ETF Wrap: The ETF That Is Bullish on America in 2013
Plus, double-digit growth for health insurance providers in 2013 and the most disappointing emerging market ETFs
Bullish on America? This Is Your ETF
The 20 stocks held by the iShares Dow Jones Transportation Average Index Fund (NYSEARCA:IYT) are big transportation companies that move goods around the country and the world. This group of companies sees robust growth during the upswing of an economic cycle, but has the staying power to survive cyclical dips.
The companies in the iShares Transports fund are durable businesses. They are the pipelines of the world economy, serving as the vital link between producers and consumers.
The top five holdings in the iShares Transports fund include three Class I railroads -- Union Pacific (NYSE:UNP), Kansas City Southern (NYSE:KSU), and Norfolk Southern (NYSE:NSC) -- and the world's two largest parcel service companies, FedEx (NYSE:FDX) and UPS (NYSE:UPS). Read more...
Health Insurance Providers Set for Double-Digit Growth in 2013: S&P
Following company-specific missteps in the first half of the year, health insurance providers or managed care organizations (MCOs), have been laggards relative to other sub-sectors in 2012. On the heels of improved earnings for the group in the third quarter, S&P Capital IQ sees better earnings and share price performance in 2013.
"While individual and commercial enrollment for the group as a whole has declined over the past few years, given high unemployment rates and reduced affordability amid the tough economy, some MCOs have been realizing higher individual and/or commercial membership through market-share gains or acquisitions," said S&P Capital IQ in a new research note. "Most have also been realizing rising Medicare Advantage enrollment, as well as rising Medicaid enrollment, as states transitioned their Medicaid populations to managed health care to help save money."
While S&P is forecasting similar enrollment trends next year as have been seen over the past three years, the research firm sees "double-digit, group-wide EPS growth."
One ETF investors can use to play a potential rebound in MCOs is the iShares Dow Jones US Healthcare Providers Index Fund (NYSEARCA:IHF). Read more...
Three of 2012's Most Disappointing Emerging Markets ETFs
Broadly speaking, 2012 has been a good year for emerging markets ETFs. Diversified funds such as the iShares MSCI Emerging Markets Index Fund (NYSEARCA:EEM), the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSEARCA:EEMV), and the WisdomTree Emerging Markets Equity Income Fund (NYSEARCA:DEM) have delivered solid returns.
At the country level, ETFs tracking developing nations ranging from Colombia to Mexico to the Philippines to Thailand to Poland and scores of others have impressed as well.
That all sounds good, but it does not mean all emerging markets ETFs have delivered for investors in 2012. Some have been downright disappointments, including marquee emerging markets ETFs such as the iShares MSCI Brazil Index Fund (NYSEARCA:EWZ). Read more...
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