Tuesday, January 16, 2018

A Step Back & A Melt Up

Tuesday, January 16, 2018 - Upward momentum continued to drive US Equity Markets which set new highs last week with the S&P 500 and NASDAQ Composite closing at 2,786.24 and 7,261.06 respectively for a weekly gain of 1.57% and 1.74%. More impressively, the indexes are up YTD 4.21% and 5.18% respectively.  Investors, sensing global reflation with the US, Europe and Japan in a synchronized global growth cycle, bid up Consumer Services, Energy and Industrial stocks. In the US, tax cuts not only will increase corporate earnings, but should act as the first act of the long awaited fiscal stimulus while a national infrastructure package will be the Second Act.

Such upward moves in the equity markets beg the question “are we in a Melt Up in stock prices?”  Ed Hyman has observed that historically in the 20th century, investors bid up stock prices rapidly during periods of low inflation and strong economic growth, i.e., 3% or better. He observed 3 Super Bull Markets since 1900 as follow:

  • US - The Roaring 20s              1925-1929
  • JAPAN  The Great Bubble      1985-1989
  • US  The Tech Bubble              1995-1999

During these periods, markets rose some 3x over a roughly 5 year period. In each of these periods, markets enjoyed a flood of liquidity and ultimately a rise in interest rates killed the bull market. Having said that, need we look no further than to today’s mania in Bitcoin and other cryptocurrencies to see a flood of liquidity seeking fast returns?

If we are in a Super Bull Market, investors should be prepared to buy on any pullbacks but keep a cautious eye on interest rates. Alternatively, if we are in the last Act of this bull market, then one should be raising cash.  We think odds are that we are in the former scenario but would not be surprised to see quick sharp selloffs due to geo-political flare ups. As the global economy prospers, folks start thinking of how dissatisfied they are with the status quo, hence geo-political market surprises.

A citation in this week’s Barron’s on the research of Louise Yamada on interest rate cycles caught our eye to support the Super Bull Market theory. Her research essentially indicates that interest rates are long cycles ranging from 22-37 years. During periods of rising rates coming off historically low rate levels indicate that deflationary pressures are abating, allowing rates to gradually rise. Inflation, however, is not yet apparent.  This typically takes years to unfold. Hence, if we are here in this point in the cycle, then we have some time to go before rates rise high enough to dampen equity markets.

These trends show that research tools are increasingly needed to evaluate the vast set of opportunities in the ETF marketplace. Investing in ETFs requires a new approach to macro investing, one in which investors are just beginning to realize. Investors and traders are advised to check the ETFG Select List and the ETFG Quant Movers daily for revisions to our ratings to gain insights into the latest news developments


Thank you for reading the ETF Global Perspectives!

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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.


This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

Monday, January 8, 2018

January Effect in the Making?

Monday, January 8, 2018 – It’s no surprise that stocks started the year on a positive note, with the major U.S. market indexes reaching record highs. The Dow Jones Industrial Average spiked over 25,000 for the first time and the S&P 500 recorded its best weekly performance in over a year. International markets also participated in the rally, adding to their overwhelmingly strong 2017 performance. However, from an economic perspective, job gains in December were well below expectations, counterintuitive to the corporate infusion we saw a few weeks back. Fortunately, the three-month average still exceeds 200,000 and the unemployment rate (4.1%) remains at a 17-year low, reflecting the ongoing health of the labor market. This, along with two consecutive quarters of GDP growth above 3%, provides a solid fundamental backdrop to support the continued bull market. This bullish sentiment extended the gains of 2017 and the results have ultimately been predictable.

As a cold snap blanketed much of North America this past week, Energy and Materials were among the best performing sectors.  Also of note was the renewed strength in the technology space. Looking at specifics, energy stocks heated up Canada’s S&P/TSX Composite and helped push the index which saw new highs in each of the year’s first three days. The firming growth backdrop also nudged up government bond yields in major markets, including Europe, where yields stepped even higher after comments from European Central Bank executives suggested the ECB’s bond repurchase program may not be continued this year. Rising global bond yields added to pressure on the U.S. dollar, which has been weakening for the last three weeks. On the final day of 2017 West Texas Intermediate oil (WTI) climbed above $60-a-barrel following a pipeline explosion in Libya. We haven’t seen these prices since 2015, a truly unfortunate event considering consumers feel pressure of rising costs, low wages and bitterly cold temperatures!

ETF Global Quant Movers - Notable gainers were ETRACS Alerian MLP Infrastructure Index ETN and WBI SMID Tactical Growth Shares both saw changes of 12.5 and 9.5 respectively within the Quant Score.

ETF Global Model Portfolio - As some may have seen, theses Model Portfolios have recently rebalanced with several new products including The PowerShares FTSE International Low Beta Equal Weight Portfolio and The iShares Edge MSCI Multifactor Intl ETF both products are consistent winners within ETF Global Weekly Select List.

Thank you for reading ETFG Perspectives!

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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.


This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

Thursday, January 4, 2018

1Q 2018 Rebalance - ETFG Dynamic Model Portfolios

Thursday, January 4, 2018 - “Out with the old, in with the new” may be the unofficial mantra of every New Year’s Eve celebration, but investors might be hoping for an instant replay as far as their portfolios are concerned.  After all, they got an early Christmas present in the guise of tax reform which was a perfect way to cap twelve straight months of positive gains (and of course new highs) for stocks.  Big shoes to fill indeed.

The new year is also the start of another quarter which includes an update to the ETFG Dynamic Model Portfolios. All 4 of the Base portfolios and the 8 “Tilts” rebalanced on Tuesday, January 2nd and while 2017 might have been a low volatility snooze fest, there have been significant changes to the allocations for 1Q 2018.

Out with the old was also the mantra of our ETFG Quant Model with 3 fund replacements in the domestic sleeve of the portfolios this quarter and while it continues to favor both Small Cap and factor-based funds, there has been a significant shift in its underlying makeup.  The sole survivor from last quarter was the Direxion NASDAQ 100 Equal Weighted Fund (QQQE) a solid performer that remains in the top position followed by SPDR Portfolio Small Cap (SPSM), JPMorgan Diversified Return U.S. Small Cap Equity (JPSE) and iShares Edge MSCI Multifactor USA (LRGF).  Leaving the allocation are the VictoryShares US Small Cap High Dividend Volatility Weighted Fund (CSB), the Guggenheim S&P Smallcap 600 Pure Value ETF (RZV) and the JP Morgan Diversified Return U.S. Mid Cap Equity ETF (JPME.)

The replacement of CSB and RZV with two other core-Small Cap funds means the model portfolios retain significant exposure to smaller stocks but shifts that exposure to more core and growth oriented names at the expense of value stocks. Helping this trend is the addition of LRGF, which as the ticker implies has a more Large-Cap focus than its Mid-Cap oriented predecessor, JPME.

Changes to the Developed International sleeve were more modest with 2 products that continued into the new allocations and 2 new funds being added to the lineup. The model continues to favor single-country exposure although with a decidedly Asian flair as the iShares MSCI Singapore Capped ETF (EWS) replaces the iShares MSCI Spain Capped (EWP) with the iShares MSCI South Korea Capped (EWY) fund staying in the portfolio. Tensions over Catalonia may have cooled in the short-term but the long-term outcome is harder to see which has depressed EWP’s price momentum, but not to the point where a rebound might be imminent.

The model also favors factor funds with the iShares Edge MSCI Multifactor International ETF (INTF) holding onto the top position where it is joined by the PowerShares FTSE International Low Beta Equal Weight (IDLB) which replaces the VanEck Vectors Morningstar International Moat ETF (MOTI.)  IBLD and MOTI are both considered large cap funds, although the similarities end there.  MOTI has fewer holdings and focuses on companies with well-established brands while IBLD has a more Asian orientation and relies on the “low volatility” phenomenon to deliver its risk-adjusted returns.

Finally, the Goldman Sachs ActiveBeta Emerging Markets Equity (GEM) replaced the Franklin LibertyQ Emerging Markets (FLQE) ETF as the primary diversified Emerging Markets product.  Both funds rely on multifactor models with the major difference being that GEM currently has a larger average market cap, as well as, larger exposure to mainland China.

You can find an overview and performance information for the ETF Global Dynamic Model Portfolios at http://www.etfg.com/about-model-portfolios

Thank you for reading ETFG Perspectives!

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_____________________________________________________________
Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

Wednesday, January 3, 2018

Turning the Page

Wednesday January 3, 2018 – Happy New Year from all of us here at ETF Global! Looking back, 2017 marks another monumental year for Exchange-Traded-Funds with giant leaps in both the number of products and asset flows.  ETFs gained $476 billion in net inflows, bringing U.S. ETF assets under management to $3.4 trillion and more than 2,000 products.

Stock markets rose steadily around the globe this year, with international stocks even outperforming U.S. stocks for the first time in almost a decade. The Dow Jones Industrial Average rose more than 5,000 points, its largest ever point gain in a calendar year. All other major U.S. indexes recorded solid gains, with large-cap stocks generally performing better than smaller-caps. Additionally, it was also the ninth straight year of positive total returns for the S&P 500. Improving global economic growth and rising corporate earnings are the food that feeds the bull market but we expect its pace to slow from a trot to a walk.

As expected from the shortened and quiet holiday week, markets saw little change in the final week of 2017.  In regards to the overall developments within the ETF landscape, we would like to highlight some interesting developments. As we all know Blackrock leads in ETFs, but Vanguard is coming in hot with the firm’s long history in traditional index funds and actively managed low-cost options. Vanguard has taken well over $350 billion in total assets through December beating out most other issuers by extraordinary figures. The most popular fund this year in terms of inflows, the iShares Core S&P 500 ETF, is one of the most plain vanilla funds on the market, offering exposure to the primary U.S. equity-market benchmark yet it amassed some $30.2 billion in assets.

Our proprietary research also pointed to some interesting trends: internationally and commodity focused ETFs turn up the heat within the ETF Global Quant Movers, a surprise considering the recent passing of the largest tax reform in several decades. Honorable mentions include iShares Core MSCI Emerging Markets ETF, iShares MSCI Poland Capped ETF, and PowerShares FTSE International Low Beta Equal Weight Portfolio all seeing gains a little more than 10 points within the Quant Total Score. Losers include specialty focused US ETFs such as First Trust Nasdaq Semiconductor ETF and SPDR MSCI ACWI Low Carbon Target ETF. The top-rated ETFs within ETFG Quant are IBB and FNI both saw approximately a 25% gain over this past year and have been consistently rated as the top funds.

Thank you for reading ETFG Perspectives!

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_____________________________________________________________
Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.


This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

Friday, December 22, 2017

Best Wishes & Happy Holidays!















Happy Holidays from all of us here at ETF Global, we hope that you and your families are enjoying a wonderful holiday season!

We want to express our sincerest appreciation to all of our subscribers, clients, strategic partners, colleagues and supporters for helping to make 2017 another great year for our firm. Our 2018 goals are simply to deliver an even more agile and comprehensive data and research platform to those searching for insight on Exchange-Traded-Funds.

We wish you all a wonderful holiday season filled with great health, happiness and prosperity for the New Year!

The ETF Global Team

Thank you for reading ETFG Perspectives!

Monday, December 18, 2017

Another Week, Another Record

Monday, December 18, 2017 - The markets continue to show strength and resiliency this year as the S&P 500, Dow Jones Industrial Average and Nasdaq Composite finished the week at records highs. Their surges of 0.9%, 1.3% and 1.4% respectively were driven mainly by the tax-reform legislation making its way through Congress. Wall Street is banking on this legislation being a done deal and believes that this lower corporate tax rate will continue to spur growth throughout the industry.

In ETFs, we also saw more growth in the form of inflows.  As of Wednesday, we saw over $18B go into the equity-based products last week, according to our ETFG Fund Flow summary.

The only thing more unbelievable than the growth in the ETF industry this year has been the growth in Bitcoin. As futures started trading on Bitcoin last week, investors poured money into the products so fast that the CBOE had to halt trading momentarily because of the sharp volatility upwards. The race to creating the first Bitcoin ETF is also heating up with more issuers looking for approval of a product by the SEC. Rex Shares and Van Eck joined the long list of issuers trying to push a product through and the fact that there are futures now can only help their cases.

Going back to the lower tax rates, they would inherently help small and mid-cap companies and our ETFG Quant model, which is forward looking, found some ETFs that track those types of companies to be in favor last week. In our ETFG Quant Movers, Vanguard Mid-Cao Growth ETF (VOT), SPDR S&P International Small Cap ETF (GWX) and Vanguard Small-Cap ETF (VB) all placed in the top 10 for weekly gains to their overall score. They added 10.19, 8.35 and 7.93 to their scores respectively.

On the losers side of our scoring, we saw Oil and Gas products fall out of favor as the SPDR S&P Oil and Gas Exploration and Production ETF (XOP) and the First Trust Nasdaq Oil and Gas ETF (FTXN) lost 7.61 and 7.07 to their reward scores respectively.

With two weeks left in the year, will the markets be able to continue their surge? Up to this point, it does not look like anything will be able to stop it from moving forward which would only make the holiday season that much more special to cap the end of a great year in the investment world.

Thanks for reading ETF Global Perspectives!

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_____________________________________________________________
Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

Wednesday, December 13, 2017

Final Results - Fall 2017 ETF Global® Portfolio Challenge

Wednesday, December 13, 2017 - For all those participants that will be continuing their studies, we invite you to take part in next semester’s competition, which will be opening on Monday 12/18! Registration is free and on the contest website at www.etfportfoliochallenge.com

Five young collegians displayed investing acumen beyond their years and established themselves as the winners of the Fall 2017 ETF Global® Portfolio Challenge. Students pursuing 86 different majors from 220 schools, 34 states, 25 countries and 6 continents competed in this semester’s competition, underscoring the wide-ranging appeal that ETFs have among emerging investors. With a record number of participants from a diverse range of geographic, cultural and academic backgrounds, it was clear that there would be no shortage of competition.

Our contestants began the semester with a virtual balance of $100,000 and with the task of constructing the best performing portfolio of ETFs. Students were afforded weekly rebalancing opportunities and were allowed to invest in 4 to 10 ETFs from the universe of U.S listed ETFs. The Fall 2017 portfolio challenge officially kicked off Monday, September 25th and concluded on Friday, December 8th. After 11 weeks of competition marked by frequent change atop our leaderboard, these 5 students emerged with the top performing portfolios -

Fall 2017 ETF Global® Portfolio Challenge Winners
Name
School
Class
Return
Ryan Hannifan
U of Wisconsin - Madison
2017
22.90%
Patrick Michael
Saint Joseph’s University
2018
21.52%
Edwin Lee
Rutgers University
2018
19.64%
Berenice Andaur
Pace University
2018
19.22%
William Zhu
U of California, Santa Barbara
2020
19.10%

The Fall 2017 winners were propelled to victory by a variety of timely and astute investment choices. As volatility continued to plumb new lows, technology and semiconductor stocks soared to record highs, oil prices rebounded and financials surged on the prospects of pro-growth tax reform during the course of our Fall competition, our winners shrewdly identified these trends and constructed their portfolios to take advantage of these developments. Investments in products such as ProShares Short VIX Short-Term Futures ETF (SVXY), Direxion Daily Semiconductor Bull 3x Shares (SOXL), ProShares UltraPro QQQ (TQQQ), VelocityShares 3x Long Crude Oil ETN (UWT) and Direxion Daily Financial Bull 3x Shares (FAS) enabled our winners to capture these trends and generate outperformance.

As the Top 5 Winners of this semester’s challenge, these students will be featured and recognized during the ETF Global® Portfolio Challenge Awards Ceremony at the upcoming Spring 2018 ETP Forum (www.etpforum.org) on Tuesday, April 24 at the New York Athletic Club. These students will also be joined by the rest of our top 25 finishers, who are all awarded free passes for their performance –

Fall 2017 Final Leaderboard 6-25
Name
School
Return
Si Young Choi
Hong Kong U of Science and Technology
17.84%
Brian Toy
Binghamton University
16.54%
Christopher Martinez
University of Texas – Rio Grande Valley
16.52%
Priyanka Saha
University of Houston
14.49%
Adam Ross
University of Detroit Mercy
13.73%
Mengqin Huang
Hong Kong U of Science and Technology
13.29%
Christopher Tie
University College London
13.06%
Paige Fairchild
University of Detroit Mercy
12.96%
Carolina Luna
Pace University
12.32%
Spiro Pliakos
University of Detroit Mercy
12.06%
Huarui Qin
University of Manitoba
11.88%
John Matthew Garcia
Fresno City College
11.64%
Luke Palmer
University of New Hampshire
11.60%
Anthony Calderone
Arizona State University
11.16%
Rafael Kusuma
Monash University Malaysia
11.13%
Holly Hedemark
University of Detroit Mercy
11.09%
Connor Pritchard
Arizona State University
10.85%
Ryan James
University of Wisconsin – Madison
10.83%
Huy Thang Chu
Erasmus University
10.68%
Ho Fan Wu
University of Buffalo
10.63%

An analysis of our students’ investments reveals an extremely research-intensive and knowledgeable group, as their investments ventured far outside the mainstream of the ETF ecosystem. Among the 2,000+ U.S. listed ETPs from 122 fund sponsors, our students invested in 813 products from 56 issuers. Of these 813 products, 67 were ETNs, 67 were inverse and 129 were leveraged based products. Their investments cut across blended, developed, emerging, and frontier markets. From an asset class perspective, our contestants favored equity-based products with investments in 578 equity ETPs or 71% of the total products invested in. Their asset class allocations were rounded out with 12% to fixed income products, 8% commodities, 4% multi asset, 3% currency, and 2% real estate.

Using our taxonomy, we were able to further examine how granular our students were with their product selections. In category, the first level of our taxonomy, our contestants invested in everything from broad equity and sector products to Swedish krona and Chinese renminbi based products. In focus, the second level of our taxonomy, our students’ ETF investments ran the gamut from financials and high yield to esoteric livestock and coffee focused products. Overall, here were the most traded securities in our fall competition -

















With each successive edition of the portfolio challenge, we continue to be more and more impressed by the ETF knowledge and investment skills of our student contestants. We look forward to hosting our sixth edition of the portfolio challenge in the Spring and continue to observe the enthusiasm for ETFs and investing talent our next group of students bring to bear.

Registration for the Spring 2018 competition will open on Monday, December 18.  For more information and to sign-up for the challenge, please visit: etfportfoliochallenge.com.

Thank you for reading ETF Global Perspectives!

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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.