Exchange-traded funds have taken the investing world by storm, having made it easy for millions of investors to get exposure to the overall stock market as well as niche investment areas. But lately, we've seen one big flaw emerge with ETFs that investors need to be aware of.
In the following video, Fool contributor Dan Caplinger notes that recently, several ETFs have shown big disparities between their share prices and the underlying value of the assets. Dan points out that while this is fairly common among international ETFs, where foreign markets aren't always open when U.S. exchanges are trading, the phenomenon has spread to U.S. bond market ETFs. Dan concludes that a lack of liquidity is always a concern with ETFs, and so you really need to look at the underlying assets before you buy ETF shares.
To learn more about a few ETFs that have great promise for delivering profits to shareholders, check out The Motley Fool's special free report "3 ETFs Set to Soar." Just click here to access it now.
Hot Net Payout Yield Companies To Buy For 2015: OM Group Inc.(OMG)
OM Group, Inc. develops, produces, and markets specialty chemicals, advanced materials, and electrochemical energy storage products worldwide. The company operates in three segments: Advanced Materials, Specialty Chemicals, and Battery Technologies. The Advanced Materials segment manufactures inorganic products using unrefined cobalt and other metals and serves the battery materials, powder metallurgy, ceramics, and chemical end markets. It offers cobalt powders, precursors, chemicals, pigments and ceramics, and various raw materials. These products enhance the electrical conduction of rechargeable batteries, as well as strengthen and add durability to diamond and machine cutting tools and drilling equipment. The Specialty Chemicals segment offers electronic chemicals for the printed circuit board, memory disk, general metal finishing, electronic packaging and finishing, and photovoltaic markets. This segment also provides advanced organics comprising additives and driers for paints, and printing inks; rubber adhesion promoters for tires; composite and other catalysts for chemicals; and fuel oil additives, lubricants, and grease additives. In addition, it offers ultra pure chemicals used in the manufacture of electronic and computer components, such as semiconductors, wafers, and liquid crystal displays; and photo-imaging masks, including high-purity quartz or glass plates containing precision, microscopic images of integrated circuits; and reticles for the semiconductor, optoelectronics, and microelectronics industries under the Compugraphics brand name. The Battery Technologies segment provides battery products, primary and secondary batteries, battery management systems, battery chargers, and energetic devices for defense applications; primary and secondary batteries for satellites, aircraft, and the packaging of cells; and miniature batteries to power implantable medical devices. The company was founded in 1991 and is headquartered in Cle veland, Ohio.
Advisors' Opinion: - [By Brian Pacampara]
What: Shares of specialty chemical company OM Group (NYSE: OMG ) climbed 14% today after its quarterly results easily topped Wall Street expectations.
- [By Canadian Value]
Position % of Fund Assets 1) First American Financial Corp. (FAF) 7.0% 2) Apple, Inc. (AAPL) 6.5% 3) Coinstar, Inc. (CSTR) 4.8% 4) EMC Corp. (EMC) 4.4% 5) Coach, Inc. (COH) 4.4% 6) Kohl's Corp. (KSS) 4.1% 7) Blucora, Inc. (BCOR) 4.0% 8) Tetra Tech, Inc. (TTEK) 3.1% 9) OM Group, Inc. (OMG) 3.0% 10) American International Group, Inc. (AIG) 2.8% TOTAL 44.1% One area that we believe still offers some value in the market is in high quality, large��ap technology stocks that may be momentarily out��f��avor as they transition from rapid growth to slower growth. In particular, we become interested when that transition is also accompanied by a change in capital allocation policies designed to return more cash to shareholders in the form of dividends and share repurchases. We believe that Apple and EMC are two of the absolute highest quality technology businesses in the world and both have recently announced very material, shareholder��friendly changes to how they will allocate capital.
Hot Net Payout Yield Companies To Buy For 2015: Olympus Pacific Minerals Inc(OYM.TO)
Olympus Pacific Minerals Inc. engages in the acquisition, exploration, development, mining, and reinstatement of gold bearing properties in southeast Asia. The company produces and sells primarily gold and by-products, such as silver. Its principal properties include the Bong Mieu Gold property and the Phuoc Son Gold property located in central Vietnam; the Bau Gold property located in central Malaysia; and the Capcapo Gold Property located in the northern Philippines. The company was formerly known as Olympus Holdings Ltd. and changed its name to Olympus Pacific Minerals Inc. in November 1996. Olympus Pacific Minerals Inc. was incorporated in 1951 and is based in Toronto, Canada.
Atikwa Resources Inc. engages in the acquisition, exploration, development, and production of petroleum and natural gas properties in Western Canada. It has interests in the Windfall prospect, Porcupine Hills prospect, Bakken project, and Spearfish project located in southern Saskatchewan and Manitoba. The company was formerly known as Atikwa Minerals Corporation and changed its name to Atikwa Resources Inc. in November 2009. Atikwa Resources Inc. is based in Calgary, Canada.
Hot Net Payout Yield Companies To Buy For 2015: Premier Investments Ltd(PMV.AX)
Premier Investments Limited invests in listed securities and money market deposits in Australia. It invests in securities for both long term and short term gains, and dividend income and interest. The company is based in Melbourne, Australia.
Hot Net Payout Yield Companies To Buy For 2015: GeoGlobal Resources Inc. (GGR)
GeoGlobal Resources Inc., through its subsidiaries, engages in the exploration and development of oil and natural gas reserves in India, Israel, and Colombia. It has activities in four geological basins located offshore and onshore in India; one geological basin located offshore in Israel; and one geological basin located onshore in Colombia. The company has exploration rights pursuant to PSCs with the government of India are located in the Krishna Godavari Basin offshore and onshore in the State of Andhra Pradesh in south eastern India; the Cambay Basin onshore in the State of Gujarat in western India; the Deccan Syneclise Basin onshore in the State of Maharashtra in west central India; and the Bikaner-Nagaur Basin onshore in the State of Rajasthan in north western India. It also has exploration rights pursuant to licenses located in the Levantine Basin located off the coast of Israel. As of December 31, 2011, the company had interests in approximately 1,609,645 net acres . GeoGlobal Resources Inc. was founded in 2002 and is headquartered in Calgary, Canada.
Hot Net Payout Yield Companies To Buy For 2015: MGIC Investment Corp (MTG)
MGIC Investment Corporation (MGIC), incorporated June 21, 1984, is a holding company and through wholly owned subsidiaries is a private mortgage insurer in the United States. As of December 31, 2012, its principal mortgage insurance subsidiaries, Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC), were each licensed in all 50 states of the United States, the District of Columbia and Puerto Rico. During the year ending December 31, 2012, the Company wrote new insurance in each of those jurisdictions in MGIC and/or MIC. The Company capitalized MIC to write new insurance in certain jurisdictions where MGIC no longer meets, and is unable to obtain a waiver of, those jurisdictions��minimum capital requirements. Private mortgage insurance covers losses from homeowner defaults on residential mortgage loans, reducing and, in some instances, eliminating the loss to the insured institution if the homeowner defaults.
Mortgage Insurance
Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure. Primary insurance is written on first mortgage loans secured by owner occupied single-family homes, which are one-to-four family homes and condominiums. Primary insurance is also written on first liens secured by non-owner occupied single-family homes, which are referred to in the home mortgage lending industry as investor loans, and on vacation or second homes. Primary coverage can be used on any type of residential mortgage loan instrument approved by the mortgage insurer.
When a borrower refinances a mortgage loan insured by the Company by paying it off in full with the proceeds of a new mortgage that is also insured by it, the insurance on that existing mortgage is cancelled, and insurance on the new mortgage is considered to be new primary insurance written. Therefore, continuation of its coverage fr! om a refinanced loan to a new loan results in both a cancellation of insurance and new insurance written. When a lender and borrower modify a loan rather than replace it with a new one, or enter into a new loan pursuant to a loan modification program, its insurance continues without being cancelled assuming that the Company consent to the modification or new loan.
The borrower�� mortgage loan instrument requires the borrower to pay the mortgage insurance premium. There are several payment plans available to the borrower, or lender, as the case may be. Under the monthly premium plan, the borrower or lender pays it a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to it in advance, and it earns and recognizes the premium over the next 12 months of coverage, with annual renewal premiums paid in advance thereafter and earned over the subsequent 12 months of coverage. Under the single premium plan, the borrower or lender pays it a single payment covering a specified term exceeding twelve months.
Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan, which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. In general, the loans insured by it in Wall Street bulk transactions consisted of loans with reduced underwriting documentation; cash out! refinanc! es, which exceed the standard underwriting requirements of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively GSEs); A- loans; subprime loans, and jumbo loans.
Other Products and Services
The Company has participated in risk sharing arrangements with the GSEs and captive mortgage reinsurance arrangements with subsidiaries of certain mortgage lenders, which reinsure a portion of the risk on loans originated or serviced by the lenders, which have MGIC primary insurance. It provides information regarding captive mortgage reinsurance arrangements to the New York Department of Insurance (known as the New York Department of Financial Services), the Minnesota Department of Commerce and the Department of Housing and Urban Development, (HUD). It performs contract underwriting services for lenders, in which it judges whether the data relating to the borrower and the loan contained in the lender�� mortgage loan application file comply with the lender�� loan underwriting guidelines. It also provides an interface to submit data to the automated underwriting systems of the GSEs, which independently judge the data. These services are provided for loans, which require private mortgage insurance, as well as for loans that do not require private mortgage insurance. It provides mortgage services for the mortgage finance industry, such as portfolio retention and secondary marketing of mortgages.
The Company competes with Federal Housing Administration, Veterans Administration, PMI Mortgage Insurance Company, Genworth Mortgage Insurance Corporation, United Guaranty Residential Insurance Company, Radian Guaranty Inc., CMG Mortgage Insurance Company, and Essent Guaranty, Inc.
Advisors' Opinion: - [By Zachary Tracer]
Investors have poured cash into mortgage insurance this year as home prices rise, pushing up shares of MGIC Investment Corp. (MTG) and Radian Group Inc. (RDN) by more than 100 percent, and buying their notes in offerings. Essent Group Ltd. (ESNT), a mortgage guarantor funded amid the financial crisis by Goldman Sachs Group Inc. and billionaire George Soros, filed last month for an IPO. The companies cover losses when homeowners default and foreclosures fail to recoup costs.
Hot Net Payout Yield Companies To Buy For 2015: United Silver Corp (USC.TO)
United Silver Corp. (United Silver), formerly United Mining Group, Inc., is engaged primarily in providing mining and contracting services and the exploration and development of the Crescent Silver Mine (Crescent Mine). The Crescent Mine Project consists of 365 hectares (902 acres) and is located in northern Idaho. The Mine Services Division provides various mine services to mine owners, including underground and surface development and rehabilitation, contract mining, claim staking, and property reclamation. The Contracting Services Division provides construction and general contracting services to both public and private customers, including excavation, demolition, road construction, property remediation and reclamation, stream restoration, pond and dike construction, custom home building, and masonry. The Fabrication & Machine Services Division provides custom welding, machining, and fabrication services to mine owners, mine suppliers, and local customers.
Hot Net Payout Yield Companies To Buy For 2015: Sky China Petroleum Svcs Ltd. (W81.SI)
SKY China Petroleum Services Ltd., an investment holding company, provides petro-engineering technical services to the oil and gas industry in the People�s Republic of China. The company�s Drilling Services segment provides technical and mechanical engineering in the supervision of the use of directional drilling technology for the reworking of old wells. Its Rental of Oil-Drilling Rigs segment engages in leasing drilling rigs to third parties. The company�s Transportation of Petroleum Products segment provides shipping intermediary services and distribution of oil products for ship and non-dangerous chemical fuel oil. Its Time Charter segment offers vessel leasing services. The company was founded in 1995 and is based in Singapore.
Hot Net Payout Yield Companies To Buy For 2015: Claude Resources Com Npv(CRJ.TO)
Claude Resources Inc. engages in the acquisition, exploration, and development of precious metal properties in Canada. It explores for gold mineral reserves and mineral resources in northern Saskatchewan and northwestern Ontario. The company principally holds a 100% interest in the Seabee gold mine covering an area of 14,400 hectares located at Laonil Lake, northern Saskatchewan. It is also involved in the production and marketing of minerals. Claude Resources Inc. was founded in 1980 and is based in Saskatoon, Canada.