Lowest temperatures in more than two decades have left most
parts of America shivering. In particular, the Midwest and
Northeast, experienced arctic-like conditions after the polar
vortex. Southern U.S. is also seeing freezing temperatures.
FT-ISE R NAT GA (FCG): ETF Research Reports
MKT VEC-RETAIL (RTH): ETF Research Reports
US-OIL FUND LP (USO): ETF Research Reports
VIPERS-UTIL (VPU): ETF Research Reports
SPDR-SP O&G EXP (XOP): ETF Research
SPDR-SP RET ETF (XRT): ETF Research Reports
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This is restricting the movement of people and goods by road, air
or ship and hurting some food companies. However, some sectors
are likely to reap benefits from this severe weather condition.
Investors might like to cash in on this opportunity in the form
of ETFs that carry lower risk compared to individual stock
holdings. For those investors, we have highlighted some ETFs that
could be in focus and move higher on rising demand in the coming
Oil and gas price has risen this week in anticipation of rising
demand and falling supply. Harsh weather is curtailing production
and disrupting some refinery operations while boosting demand for
heating fuel. This combination of rising demand and falling
supply will push up oil and gas prices further (read:
Will the Clean Energy ETF Surge Continue in
In order to play this surge, investors could either deal directly
in the futures market or concentrate on oil and gas producers.
The two lucrative choices in this space could be
SPDR S&P Oil & Gas Exploration & Production
First Trust ISE-Revere Natural Gas Index Fund (
. While XOP provides equal weight exposure to the basket of
securities in oil and gas, FCG provides the same to the natural
XOP has $717.6 million in AUM invested across 81 securities and
FCG holds 30 stocks in its basket having $453.6 million in its
asset base. In terms of annual fees, XOP is cheaper than FCG by
25 bps. However, FCG is expected to outperform XOP as it has a
Zacks ETF Rank of 2 or 'Buy' rating while XOP has Zacks ETF Rank
of 3 or 'Hold' rating.
For the futures market, investors have
United States Oil Fund (
for direct exposure to the spot price of WTI and
United States Natural Gas Fund (
for natural gas spot price (read:
Will Natural Gas ETFs Extend Their Winning
Utility companies are poised to benefit from severe cold as more
Americans use electricity for heating, leading to higher bills.
Though there are several ETFs in this space, the two
Utilities Select Sector SPDR (
Vanguard Utilities ETF (
might be good options (see:
all the Utilities ETFs here
With AUM of $4.5 billion, XLU provides exposure to a small basket
of 31 securities with nearly 57.4% concentration on the top 10
firms. Electric utilities take the top spot in terms of sector at
54.33%, closely followed by multi utilities (37.84%). The ETF
charges 0.18% in expense ratio. Though the fund could get a boost
in the near term from a freezing U.S., investors should note that
the long-term outlook on the fund remains bleak with a Zacks ETF
Rank of 4 or 'Sell' rating.
On the other hand, VPU has amassed nearly $1.3 billion in asset
base and charges 14 bps in annual fees. The fund is home to 78
securities and the top 10 companies hold about 46.4% of total
assets. Here again, electric utilities take the lion's share with
51.8%, followed by multi utilities. The ETF has a decent Zacks
ETF Rank of 3 or 'Hold' rating.
Some retailers could see an uptick in demand. These include space
heaters, shovels, snow blowers, apparels, and other cold-weather
accessories. This would lead to higher stock prices and investors
could well tap this opportunity through
SPDR S&P Retail ETF (
Market Vectors Retail ETF (
XRT provides diversified exposure to the basket of 104 retail
stocks as none of these holds more than 1.13% of assets. In terms
of sector holdings, the fund allocates double-digit exposure to
apparel retail, specialty stores, automotive retail and Internet
retail. The ETF has over $1 billion in AUM and charges 35 bps in
fees and expenses (read:
A Comprehensive Guide to Retail ETFs
Holding 26 securities, RTH is concentrated in the top 10
securities at 59% of total assets. From a sector look, specialty
retail takes the top spot at 33% while hypermarkets, departmental
stores and healthcare services round off to the next three spots.
The fund has managed assets of $40.5 million and has expense
ratio of 0.35%.
Both the products have a Zacks ETF Rank of 2 or 'Buy' rating.
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