Investors FastTrack

Quality Data for Investing Strategies

Family

New Families Out

New FT Cloud families are out today!

Included in the release are our new “Purchase Minimum” families. These families group mutual funds but their minimum initial purchase amount.

Use these families to screen the 17k dividend adjusted tickers in the database.

Practical Example

Use the Family Sieve to mix, match, remove, add funds for custom screens.

Try this sieve to find retail-ish investable funds: Start with the “All – Equity” Family, then “And” the “PurchaseMin-Under $10k” family. This will display all equity funds with initial minimum purchase amounts of less than $10k.

 

Smart Beta and High Yield

We’re highlighting smart beta and actively managed ETFs again this week. While still a small portion of the overall market (see the attached article), increased market volatility and rising interest rates are bringing investor interest back to active.

For now, mostly in bond products, but re: the attached article, international and emerging market products are picking up, with $239 billion in fund flows last year vs $692 billion flowing into passively managed funds

Here’s how you would use FT Cloud to investigate the investment prospects of the active high yield funds highlighted in the article.

  1. Load spreadsheet and click “Load Family” in upper right. 
  2. Expand the tree to “Funds & ETFs” >> “Fixed Income” >> High Yield. Double click high yield to load all high yield tickers into the grid on the right.  
  3. Next, expand “Funds & ETFs”>> “Company”>> “ETF.” Then single click “All-ETF” and the press the “And” button on the upper right. This remove any tickers that are not in both the “High Yield” and “All ETF” family. This will leave us with only the High Yield ETFs.
  4. Next click load and start analyzing the ETFs in the spreadsheet. Rank by risk, return, correlation, and performance compared to the benchmark. See last weeks article on how to choose a benchmark (https://goo.gl/fCQgHd)

https://www.cnbc.com/2018/03/19/seeking-downside-protection-investors-check-actively-managed-etfs.html

Energy MLPs – What’s the deal?

MLP-listMaster limited partnerships (MLPs) have been all over the news lately. Oil and natural gas are down significantly this year, and in return, MLPs have been clobbered. (The popular AMLP – Alerian MLP is down over 35% year to date.)

MLPs operate a toll road business model and produce large, dependable dividends. With interest rate so low, for so long, MLPs have had increased popularity with FastTrackers over the past 5+ years.

This post will not get into whether we’re at a bottom or if they’ve got another leg down on tap. I’ll leave that to the talking heads on CNBC. In this post we’ll look at how to use the family sieve to build a family that contains all the many different MLP asset in the FastTrack database. Since MLP investments can exist as funds, etfs, and stocks, we’ll have to combine multiple families to get the complete list of all MLP assets in the FastTrack database.

What questions will we answer?

Once we build the MLP family, we’ll have a good list of tickers to do a relative analysis to answer questions like:

  • Which MLPs drew down the most?
  • Did all MLPs draw down?
  • Did MLPs mutual funds do better than ETFs?
  • Are stock based MLPs riskier?
  • Etc

Master Limited Partnership Basics

But first, let’s get some MLP basics. MLPs are the publicly traded partnerships that own, operate, and build energy infrastructure assets such as pipelines, storage facilities, and processing plants. The assets MLPs own are like a national highway where cars pay a “toll” to travel from state to state. Instead of cars, MLPs transport hydrocarbons and charge a “toll” to transport them from upstream producers and the end user.

MLPs charge based on the volume of product they move, so the “tolls” they charge tends not to fluctuate with the price of commodities. In order to grow, MLPs essentially have to acquire infrastructure or build it. In the recent low interest rate and easy credit enviornment, debt has been the preferred method to finance MLP growth. MLPs add debt to expand and keep paying out earning as dividends. With rates on the rise (in particular junk yields), this business model has come under stress and caused heavy draw downs across the industry.

How to build the MLP Family.

Familiy-Tree-and-SieveOpen the First, open spreadsheet “Load Family” screen. The Load Family window displays a treeview of all the FT Cloud families on the left side and a sieve to collect and funnel those families on the left.Familiy-Tree-and-Sieve-Search Next, Since we don’t know where in the tree MLPs exist, we’ll search the family tree for all families that the name contain the word “partnership.”

    1. enter “partnership” in search text box
    2. select the “family” search option (this will search all family names)
    3. press search button to display results

The search results show a family under the Funds & ETFs >> Objective >> Commodities >> Limited Partnerships. Double click the name to load the tickers into the right side list.

The limited partnership family gives us all the MLP funds and ETFs. Now we want to include all of the stock based MLPs. To do this, we’ll use an alternate search method. Familiy-Tree-and-Sieve-Search2We’ll search all families that contain a well known MLP stocks, Kinder Morgan (KMI). If a stock MLP family exists, it definitely contains this well known company. As the search results show, there are a handful of families that contain KMI, but the one we want is the Stocks >> Industry >> Oil & Gas Midstream.

Now, we’ll SINGLE CLICK the family to highlight it. Then we will click the “add” button in the upper center/right to add the Oil & Gas Midstream tickers to the ticker list in the lower right (previously loaded from the “Limited partnership” family.

We can repeat these steps any number of times with other keywords or tickers to make sure we have all MLP tickers. For now, we’ve got 149 MLP ticker in the combined family list, so click the “load” button in the lower right to load the 149 tickers onto the spreadsheet.

Now that we have all the MLP tickers on the spreadsheet. We can rank, sort, chart, and do other relative analysis work to determine industry trends, best of class funds, out performance, etc.