2017's Best Performing Non-Leveraged ETFs

Matt Thalman - INO.com Contributor - ETFs

The stock market had an amazing year in 2017, with the S&P 500 increasing more than 19.9%, but some Exchange Traded Funds performed substantially better. Most investors wouldn’t expect a large fund to outperform the S&P 500, unless they were using leverage, taking on outsized risk through trading in volatility, or investing entirely in international/developing markets.

But, surprisingly there were a few ETF’s that not only outperformed the S&P 500 but crushed it while just being mildly risky. Below is a list of a few of them and then an explanation as to why they performed well and whether or not their hot streak can continue in 2018.

Best Performing ETFs of 2017

While this list was intended to help investors find ETF’s which offered lower risk than one would find with leveraged ETF’s, the best performer still had a little more risk than most investors should be comfortable with. The outsized risk with ARK WEB x.0 ETF (ARKW) is that its largest holding is in the Bitcoin Investment Trust (GBTC), which makes up 6.71% of the fund. The next largest is Amazon.com (AMZN) making up 6.08% of the fund. Twitter (TWTR), Athenahealth (ATHN), 2U (TWOU), Tesla (TSLA), Netflix (:NFLX), NVIDIA (NVDA), Alphabet (GOOG)(GOOGL), and JD.com (JD) round out the fund top ten holdings. GBTC’s performance in 2017 was primarily the reason ARKW crushed the overall market, but moving forward investors shouldn’t bet on that continuing to happen.

Ever since the Bitcoin futures began trading on the CBOE and CME, the price of Bitcoin has stabilized. If you are considering buying ARKW, just know that you are taking on more risk than a typical ETF due to its exposure to Bitcoin, but maybe that is why you want to own ARKW. Personally, though if I were thinking about investing in Bitcoin, I would just invest directly into the crypto-currency, not muddy the waters with GBTC due to its pricing. Continue reading "2017's Best Performing Non-Leveraged ETFs"

New Tax Laws Could Mean a Boom for Stock Buy-Back ETF’s

Matt Thalman - INO.com Contributor - ETFs

Now that the Senate has passed a tax bill and President Trump has signed off on it, investors should get ready for a few significant changes that are likely to begin happening. While the bill has been touted as a way to boost the economy and help the middle class, some economists disagree; mainly on the idea that if corporations have a lower tax bill, they will higher more workers and pay their current employee’s more money.

History has shown that when repatriated money comes back to US soil, it is largely used for share buybacks. In 2004 there was a one-time tax holiday when repatriation of foreign earnings was brought back home and taxed at a rate of 5.25%, not the usual 35%.

In 2004 fifteen companies brought back $155 billion, of the total $312 billion. Those 15 companies increased their share repurchases by 38% between 2005 and 2006. There was a clear correlation between share buybacks increasing the repatriation of overseas cash. Continue reading "New Tax Laws Could Mean a Boom for Stock Buy-Back ETF’s"

Hot Investment Opportunity Related To Housing Market

Matt Thalman - INO.com Contributor - ETFs

US Housing data from October came in at their highest levels in ten years. High demand and limited supply are pushing housing prices higher this year. In August, housing prices in Denver, Miami, Houston and the Washington D.C. metro area hit levels that most consider being overvalued.

Furthermore, now reports indicate that home prices on the lower end of the spectrum are rising faster than those in the middle and high end. Acute shortages of housing, especially in the low end of the market is causing prices in that tier to increase much faster than those in the middle or high-end tier.

Many believe home prices are increasing because millennials are finally entering the housing market, which would certainly make sense when you consider the low end of the market, or starter homes, currently have the most demand.

Prices will increase until either supply, as in the number of homes available for purchase, catches up with demand or prices hit a point that reduces demand.

It is more likely the latter will occur first, due to the time required to build more homes and especially when we consider what is likely to continue happening with interest rates. The Federal Reserve has made it clear they plan to continue increasing interest rates for the next few years, and as rates rise, the cost of homeownership follows.

So, what does this all mean? Continue reading "Hot Investment Opportunity Related To Housing Market"

Futures Market for Bitcoin Gives the Currency Staying Power, But May Hurt Price

Matt Thalman - INO.com Contributor - ETFs

Futures contracts in the crypto-currency Bitcoin (CME:BRTI) are expected to begin trading on the CBOE on Dec. 10, after getting the green light last week from regulators. That gives the CBOE a week of exclusivity. The exchange operator's larger Chicago rival the CME has said its contracts will begin trading Dec. 18.

When the futures are offered, more investors will be given access to the crypto-currency. Institutional investors for one will now be able to build a position in Bitcoin through the use of futures trading.

Furthermore, retail and small investors will have a much easier time gaining access to the fast-growing asset class through the use of futures, but certainly, if Bitcoin Exchange Traded Funds, which would use the futures, are approved. Instead of having to go through lesser-known crypto-currency exchanges and using credit cards to make purchases of Bitcoins, investors will simply be able to use their brokerage accounts and buy and sell futures contracts through the well respected and trustworthy CME.

More so, many believe that once the CME is offering Bitcoin futures, Exchange Traded Funds will be permitted to offer Bitcoin investments through the use of futures. Continue reading "Futures Market for Bitcoin Gives the Currency Staying Power, But May Hurt Price"

Square Just Made It A Lot Easier To Own Bitcoin

Matt Thalman - INO.com Contributor - ETFs

A few weeks ago, Square’s Cash Application began allowing users to buy, sell, and hold the crypto-currency Bitcoin. Square’s Cash App, which is generally used to transfer money, has now unofficially endorsed the crypto-currency with what is essentially a trial offering to a limited number of Cash App customers. It should be noted that Square has allowed customers to use Bitcoin as a form of payment for nearly two years now, but customers needed to purchase their Bitcoin’s through other methods in the past.

In a statement, a Square spokesperson said, “We’re always listening to our customers, and we’ve found that they are interested in using the Cash App to buy Bitcoin. We’re exploring how Square can make this experience faster and easier, and have rolled out this feature to a small number of Cash App customers. We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system and we’re excited to learn more here.”

Square’s Chief Executive Officer Jack Dorsey is a believer in crypto-currencies and the blockchain technology they are built on. He recently told an interviewer that blockchain is “the next big unlock.” The interview went further, and Dorsey disclosed that friends and family had asked him how they could buy Bitcoin, which may be an insight into why he has moved Square in its current direction. Continue reading "Square Just Made It A Lot Easier To Own Bitcoin"