SPDR Euro Stoxx 50 - FEZ - Weekly - Long term underperformance
S&P500 -SPY- Weekly - Red compares to the Euro Stoxx 50 - FEZ - Weekly:
This spread is a new one to me - but seems worthy of some deeper consideration: Look at the performance of the European Top 50 Stocks Index. For 10 years it has gone NOWHERE while the S&P500 is now up 64% over that time frame. Each pays a dividend and FEZ pays a lot more than SPY, but the point here is that if you have money in the S&P500 and IF YOU WANT TO FIND SOMETHING ELSE TO BUY, you would definitely want to consider FEZ as a replacement for the longer term. Your income increases to 3.3% from sub 2.0% (more than a 50% jump in your income).
From a market neutral perspective, it seems very easy to go long FEZ and sell short SPY, dollar for dollar, and hold this position for a year or two. The return would come from the relative return of these two instruments. A 60% return in a year or two seems very possible. Catalysts would be needed, of course, but I wonder if the recent S&P500 correction will lead investors to search far and wide for alternatives and then move their money slowly over time.
Tim 1:36PM EST October 13, 2014
SPY 190.82 +0.28 last (sell short)
FEZ 37.22 +0.43 last (go long, buy)
This spread is a new one to me - but seems worthy of some deeper consideration: Look at the performance of the European Top 50 Stocks Index. For 10 years it has gone NOWHERE while the S&P500 is now up 64% over that time frame. Each pays a dividend and FEZ pays a lot more than SPY, but the point here is that if you have money in the S&P500 and IF YOU WANT TO FIND SOMETHING ELSE TO BUY, you would definitely want to consider FEZ as a replacement for the longer term. Your income increases to 3.3% from sub 2.0% (more than a 50% jump in your income).
From a market neutral perspective, it seems very easy to go long FEZ and sell short SPY, dollar for dollar, and hold this position for a year or two. The return would come from the relative return of these two instruments. A 60% return in a year or two seems very possible. Catalysts would be needed, of course, but I wonder if the recent S&P500 correction will lead investors to search far and wide for alternatives and then move their money slowly over time.
Tim 1:36PM EST October 13, 2014
SPY 190.82 +0.28 last (sell short)
FEZ 37.22 +0.43 last (go long, buy)
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