Financial Sector ETFs May Not Like What’s Coming in This Earnings Season

With Wall Street banks to kick off the upcoming earnings season, financial sector exchange traded fund investors shouldn’t keep their hopes too high as many expect weak results following the round of interest rate cuts. The Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF, has increased 16.4% year-to-date. Observers warned that poor net interest margins among the biggest U.S. banks could cause the sector’s first year-over-year earnings per share decline in three years, Reuters reports. While mortgage banking and cheap valuations could provide some support to U.S.…

ETF Costs Can Still Go Lower as More Scrutinize Fees

The fund industry has engaged in a fee war that sent costs closer and closer to zero, especially with index-based ETFs leading the charge, but some contend that costs are still not low enough. A class-action lawsuit filed this month against H-E-B LP alleges that the firm has been overpaying for index funds in its employees’ retirement plan, Jason Zweig writes for the Wall Street Journal. The market-matching funds come with fees ranging from 0.11% and 0.14%, but the lawsuit argued that costs should really be as low as 0.015%.…

Drug Pricing Reforms Keep Pressure on Biotech, Healthcare ETFs

Healthcare and biotechnology-related ETFs are taking a blow as drug-pricing reforms weigh on the sector outlook. The Health Care Select Sector SPDR ETF (NYSEArca: XLV) fell another 0.6% and the iShares Nasdaq Biotechnology ETF (IBB)  declined 2.0% in back-to-back selling on Thursday. The biotech segment and broader healthcare sector have underperformed the broader market as investors exited positions in response to growing discourse over policy proposals aimed at reducing drug prices in Washington, Bloomberg reports. While some argued that impeachment talks may have drawn politicians’ attention away from the drug pricing…

Active Muni ETFs to Capitalize on Shifting Yield Opportunities

Investors who are looking to diversify in the current fixed-income market environment should consider exploring municipal bond ETF strategies bolster the foundation of a well-diversified, tax-efficient bond portfolio. On the recent webcast, Muni Bond Strategies for a Low Interest Rate Environment, Samantha Azzarello, Vice President, Global Market Strategist, J.P. Morgan Asset Management; and Richard Taormina, Managing Director, Head of the Tax Aware Strategies Team, JP Morgan Asset Management, outlined the low-interest rate environment anticipated ahead and highlighted certain municipal bond strategies that are better positioned than others to benefit in…

Balancing Portfolio Risks When Even Junk Yields Less than 5%

Generating portfolio returns can be a major issue for investors in a low interest-rate environment. While an investor can pursue higher income by extending maturities or accepting poorer credit, each of those options come with their own risks. In the upcoming webcast, Total Return Alternatives: Balancing Portfolio Risks When Even Junk Yields Less than 5%, JD Gardner, Founder, and Chief Investment Officer, Aptus Capital Advisors; Adam Eagleston, Portfolio Manager, Driehaus Capital Management; and John Lueken, Executive Vice President and Chief Investment Strategist, CapWealth Group, will look at defined risk, “yield…