NASDAQ Index Blog - Archive Posts for February, 2014

NASDAQ OMX Will Modify the Maintenance Window for GIDS 2.0 Updated: 2/28/2014

Earlier this year, NASDAQ OMX extended the hours of operation for the Global Index Data Service (GIDS) data feed to support the dissemination of ticks during the Asia/Pacific market hours. Currently, GIDS observes a maintenance window from 23:35, Eastern Time (ET) to 00:05, EST. During this time data is not disseminated.

Effective Sunday, March 9, 2014, the new GIDS maintenance window will occur from 18:40, ET to 19:10, ET. Please Note: There are no message format changes to the GIDS data feed.

Please refer to the Data Technical News Alert sent earlier this year for full details.

For questions regarding the GIDS data feed, please contact NASDAQ OMX Global Indexes at +1 301 978 8284.

NASDAQ OMX Global Indexes is named the Most Innovative Index Provider of the Year by ETFExpress By: John Jacobs
on 2/27/2014

NASDAQ OMX Global Indexes has been named the Most Innovative Index Provider of the Year by the 2014 ETFExpress Global Awards. The award was presented in late February at the ETFExpress Global Awards gala in London. NASDAQ OMX Global Indexes gained the largest amount of votes in an online poll to win the title. Among the reasons for their win:

NASDAQ OMX is one of the only index providers to have products listed globally covering equities, commodities, and fixed income.

As of 2013 year-end, NASDAQ had 148 licensed ETPs globally with approximately $92.3 billion in assets under management. The ETPs based on NASDAQ indexes are listed in 16 countries, and NASDAQ OMX is the first index provider to have its indexes linked to ETPs in China, India, and Iceland.

In October 2013, NASDAQ OMX launched the NASDAQ US Rising Dividend Achievers Index, a continuation of the Dividend Achievers brand. The index was designed to include stocks that are best positioned to continue dividend increases, and the methodology includes both several dividend criteria and balance sheet criteria. The largest dividend ETF with just under $20B in assets under management tracks the NASDAQ US Dividend Achievers Select Index.

Another innovative move took place in 2013, when NASDAQ OMX partnered with Accretive Asset Management to co-brand and grow BulletShares, the first fixed-maturity corporate bond indexes; since then, assets have grown in BulletShares ETFs substantially and the NASDAQ BulletShares Ladder indexes were launched.

 

NASDAQ BuyBack Achievers Index is the basis of a New Invesco PowerShares ETF By: Rob Hughes
on 2/26/2014

We are excited to announce that Invesco PowerShares launched the Invesco PowerShares International BuyBack Achievers Portfolio (IPKW) exchange traded fund (ETF) on The NASDAQ Stock Market, providing investors efficient access to a portfolio of global companies classified as International BuyBack Achievers.

The ETF is based on the NASDAQ International BuyBack Achievers Index, which comprises international securities, excluding the United States, issued by corporations that have repurchased at least of 5% or more of outstanding shares in the trailing 12 months.
"Our U.S.-focused flagship fund, the PowerShares BuyBack Achievers Portfolio (PKW), has achieved a competitive long-term track record demonstrating the investment merit of the BuyBack Achievers methodology, and more broadly of smart beta," says Lorraine Wang, Invesco PowerShares global head of ETF products and research. "The PowerShares International BuyBack Achievers Portfolio (IPKW) expands the range of tools investors can use to efficiently allocate the BuyBack Achievers strategy across the globe."

The NASDAQ International BuyBack Achievers Index is the latest index in NASDAQ OMX’s popular Dividend AchieversTM index family. The NASDAQ Dividend Achievers are an objective composite of companies with a history of increasing dividend payouts. This select group of companies is committed to enhancing shareholder value through the return of capital to shareholders.

 

Equity Markets Rally on Housing Data and Strong Earnings Results Updated: 2/26/2014

Despite some negative economic reports in previous weeks, the US equity markets continued to rally, as new home sales data released today beat analyst forecasts. The recent surge in the markets has caused the NASDAQ Composite Index to touch a 13-year high. In addition, the price of gold has remained stable at $1,325 an ounce despite recent fluctuations in currencies and negative reports over the past few days about cyber-attacks on the virtual currency bitcoin, resulting in a huge drop-off in value. Precious metals stocks, on the other hand, were among the biggest decliners.
“With new home sales beating forecasts and strong earnings results, the U.S. equity market has largely retraced its January losses,” said David Krein, Managing Director of NASDAQ OMX Global Indexes. “Among industry sectors, the NASDAQ Clean Edge Green Energy Index was the biggest mover this week, up 5.44%, bolstered by a huge spike in shares of Tesla.”

INDEX MOVES THIS WEEK

  • NASDAQ BIOTECHNOLOGY INDEX (NBI) was up 1.54% since Friday’s close as of noon on Wednesday of this week. Year-to-date, the index is up 20%.
  • PHLX GOLD/SILVER SECTOR (XAU) was down 3.18% from the most recent Friday close. The price of oil is currently $102 per barrel, up around $6 from the end of January.
  • NASDAQ CLEAN EDGE GREEN ENERGY (CELS) and NASDAQ OMX GLOBAL AUTOMOBILE (QAUTO) both have TESLA as a core holding. Both indexes are up this week with returns of 5.44% and 0.73%, respectively.

INDEX TO WATCH

  • Some negative earnings releases have come out over the last couple of weeks in the solar space. Look for activity in this sector by tracking NASDAQ OMX Solar (GRNSOLAR), which is up a whopping 110% year-over-year.

Interested In Investing In Technology Stocks? By: John Jacobs
on 2/24/2014

 

Technology companies have always been classified as growth machines, aggressively reinvesting profits and thereby sowing the seeds of innovation and future profit growth. However, individual investments in tech stocks can be a polarizing subject amongst individual investors. This is primarily due to factors surrounding the competitive nature of management, culture and corporate governance. For these reasons, owning a basket of tech stocks in the form of an Exchange-Traded Fund (ETF) may be a better strategy for some people than individual stock selection. ETFs take nearly all of the individual fundamental attributes of stocks out of the equation, allowing investors to focus on select areas of the technology ecosystem.


The opportunities in technology and the sheer number of options available for ETF investors have never been more abundant. When allocating to a technology-focused ETF, key considerations should include (1) index selection (2) fund size and (3) strategy. Striking together an intuitive balance of funds with growth or income potential could add a supplementary facet to an otherwise traditional portfolio management approach.

Shopping for an ETF by trying to compare and contrast performance and individual fund characteristics is often times an arduous task. However, it doesn’t need to be when you consider that nearly all of the details on security selection are spelled out in plain black and white. You simply need to formulate what your portfolio goals are and how you can integrate an appropriate technology ETF into your portfolio to align with those goals.

Now that ETFs are considered a mainstay investment option for short and long term investors alike, sector ETFs encompassing every form of broad-based and industry-group specific strategies have amassed a bountiful landscape of imaginative and useful products.

One of the oldest solid-state products in existence that still contends popularity is the Technology Select Sector SPDR ETF (XLK). As the second largest technology ETF by assets under management, it was originally designed alongside it peers, the Select Sector SPDRS, to be part of the 10 individual sectors of the S&P 500 Index. XLK is market cap weighted, and envelopes the cross section of technology stocks strictly within the S&P 500. For this very reason, it carries a large concentration of large-cap stalwart tech names such as Apple AAPL +0.26% Inc. (AAPL), Google GOOG +1.15% Inc. (GOOG) and Microsoft MSFT -0.29%, Inc. (MSFT).

XLK offers investors an easy avenue of overweighting technology within a diversified portfolio of broad-based market indexes. However, it’s important to consider XLK’s lack of diversification outside tech names not admitted to the S&P 500. Which in turn leaves aside small- and mid-cap names in favor of large, well established companies with long operating histories.


Created through a collaboration of traditional index formulation and fundamental characteristic research, the First Trust Technology Alphadex Fund (FXL) is an ETF which ranks and then overweights companies with strong fundamental attributes. These traits include six and 12 month price appreciation, return on assets, book value to price and cash flow to price ratios. In the end, the top 75% of the screen marks 90 stocks for inclusion to the index ranging from small to large capitalization companies.

Investors seeking niche exposure in the world of technology stocks now have the option of investing in ETFs that target specific sub-sectors of technology. These products were created specifically for tactical investors that prefer a layer of diversification, but not at the expense of including an underperforming industry group within a specific sector.

Two examples of these ETFs are the First Trust Dow Jones Internet Index (FDN) and the PowerShares NASDAQ Internet Portfolio (PNQI). These ETFs are designed to track the largest, most liquid companies that generate at least half of their revenue from an internet related business. FDN’s top holdings include Facebook Inc. (FB), Amazon Inc. (AMZN) and eBay, Inc. (EBAY), while PQNI’s top holdings are also Facebook (FB) and eBay, Inc. (EBAY), as well as Google Inc. (GOOG). An aggressive investor might favor a position in FDN to hone in on the rapidly expanding growth of internet stocks engaged in content distribution or social networking versus companies engaged in the manufacturing and sales of technology hardware or software. Since FDN and PQNI are specialized strategies, it’s no surprise that their expense ratios are 0.60%, which is significantly higher than most broad-based ETFs.

Lastly, for investors seeking income from their invested capital, there is an index strategy that can leverage the strong free cash flow and healthy balance sheet attributes of mature technology and telecommunications companies. The First Trust NASDAQ Technology Dividend ETF (TDIV) tracks a specialized index that is comprised of companies across the capitalization structure that have a consistent history of paying dividends to shareholders. TDIV carries a current SEC Yield of 2.53%, and has an expense ratio of 0.50%. An investor looking to diversify a traditional equity income portfolio outside interest rate sensitive areas such as utilities or consumer staples stocks could utilize a fund like TDIV.

As the technology landscape has evolved over time, so have the need for products targeting multiple areas of the marketplace. ETFs have proven themselves to be one of the easiest and most efficient vehicles for exposure to individual sectors and industry groups. Evaluating and selecting the appropriate ETF for your underlying goals could ultimately yield the most favorable outcome, rather than investing in individual stocks.

*All performance statistics as of 2/3/14, data provided by Morningstar.com.

 

 

NASDAQ OMX Launches Two New Indexes in the NASDAQ IBIS Index Family By: Dave Gedeon
on 2/19/2014

NASDAQ OMX has introduced two new indexes on GIDS 2.0 - the NASDAQ IBIS Focused Growth Index (NQIBIS); and the NASDAQ IBIS Focused Growth Total Return Index (NQIBIST).

“These new indexes offer the unique viewpoint of accessing an absolute return strategy, while maintaining a rules-based and rigorous selection process,” said Dave Gedeon, Managing Director of NASDAQ OMX Global Indexes. “Partnering with IBIS Capital allows the market to benefit from both the tactical allocation models and rules-based index tracking.”

The NASDAQ IBIS Focused Growth Index will invest in exchange-traded funds covering Large Cap U.S. equities, Small Cap U.S. Equities, Developed Market Equities, and Emerging Market Equities using IBIS Capital’s Quantitative Tactical Global Rotation Strategy.

The selection of assets is determined through a proprietary technology for Relative Strength. During periods of weakness across global equity markets, the index will shift into either short-term, medium-term, or long-term U.S. government bonds, depending upon prevailing interest rates.

“We are excited to partner with Nasdaq OMX Global Indexes, a pioneer in the space of innovative indexes,” said Neal McNeil III, CEO of Ibis Capital. “These new indexes will allow investors to think about benchmarking their portfolios globally and dynamically, with a focus on downside protection and upside participation of the equity markets.”

For licensing inquiries about the NASDAQ IBIS Focused Growth Index, please call NASDAQ OMX Licensing Global Data Sales at (301) 978 8050.

 

Gold Rallies on Yellen's Testimony; Equity Markets Bounce Back Updated: 2/12/2014

Janet Yellen became the new head of the Federal Reserve and gave testimony this week surrounding the continuation of the pre-existing monetary policy.  Broad equity markets bounced back to levels last seen three weeks ago, with returns of over 1.5% since the opening on Monday. In addition, gold and gold miners also rallied as Yellen’s testimony alluded to softness in the labor market and overall economy.
 
“While the U.S. equity market has recovered a bit this week, we are also seeing a significant jump in precious metals which shows some skepticism about the broader economic recovery,” said David Krein, Managing Director of NASDAQ OMX Global Indexes.
 
INDEX MOVES THIS WEEK 
  • NASDAQ BIOTECHNOLOGY INDEX (NBI) has rebounded this week on strong earnings, returning 3.94% since Friday’s close.  Year-to-date performance for the index is up 13%.
  • NASDAQ OMX GLOBAL GOLD & PRECIOUS METALS INDEX (QGLD) was up 5.91% as of noon on Wednesday from the most recent Friday close.  The price of gold is currently $1,293.00 per ounce, up around $30 from the end of last week and over $90 year-to-date.
  • NASDAQ 100 INDEX (NDX) is up 2% since Friday.  Look for earnings over the next two days on 9 of the 100 securities in the index today including Cisco, Mondelez, Kraft and Whole Foods, among others.
INDEX TO WATCH
  • The European Central Bank is toying with the notion of dropping rates into negative territory.  Look for activity in the region by tracking the NASDAQ EUROPE INDEX (NQEU) and the NASDAQ EUROZONE INDEX (NQEURO), which are up 15% and 21%, respectively, year-over-year.
 

Broad equity markets continue to drop amid earnings disappointments Updated: 2/5/2014

Investors reacted negatively to a slight miss in ADP’s January private sector job growth estimate of 175,000 vs. expectations of 180,000.  Earlier, disappointing earnings forecasts caused a broad selloff, with global equity markets dropping over 3% so far this week.
 
“Broad equity markets have continued to drop this week amid some disappointing earnings reports and continued turmoil in emerging markets,” said David Krein, Managing Director of NASDAQ OMX Global Indexes. “The decision to continue to taper at Fed Chairman Ben Bernanke’s last meeting did not buoy the market from its recent slide, as some investors may have hoped.”
 
INDEX MOVES THIS WEEK 
  • NASDAQ BIOTECHNOLOGY INDEX (NBI) has continued its recent decline with a 2.97% drop this week.  Year-to-date performance for the index is still up 5% on the heels of the Index’s best year in the past decade.
  • PHLX OIL SERVICE SECTOR INDEX (OSX) was down 2% as of noon on Wednesday from the most recent Friday close.  The price of crude oil was flat from last week at $97.28 per barrel.
  • NASDAQ OMX GLOBAL AUTOMOBILE INDEX (QAUTO) is down 3% with the expectation of slowing growth in auto sales in 2014.
INDEX TO WATCH
  • Twitter and a handful of other social media companies are expected to report earnings in the next week.  Look for activity in the space by tracking the NASDAQ INTERNET INDEX (QNET), which is up 48% year-over-year.
 

NASDAQ® and NASDAQ® are registered trademarks of The NASDAQ Group, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither The NASDAQ Group, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding NASDAQ-listed companies or NASDAQ proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

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