chile is a commodity-based country, it tends to be at different points in economic and stock market cycles than the U.S.

iShares MSCI Chile Fund (ECH)

+ Description: The index measures the performance of the Chilean equity market.
+ Expense Ratio: 0.61%

ECH Top Holdings

• Empresas COPEC SA (COPEC): 9.55%
• Cencosud SA (CENCOSUD): 8.74%
• Empresa Nacional de Electricidad SA (Chile) (ENDESA): 8.34%
• Soc Quimica Y Minera Chile B Common Stock Npv: 8.15%
• Enersis SA (ENERSIS): 7.78%
• Empresas CMPC SA (CMPC): 6.57%
• S.A.C.I. Falabella (FALABELLA): 5.13%
• Banco Santander Chile (BSANTANDER): 4.91%
• Lan Airlines SA (LAN): 4.37%
• CAP SA (CAP): 4.17%

Why are Pharmaceuticals a HOT investment?

Incivek (telaprevir), a drug for treating hepatitis C virus released by Vertex, generated $494.1 million in sales only in the US between it’s launch in May through the end of September.

Who doesn’t wants a share of that? Now, you can be constantly refreshing the FDA website to find out the latest approved drugs and jump in to buy the stock of the pharmaceutical behind as fast as you can. Only to find out you were beat by those with insider information, and now all you have is an overpriced stock.

Or you can buy in the whole industry with these hot pharmaceutical etf’s!

BigPharma is trading at 10.5 times estimated 2010 earnings, one of its lowest price-earnings ratios in decades and 22% less than the overall market’s P/E. Analysts expect earnings for the industry to rise an average of 10.3% this year. And for the worrysome, even if ObamaCare passes, the impact of the reforms, says Barclays Capital analyst Anthony Butler, should be “limited and manageable.”

Long-term benefits: Pharmaceutical stocks are non-cyclical growth stocks like the pharmaceuticals can grow earnings and dividends through boom and bust – they are the kind of stocks one can put away for a decade and forget. pharma is one of the strongest industries around: it has one of the highest returns on investment capital (35%) and best company survivorship rates.

SPDR S&P Pharmaceuticals ETF (XPH)

• Top holdings include: Salix Pharma Inc (NasdaqGS: SLXP) 4.57%, Bristol Myers Squibb Co. (NYSE: BMY) 4.43%, Questcor Pharma Inc (NasdaqGS: QCOR) 4.31%, Perrigo Co (NasdaqGS: PRGO) 4.24% and Warner Chilcott Plc (NasdaqGS: WCRX) 4.19%.
• Expense ratio of 0.35%.
• This ETF does not hold exposure to services and medical-devices firms found in broader health-care funds.
• Healthcare ETFs Live Up to a defensive strategy reputation

iShares Dow Jones U.S. Pharmaceuticals Index Fund (IHE)

• Top holdings include: JOHNSON & JOHNS 9.56%, PFIZER INC 9.39%, MERCK & CO. INC. 8.03%, ABBOTT LABORATORIES 7.24%.
• Seeks to replicate a benchmark that measures the performance of the pharmaceuticals sector of the U.S. equity market. The fund has about $235 million in assets and an average daily volume around 50,000, giving decent liquidity
• U.S. pharma has responded to the lackluster environment of recent years by cutting costs (while maintaining R&D and balance sheet strength).

U.S. Equity Index Funds

• Dow Jones Select Dividend (DVY)
• Russell 1000 Growth (IWF)
• Russell 1000 (IWB)
• Russell 1000 Value (IWD)
• Russell 2000 Growth (IWO)
• Russell 2000 (IWM)
• Russell 2000 Value (IWN)
• Russell 3000 (IWV)
• S&P 500 Growth (IVW)
• S&P 500 (IVV)
• S&P 500 Value (IVE)
• S&P Mid Cap 400 Growth (IJK)
• S&P Mid Cap 400 (IJH)
• S&P Mid Cap 400 Value (IJJ)
• S&P Small Cap 600 Growth (IJT)
• S&P Small Cap 600 (IJR)
• S&P Small Cap 600 Value (IJS)

International Equity Index Funds

• Dow Jones International Select Dividend (IDV)
• MSCI ACWI (ACWI)
• MSCI ACWI ex US (ACWX)
• MSCI EAFE (EFA)
• MSCI EAFE Small Cap (SCZ)
• MSCI Emerging Markets (EEM)

Fixed Income Funds

• Barclays Aggregate (AGG)
• Barclays TIPS (TIP)
• iBoxx $ Investment Grade Corporate (LQD)
• iBoxx High Yield Corporate Bond (HYG)
• JP Morgan USD Emerging Markets (EMB)
• S&P National AMT-Free Municipal (MUB)

Real Estate Funds

• Dow Jones US Real Estate (IYR)

Bond ETFs

• NEW Schwab U.S. Aggregate Bond ETF™
• Schwab U.S. TIPS ETF™
• Schwab Short-Term U.S. Treasury ETF™
• Schwab Intermediate-Term U.S. Treasury ETF™

Domestic Equity ETFs

• Schwab U.S. Broad Market ETF™
• Schwab U.S. Large-Cap ETF™
• Schwab U.S. Large-Cap Growth ETF™
• Schwab U.S. Large-Cap Value ETF™
• Schwab U.S. Mid-Cap ETF™
• Schwab U.S. Small-Cap ETF™
• Schwab U.S. REIT ETF™

International Equity ETFs

• Schwab International Equity ETF™
• Schwab International Small-Cap Equity™
• Schwab Emerging Markets Equity ETF™

Short-Term Bond

• Short-Term Bond ETF
• Short-Term Corp Bond ETF
• Short-Term Govmt Bond ETF

Intermediate-Term Bond

• Inter-Term Bond ETF
• Inter-Term Corp Bond ETF
• Inter-Term Govmt Bond ETF
• Mortgage-Backed Sec ETF
• Total Bond Market ETF

Long-Term Bond

• Ext Duration Treasury ETF
• Long-Term Bond ETF
• Long-Term Corp Bond ETF
• Long-Term Govmt Bond ETF

Domestic Stock – General

• Dividend Apprec ETF
• Growth ETF
• High Dividend Yield ETF
• Large-Cap ETF
• Mega Cap 300 ETF
• Mega Cap 300 Growth ETF
• Mega Cap 300 Value ETF
• Russell 1000 ETF
• Russell 1000 Growth ETF
• Russell 1000 Value ETF
• Russell 3000 ETF
• S&P 500 ETF
• S&P 500 Growth ETF
• S&P 500 Value ETF
• Total Stock Market ETF
• Value ETF

Domestic Stock – More Aggressive

• Extended Market ETF
• Mid-Cap ETF
• Mid-Cap Growth ETF
• Mid-Cap Value ETF
• Russell 2000 ETF
• Russell 2000 Growth ETF
• Russell 2000 Value ETF
• S&P Mid-Cap 400 ETF
• S&P Mid-Cap 400 Gro ETF
• S&P Mid-Cap 400 Value ETF
• S&P Small-Cap 600 ETF
• S&P Small-Cap 600 Gro ETF
• S&P Small-Cap 600 Val ETF
• Small-Cap ETF
• Small-Cap Growth ETF
• Small-Cap Value ETF

Domestic Stock – Sector-Specific

• Consumer Discret ETF
• Consumer Staples ETF
• Energy ETF
• Financials ETF
• Health Care ETF
• Industrials ETF
• Information Tech ETF
• Materials ETF
• REIT ETF
• Telecommun Serv ETF
• Utilities ETF

International/Global Stock

• FTSE All-World ex-US ETF
• FTSE AW ex-US Sm-Cap ETF
• Global ex-US Real Est ETF
• MSCI EAFE ETF
• MSCI Emerging Markets ETF
• MSCI Europe ETF
• MSCI Pacific ETF
• Total Intl Stock ETF
• Total World Stock ETF

• iShares MSCI All Country Asia ex Japan Index Fund
• iShares MSCI ACWI Index Fund
• iShares Barclays Aggregate Bond Fund
• iShares S&P Aggressive Allocation ETF
• iShares S&P Conservative Allocation ETF
• iShares S&P Moderate Allocation ETF
• iShares S&P Growth Allocation ETF
• Vanguard Intermediate Term Bond ETF
• iShares MSCI BRIC Index Fund
• Vanguard Bond Index Funds
• Vanguard Bond Index Fund*
• Vanguard Short Term Bond ETF
• SPDR Barclays Capital International Treas Bd ETF
• Ishares Barclays Intermediate Credit Bond Fund
• iShares Barclays 1-3 Year Credit Bond Fund
• Powershares DB Commodity Index Tracking Fund
• Powershares DB Oil Fund
• iPath Dow Jones-AIG Commodity Idx TR ETN
• PowerShares DB Commodity Long ETN
• Vanguard World Funds
• Ishares MSCI EAFE Growth Index Fund
• iShares MSCI EAFE Value Index Fund
• WisdomTree India Earnings Fund
• iShares MSCI Australia Index Fund
• Ishares Msci Canada Index
• iShares MSCI Germany
• Ishares Msci Italy Index Fund
• Ishares Msci Japan Index Fund
• iShares MSCI Spain Index Fund
• iShares MSCI France Index Fund
• iShares MSCI UK Index Fund
• SPDR S&P Emerging Markets Small Cap ETF
• Ishares Msci Brazil Index Fund
• SPDR EURO STOXX 50 ETF
• FTSE China 25 Index
• SPDR S&P Emerging Europe ETF
• iShares Barclays Intermediate Govt/Credit Bd Fd
• SPDR S&P China ETF
• iPath Optimized Currency Carry ETN
• iShares Barclays 3-7 Year Treasury Bond Fund
• Ishares Trust S & P Midcap
• iShares S&P SmallCap 600 Index Fund
• iShares S&P SmallCap 600 Value Index Fund
• Ishares S & P Latin America 40
• iShares S&P Global 100 Index Fund
• Market Vectors Intermediate Municipal Index ETF
• iShares S&P 500 Value Index Fund
• iShares S&P 500 Index Fund
• iShares Russell 1000 Index Fund
• iShares Russell Microcap Index Fund
• iShares Russell 1000 Growth Index Fund
• iShares Russell 2000 Value Index Fund
• iShares Russell 2000 Growth Index Fund
• iShares Russell Midcap Growth Index Fund
• iShares Russell Midcap Value Index Fund
• iShares Russell 3000 Index Fund
• Barclays GEMS Index ETN
• SPDR Barclays Capital High Yield Bond ETF
• Ishares Iboxx $ Inv Grade Corporate Bond Fund
• iShares Barclays MBS Bond Fund
• Vanguard Mega Cap 300 Growth Index Fund
• iShares S&P National Municipal Bond
• PowerShares Emerging Markets Sovereign Debt Port
• Market Vectors Russia ETF
• SPDR Dow Jones Global Real Estate ETF
• Dj Wilshire Reit Etf
• SPDR DJ INTERNATIONAL REAL ESTATE ETF
• iShares MSCI EAFE Small Cap Index Fund
• SPDR Nvn Barclys Cptl Shrt Trm Mncpl Bnd
• iShares Barclays 1-3 Year Treasury Bond Fund
• SPDR Lehman Municipal Bond ETF
• iShares Barclays TIPS Bond Fund
• iShares Barclays 20+ Year Treasury Bond Fund
• Vanguard Index Funds
• Vanguard Small Cap Growth ETF
• Vanguard Small Cap Value ETF
• Vanguard Intermediate Term Corporate Bond ETF
• Vanguard Long Term Corporate Bond ETF
• Vanguard Short Term Corporate Bond ETF
• Vanguard MSCI EAFE ETF
• Vanguard FTSE All World ex US Index Investor
• Vanguard Intermediate Term Government Bond ETF
• Vanguard MSCI Europe ETF
• Vanguard Long Term Government Bond ETF
• Vanguard Short Term Government Bond ETF
• Vanguard Dividend Appreciation ETF
• Vanguard Mortgage Backed Securities ETF
• Vanguard REIT ETF
• Vanguard Mid Cap ETF
• Vanguard Mid Cap Value Index Fund
• Vanguard Mid Cap Growth ETF
• Vanguard FTSE All World Ex US Small Cap ETF
• Vanguard Total World Stock Index Fund ETF
• Vanguard Total Stock Market ETF
• Vanguard Value Index Fund
• Vanguard Growth ETF
• Vanguard MSCI Emerging Markets Fund ETF
• Vanguard Extended Market ETF
• Vanguard High Dividend Yield Index Fund
• SPDR DB International Government Inflation-Protected Bond ETF