ETF Outlook for October 30, 2013 (ARGT, FAN, USMV, IHF)
Here is Benzinga's ETF Outlook for Wednesday, October 30, 2013.
Global X FTSE Argentina 20 ETF (NYSE: ARGT)
The midterm election results have been counted in Argentina and it was a blow to the current ruling party. It is now looking as if President Cristina Kirchner may not win a third term, changing the economic landscape in the country.
The ETF is up 21 percent this year, but has fallen 4.5 percent in the last week. The country has a gamut of issues it is dealing with economically and some thought a new ruling party could be what was needed to change the situation. So far, investors have not greeted the new politicians with open arms. The next few weeks should be interesting for the country and the ETF.
First Trust Global Wind Energy ETF (NYSE: FAN)
The focus on global warming and green energy has not been in the headlines for a long time. The reasons range from the fact more important stories have found their way to the top of the page as well as the underperformance of the stocks in the sector for several years.
FAN lost over 80 percent of its value from June 2008 through July 2012. From the low in July of last year through yesterday’s close the ETF has doubled in price.
The chart of FAN over that time has been one of the best in the market as it has been flying under the radar. The ETF that is heavily invested in Europe (64 percent) has been catching buyers based on valuation and a rebound in the European stock market. The long-term outlook for FAN may look great, but in the short-term it has the wind at its back – pun intended.
iShares Dow Jones U.S. Health Care Providers ETF (NYSE: IHF)
The disaster that has been the rollout of Obamacare could be the reason that IHF is not joining the other health care related ETFs at new highs. The ETF finished up 0.4 percent yesterday, but it has struggle the past two weeks, down six of the last nine days. The S&P 500 has been up eight of the last nine days.
The next couple of weeks will be crucial for not only Obamacare, but also how the health care providers that play such an integral roll in the new program react. There is major support for IHF at the $85 area that is must hold. If the ETF breaches support it could signal danger ahead for the entire sector.
iShares MSCI U.S. Minimum Volatility Index ETF (NYSE: USMV)
The ETF looks to identify stocks that have below average volatility compared to the overall U.S. equity market. The stocks must be ranked in the top 85 percent of all securities based on market cap that are traded on stock exchanges in the U.S. The ETF is lagging the S&P 500 this year, but a recent breakout from a quadruple high created an extremely bullish pattern.
Add in the fact that the stocks that make up the ETF are doing well in a strong market and all signs point to USMV outperforming the next few months. The top sectors are health care, financials, and consumer staples. All three have been rising, but for different reasons. There are a total of 133 stocks in the ETF and it pays a modest dividend of 2.57 percent.
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