Three High Yield Corporate Bond ETFs For 2012

As confidence in a sustainable economic recovery continues to remain wary, unemployment remains high, the equity markets remain volatile and consumer demand grows at a snail’s pace, high yield corporate bonds, and the exchange traded funds that track them, could pose an opportunity for investors. 

One of the biggest reasons that these bond ETFs have appeal is the widening spread between the yields they offer as compared to those offered by US Treasuries.   Some of these high-yield instruments offer 12-month yields greater than 7% as compared to a mere 0.11% offered on a 12-month Treasury note.  Read more of this post

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5 ETFs To Play Rising Prices

As the US government has resorted to excessive spending measures to keep the economy from completely crumbling, many investors suggest that inflation is inevitable and is likely to prevail in the near term future.

Current economic data suggest that inflation is relatively tame, but prices are on the rise.  In April, the Consumer Price Index, also known as the CPI, rose by 3.2 percent from a year earlier marking the fourth straight month of rising prices.  Furthermore, these increases in prices had already emerged in the retail sector as rising prices of cotton, wheat, sugar, crude oil and other raw materials have forced companies like Starbucks (SBUX), McDonalds (MCD) and Levi Strauss to raise prices and pass the impact through to the consumer.   Read more of this post

Two New ETFs For European Bond Markets

Despite the economic uncertainty that continues to prevail in Europe, New York-based ETF provider, Van Eck Global, recently filed plans to launch two new ETFs that will enable investors to play the European bond markets.

According to the filings with the Securities and Exchange Commission, the first fund is expected to be the Market Vectors Sovereign Bond ETF which is expected to be designed to track the performance of local currency-denominated bonds of sovereign issuers located in Europe, excluding Russia.  Furthermore, bonds eligible for inclusion in the Index must be issued by European country governments, sovereigns, quasi-sovereigns or government-backed entities and must be rated “Baa3” or above by Moody’s or “BB-” or above by S&P or Fitch for long-term debt obligations and equivalent ratings for short-term debt obligations. Read more of this post

Seven ETFs To Fight Inflation

Although current US economic data indicates that inflation is relatively subdued, there are numerous reasons to suggest that rising prices are on the horizon.

Rising commodity prices have already prevailed as demand for corn, wheat and soybeans around the world continues to outpace supply and political unrest has sent the price of WTI crude oil north of $109 per barrel.  Furthermore, inflation has already prevailed in much of the developing world causing the People’s Bank of China to increase its benchmark one-year lending rate to 6.31 percent and its one-year deposit rate to 3.25 percent.  A similar tune was heard in India, when its central bank raised the cost of borrowing for the eighth time in nearly one year.  Read more of this post

Three ETFs To Play Emerging Market Debt

As developing nations continue to draw investor attention, opportunities in developing market debt may present a viable opportunity.

To not much surprise, many have been turning to developing nations mainly due to their aggregate, or combined, size and expected exponential growth compared to the United States in the near future.   In fact, a recent study indicates that 97% of the world’s population, 75% of its economic production and nearly 67% of stock market capitalization is outside of the United States. Read more of this post

5 ETFs To Hedge Against Inflation

As the US government has resorted to excessive spending measures to keep the economy from completely crumbling, many investors suggest that inflation is inevitable and could even prevail in the coming months. 

Current economic data suggest that inflation is running lower than expected; however there are numerous reasons to think that inflation will eventually be inevitable.  Some of these reasons include the Federal Reserve’s implementation of QE2, which launched in early November, the increases in money supply in the earlier stages of the Great Recession to ignite a spark in the US economy and rising commodity prices are likely to take their toll on the consumer price index (CPI).  In fact, rising prices have already started to emerge, evident through the recent rise in energy prices (i.e. crude oil and gasoline), food prices (i.e. wheat, sugar, coffee and soybeans) and airline tickets.  Read more of this post

9 ETFs To Play Currency Debasement

As developing nations continue to implement loose monetary policies, keep interest rates low and boost money supply, a nation’s debt and currency debasement should me of much concern. 

Most recently, a study indicated that the U.S. national debt has ballooned nearly 12 fold over the last 30 years.  Additionally, over this same time span the ratio of debt to GDP has gone from nearly one-third to 85%.  During this time of exploded debt, GDP has only expanded 5.3 times, indicating that debt is growing at twice as fast as the U.S. economy.  Similar trends have been seen in Europe, in particularly Greece, Spain and Portugal.

Some concerns of this exponential growth in debt include hyperinflation, as a result of printing more currency, a decline in the value of a nation’s currency, better known as currency debasement, and increased costs of borrowing, which make it difficult to chip away at deficits. Read more of this post