The Tax Bill of ETFs and ETNs

With the tax deadline rapidly approaching, it is absoltuly essential that investors understand how their exchange traded funds (ETFs) and exchange traded notes (ETNs) will be taxed.

With the vast array of ETFs to choose from, taxes can get tricky. In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates. For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates. Read more of this post


Three Utility ETFs Worth A Look

In a time when fear and uncertainty are causing the stock market to take a roller coaster ride, the attractiveness of the utility sector remains intact, and for good reason.

In general, the utility sector is known for shooting off decent dividends and carries a relatively high degree of safety. The sector remains a safe haven and tends to shine in times of uncertainty because the services that it offers are an indispensible part of life, enabling utilities to have reliable earnings streams. Read more of this post

Four Reasons To Short Solar ETFs

The solar energy sector continues to witness whipsaw action and downward price pressure throughout the industry is likely to prevail in the near-term future as supply and demand imbalances continue to widen. 

Fundamentally speaking, the sector has numerous headwinds and continues to remain weak.  As a whole, the sector has been plagued by falling prices, inventory buildups and extension of credit terms.  In fact, Stephen Simko of Morningstar suggests that the industry will likely bottom out in the coming months despite witnessing increased global installation activity due to lackluster demand, which will make it very difficult to reduce inventory levels and keep factories running at high utilization rates. Read more of this post

3 ETFs Impacted By Durbin Amendment

The Durbin Amendment seeks to reduce credit and debit card networks from imposing anti-competitive restrictions and high transaction fees on small businesses, merchants and government agencies and could provide positive support for some large-cap and regional banks. 

More specifically, the Durbin Amendment is aiming at preventing both MasterCard (MA) and Visa (V), who constitute roughly 80 percent of all credit and debit card transactions, from continuing to increase debit card interchange fee rates.  To regulate the fee structure, the amendment would direct the Federal Reserve to issue regulations to ensure that interchange fees imposed are “reasonable and proportional” to the cost incurred in processing the transaction.  Read more of this post

4 ETFs Hit By Falling Home Values

According to the S&P/Case-Shiller index of property values in 20 major cities, the housing sector continues to face headwinds and remains in a slump.

The index fell 3.6 percent from March 2010 to March 2011, marking the largest year-over-year decline since November 2009 and reached its weakest point since March 2003.  Furthermore, pending sales of previously owned homes dropped a whopping 12 percent in April from the prior month, forcing many home builders to be wary of when a recovery could be in sight.  Read more of this post

4 ETFs To Play Apple’s Stellar Quarter

Once again, technology giant Apple (AAPL) beat analyst expectations and continues to be the envy of the technology world.  This outperformance is likely to provide support to the PowerShares QQQ (QQQ), the iShares Dow Jones US Technology ETF (IYW), the Technology Select Sector SPDR (XLK) and the Vanguard Information Technology ETF (VGT).  Read more of this post

Four ETFs To Play An Aging Population

As the equity markets continue to remain volatile and are highly susceptible to overall investor sentiment, it is important to consider certain sectors which are able to prosper in times of challenging economic conditions and the biotechnology sector could be one. 

One of the primary drivers that biotechnology has appeal is the aging of the global baby boomer generation.  In fact, according to the Associated Press, in Japan, nearly a quarter of its total population is Japanese aged 65 and older and the Japanese government expects this group to climb to nearly 40 percent of the nation’s population by 2050.  A similar trend is emerging in the United States as the American Association of Retired Persons (AARP), expects nearly 70 million individuals to be Medicare beneficiaries over the next two decades as compared to 45.2 million in 2008.  Read more of this post