ETFxray

First Trust to Launch European Dividend ETF

The First Trust family of exchange-traded funds plans to launch the First Trust DJ STOXX Select
Dividend 30 Index Fund (FDD). This ETF will seek investment results that correspond generally to the price and yield (before expenses) of the Dow Jones STOXX Select Dividend 30 Index made up of European companies. The current yield on the index is 4.72%.

The Index is a dividend weighted index of 30 stocks selected from the Dow Jones STOXX 600 Index which includes high-dividend yielding companies across 18 European countries that have a positive five year dividend-per-share growth rate and a dividend to earnings-per-share ratio of 60% or less.

The top holdings in the ETF basket are Lloyds TSB Group at 5.84% and Vodafone at 5.5%. The pattern of weightings in the seem to be more equally weighted than market cap ETFs. 38% of the companies in the basket are from the financial sector and 23% from the telcom sector.

By Carl Delfeld of the Chartwell ETF Advisor

European ETFs Look Strong

Spain continues to look strong. EWP is well above its bullish support level and hit a new 52 week highs earlier this month. EWP is up 51.23% from its 52 week low of $38.22. That’s pretty impressive, but can EWP maintain this blazing pace? The European regions 21 ETFs since January 3, 2006 are up an average of 39.09%. The possibility for double digit gains in this incredible region seems pretty likely.

By DE Smith of MyPortfolioView

European Funds and ETFs Suffer Outflows

Exchange-traded fund investors can gain from tracking where the big global equity managers are placing their bets. For the second week in June showed redemptions from Western European equity funds and ETFs totaled $1.74 billion - and an additional $200 million flowed out of these funds on June 14 according to EPFR Global’s new daily fund flow service despite a day of strong fund performances. Solid growth, data showing wages growing faster than inflation, the ECB’s assertion that interest rates are still accommodative and the Swiss central bank’s recent hike all suggest interest rates in this region have yet to peak, raising fresh questions about the strength of future corporate earnings and M & A activity.

Japan and China funds extended their losing runs and global equity funds also suffered a rare week of net outflows. Pacific Equity Funds were hit with redemptions for a third straight week as they continue to pay for their heavy exposure to Japan and China. But year-to-date outflows from China and Greater China fund groups now total $4.8 billion versus combined net inflows of $10.46 billion during 2006

EPFR Global noted that among the week’s winners were Emerging Markets Bond Funds and Latin America equity funds. But the most eye-catching numbers were posted by US equity funds, which chalked up net inflows of $9.8 billion – largely on the strength of a $10.2 billion net inflow into the SPDR S&P 500 ETF – and renewed interest in growth stocks.

Posted by Carl Delfeld of the Chartwell ETF Advisor

Six Popular Regional ETFs Move to the Downside by 5% Plus

Each of the following ETFs has recently reversed in value between 5% – 7%. For more information on each of the following ETFs you can login to your MyPortfolioView account by clicking here.

By DE Smith of MyPortfolioView

iShares MSCI Spain Index (EWP)

> The government has avoided politically painful economic reform and, with the economy still apparently performing well, is not going to change course before the next election, due in March 2008. Indeed, it will probably not take any radical initiatives if re-elected. If the opposition Popular Party were to form a government, it would talk more of reform, but on its past record in government probably only make modest changes to policies.

> GDP growth is expected to slow to just over 2% over the forecast period, from 3.9% in 2006. As a result of high indebtedness on the part of households and companies, domestic consumer and investment demand growth will grow less than in recent years. Net exports should cease to exert a drag on economic growth. The current-account deficit, although narrowing, will remain in the red.

> High property prices and an expansion of housebuilding activity to 9% mean that there is a significant risk that a downturn in the property market could cause a severe negative shock to the economy both through the impact on general consumer confidence and through loss of jobs in the construction sector. Our central forecast of an orderly slowdown could prove over-optimistic and the shock could instead lead to recession and prolonged economic weakness.

By DE Smith of MyPortfolioView

iShares MSCI Austria Index (EWO)

The below point & figure chart shows the volatility of (EWO) Austria’s ETF year to date. Its been a bumpy January and February for EWO giving up 10.87%. From its March low of $3367 EWO rallied 21.69% to reach $4,096 by April. The overall trend of EWO has been upward, but with great resistance. As of today Austria is in a column of O’s giving up more and more of its gains and threatening to dip below where it began the year.

By DE Smith of MyPortfolioView

German ETF (EWG) Buoyed by Stronger Economic Growth

There was good news for the German exchange-traded fund (EWG) as the German economy grew at its fastest rate for five years between April and June boosted by higher domestic demand. The economy grew 0.9% in the quarter - despite lower export growth - a level not seen since the first quarter of 2001.

Numbers for the previous quarter were also revised upwards, a sign that Europe's largest economy is finally achieving sustained economic growth. Investment in construction and equipment above all contributed to the economic upturn in the second quarter." Hochtief - Germany's largest builder posted a rise of 8.7% in its profits for the second quarter. Much of the World Cup, hosted by Germany, took place during this second quarter, which also acted as a fillip to the economy.

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By DE Smith of MyPortfolioView

Are European ETFs Too Popular?

It seems like everyone is jumping on the European ETF bandwagon. Is it time to swim against this storming tide?

A Merrill Lynch report discussed by the Street.com's Brett Arends shows that record numbers of fund managers believe Europe has the best profit outlook over the next 12 months. And an astonishing net 56% of asset allocators say they already are overweight European equities in relation to their benchmarks.

Arends notes that the net figure, which has soared from just 35% two months ago, is found by deducting the bears from the bulls. In the details of the survey, you find that two-thirds of fund managers surveyed are either "moderately" or "aggressively" overweight European equities. Meanwhile, a measly 12% are underweight Europe. Some markets in countries like Switzerland and Spain appear expensive while others look cheap compared to US markets.

This would give anyone pause but the mommentum players will still pile in making a bearish position difficult. Perhaps it is a good time to take some money of the table. But the politics of Europe may be part of why European markets iare sailing forward. The election of a center-right coalition in Sweden last October and the recent election of pro-market forces in France may point to a mini Reagan revolution in Europe.

By Carl Delfeld of the Chartwell ETF Advisor

Overall Pullback of European ETFs

Overall pullback in Europe – Of the 21 Exchange Traded Funds tracked in the Region of Europe all but 6 have recently reversed into a column of O’s. Just a few weeks ago all were in columns of X’s for their demand status. Of the 21 ETFs (EWD) iShares MSCI Sweden has performed the best at 58.36% over the last 18 months.


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German ETF Flies With Two Engines

The Germany exchange-traded fund (EWG) has companies at the top of its ETF basket that are undisputably first class multinationals - Siemens, BMW, Allianz, DaimlerChrysler and BASF. For some time, I have argued therefore that the German ETF was tied more to the fortunes of global growth and especially markets like India and China than its slow growth home economy.

But now we are seeing improvement at home as companies increase capital spending and Germans start to open their pocketbooks. This could be a second engine. Germany’s economic recovery is broadening, with domestic investment particularly strong. Ralph Atkins of the FT reports that falling unemployment should also feed through into stronger consumer spending – long the country’s Achilles heel. Imports were up 1.7 per cent in the first quarter of 2007, reflecting the improvement in domestic demand, although March’s figures also showed a fall compared with February. Germany is still the world's largest exporter and although German export growth lost momentum in the first three months of this year, the underlying trend remains strong.

The German ETF (EWG) is up 16% so far this year and is part of a couple of Chartwell's seven ETF portfolios.

By Carl Delfeld of the Chartwell ETF Advisor