Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| ETF
Spotlight -- Russell 1000 Growth iShares (IWF) |
Published: February 16, 2004
The Russell 1000 Growth iShares (IWF, $48.26) is an
exchange-traded fund that tracks some of the largest so-called growth
stocks in the market. Although I show a comparison to the Russell 2000
(IWM, $116.65) in the table below, that is because much of the Russell
2000 is growth oriented. The closest fund to IWF would probably be the
Dow Diamonds (DIA, $106.70). The correlation between these two would be
almost the same as the fund's correlation with the Dow Jones Industrial
Average (INDU, 10,627.85), which has been 93.4% over the past two years.
Of course, one person's growth stock is another's blue
chip steady-as-she-goes entity. I am not so sure I would call Pfizer
(PFE, $37.38), Coca-Cola (KO, $51.14), General Electric (GE, $32.72),
American International Group (AIG, $74.72) or many of the other stocks
in this fund's top holdings growth entities. However, that is how they
are labeled for the purposes of this fund. IWF is heavily weighted in
healthcare and technology issues, each of which comprise about
one-quarter of the fund's total value.
The fact that these stocks are not truly growth companies can also be
seen in the fund's average daily trading range, which for IWF is rather
narrow (1.7% per day in 2003). Growth stocks tend to be somewhat more
volatile.
| Russell
1000 Growth (IWF) |
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| Type: |
Broad Index |
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| Similar funds: |
Russell
2000 Growth (IWO) |
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Russell
2000 (IWM) |
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| Options?: |
Yes, illiquid |
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| Performance
Data |
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| 52-week High: |
$48.89 |
1/27/2004 |
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Annualized
return since: |
| 52-week Low: |
$33.32 |
3/12/2003 |
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One-year |
42.68% |
| 2003 Return: |
29.76% |
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Three-year |
-7.74% |
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Five-year |
N/A |
| Dividends: |
$0.38 |
past 12-mos |
Life of fund* |
-13.97% |
| Expense Ratio: |
0.20% |
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*
- Started trading 6/23/2000 |
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| Correlation
Data* |
(1/02/02-1/31/04) |
Holdings* |
(as of 2/11/2004) |
| Dow
Jones Industrials |
93.4% |
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General Electric
(GE) |
5.87% |
| S&P 500 |
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96.2% |
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Pfizer (PFE) |
5.34% |
| Nasdaq
Composite |
92.1% |
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Microsoft (MSFT) |
4.31% |
| Nasdaq-100 |
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90.7% |
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Intel (INTC) |
3.59% |
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Cisco (CSCO) |
3.02% |
| IWO |
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85.0% |
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Johnson&Johnson
(JNJ) |
2.88% |
| IWM |
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85.1% |
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Wal-Mart (WMT) |
2.69% |
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Coca-Cola (KO) |
1.68% |
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American Intl.
Group (AIG) |
1.54% |
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Procter&Gamble
(PG) |
1.52% |
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* Percent top ten
are of total |
32.44% |
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| Average
Daily Volume |
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Average
Daily Price Range |
| Jan-04 |
533,170 |
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Jan-04 |
1.3% |
| 2003 |
355,592 |
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2003 |
1.7% |
| 2002 |
192,318 |
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2002 |
2.4% |
| *
- Correlation measures how closely the two items track each
other |
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*
Includes prior day's close (true range) |
HOW TO MAKE MONEY IN IWF
THIS YEAR
IWF remains overbought, but as long as it holds in its up channel, the
trend remains positive. I do see room for a correction towards $43-$44,
but from a long-term perspective, I do not think it's time to short this
fund quite yet.
Look for IWF to trade in a range between about $43 and
$52 per share until the summer. After that, a much larger correction is
due. One good trading strategy here would be to write covered calls on
IWF. For example, you can sell the August $50 calls for about $1.40 (IWFHX).
I doubt that IWF will move above $52 between now and then, so this type
of a trade should prove profitable. In addition, if the fund drops, then
you will be able to buy the options back at a lower price.
Alternatively, you could just let them expire worthless and pocket the
premium you received for selling the options.
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