Wednesday, August 16, 2017

New-to-Market: Virtus Enhanced Short U.S. Equity ETF (VESH)

Wednesday, August 16, 2017 - New-to-Market: This blog series highlights ETFs that have recently gone public and reflect those strategies currently most in demand by investors. While ETFs are not eligible for ETFG Risk Ratings until traded for 3 months and ETFG Reward Ratings for 12 months, our goal is to highlight cutting-edge investment strategies that have recently embraced the ETF structure – we hope you enjoy this special series of posts!

With over 2,000 ETPs listed in the US with nearly $3 trillion in AUM, it’s easy to think that almost every unique trade strategy has a product tied to it, but, the truth is that innovative products are often hard to find. The industry has come a long way from the standard index replicators; the strategic funds formerly known as “smart beta” have soaked up billions in new assets this year while social impact and multi-factor ETPs are all the rage. There was even a short period of time where 4x funds looked like the coming thing, but it seems that most new funds are simply variations on an existing theme; a different index here or an alternative weighting system there.

A number of the ETPs on our list of recently launched products stood out to us, but one in particular, the Virtus Enhanced Short U.S. Equity ETF (VESH) might serve one of the most challenged segments of the ETP markets. Eight years into the second-longest lived bull market in history has made short selling less a “lonely” activity and more “suicidal” as tacking against the euphoria has generally been a career killer, leaving only a handful of funds for investors to choose from. Our database has 138 inverse products with a total AUM of almost $20B and excluding the levered ETPs, intended for short-term protection, brings the list down to 57 products with a total AUM of just $6.5B. Looking at funds that only give you exposure to the equity market, reduces the list of ETPs even further to only 26 leaving to risk-conscious investors decidedly lacking in options.

The Virtus Enhanced Short U.S. Equity ETF (VESH) does things a little differently than most of the existing inverse equity ETPs in two unique ways. Levered or not, nearly all of the inverse equity products are passive funds that track specific, well-known market cap based indexes except for the AdvisorShares Ranger Equity Bear ETF (HDGE), an actively managed product that shorts individual equity names based on bottoms-up stock research.

While VESH is also actively managed, it’s strategy is ‘rules-based’ and more in-line with its passive kin but while employing a more nuanced strategy than larger inverse funds. In fact, if those rules were wrapped into an index that went long instead of short, VESH would look more like a strategic beta fund that did sector positioning based on the popular momentum factor than anything else, except its focus is obviously on negative rather than positive momentum.

Bringing strategic beta to the world of inverse ETPs might seem like simple evolution but Virtus has long been in the forefront of bringing the best of academia to the market. In most of the academic research around factor investing, researchers use market neutral strategies to test the viability of the factor which involves taking both long and short positions based on the factor being tested. Up until now, most ETPs have only used the long side of that research given that most investors, big or small, are typically only interested in long exposure. Recognizing an underserved market, Virtus has taken the unique position of giving investors exposure to the other side of the research in that short portfolio to produce potentially more symmetrical returns.

Launched in late June of this year, Virtus brought the fund to the market with a simple goal; outperforming 100% of the total return of the S&P 500 Index and it does so by recognizing that, in the eyes of investors, not all sectors of the market are created equal. First, investors need to recognize that the fund is essentially two strategies rolled into one, with 50% in a monthly rebalanced short position against the S&P 500 while the remaining 50% is built around a sector rotation strategy, perhaps one of the most common and easily recognized investment strategies used by investment professionals. Rather than focusing on individual names like HDGE, at the end of each month, the GICS sectors comprising the index are ranked by their trailing 9-month returns with the 5 worst performing sectors being identified to be sold short using futures contracts removing the nonsystematic risk of individual stocks while simultaneously embracing a more contemporary strategy.

While the newly launched fund lacks a track record, it’s easy to see the potential advantages of such a strategy, especially in a market like we find ourselves in where even a 5% correction has become a distant memory. While the 50% of the portfolio invested in short S&P futures should help traders focused on hedging by keeping the fund in-line with the broader market, the other half focused on specific underperforming sectors could potentially reduce the drag of an inverse position on a broader portfolio in a rising market.

Even in a year like 2017, there remains a wide degree of dispersion between sector returns with energy stocks deep in the red while real estate and consumer staples names continue to lag the broader market by hundreds of basis points. This dynamic, in part, helped VESH narrow its loss in its first full month of trading with a 1.17% loss in July compared to a -1.91% return for the unlevered ProShares Short S&P 500 Fund (SH).

But it’s also easy to imagine how that could quickly lead to investors finding themselves with large, unintentional sector wagers as most of 2017’s laggards are in the smaller subsectors of the market. Energy stocks may be the biggest losers this year but make up less than 6% of the market while real estate and consumer staples stocks, the next two worst performing sectors, make up 3.5% and 8.5% of the market respectively. To keep that from happening, the short positions are weighted proportional to how much they make up of the S&P 500.  In its first full month of trading, VESH was short all three of the above sectors along with healthcare and utility stocks and while investors might have wished for more energy exposure, the fund’s rules based weighting system kept the allocation just under 8% of the total fund.

The other thing that VESH does differently than most inverse products is that it doesn’t have the daily reset that SWAP based products contain. The daily reset that SWAPs go through is what causes the divergence between their expected daily return target and their longer time frame returns. This reset compounds daily moves. Using fully collateralized futures positions that are rebalanced on a monthly basis, Virtus is trying to provide a product that can be held for a longer time frame while minimizing any divergence between the product and its target exposure of outperforming -100% of the total return of the S&P 500 Index.

Finally, while the product is actively managed, it also has a relatively low management fee of 55 bps. This puts the product closer to the majority of long-only, passive strategic beta funds rather than existing short strategies which usually come with a higher price tag. In fact, VESH’s 55 bps fee is substantially below both actively managed HDGE (175 bps) or passive funds like SH at 89 bps, which significantly reduces the potential cost for those more anxious investors to hedge their equity exposure.

So even if the broader market’s relatively flat performance, despite a summer of perpetual crisis in Washington and sabre rattling overseas, has some wondering whether we’ve reached a new “permanently high plateau,” know that a firm at the cutting edge of investment research has used the lessons of strategic beta to bring the first truly innovative inverse product to a market that might soon desperately need one.

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.

Monday, August 14, 2017

Fire, Fury & the VIX

Monday, August 14, 2017 - The global markets were met with Fire and Fury this week as political tensions between the US and North Korea continued to escalate. Major indexes closed mostly down for the week as corporate earnings and employment reports took a back seat in the news due to the rhetoric that North Korean Dictator Kim Jong Un and President Donald Trump have been spewing back and forth to one another.

The Dow Jones and Nasdaq finished off about 100 points each and the S&P 500 about 30 even after they pared their low points of the week with a day in the green on Friday. The political fears were not only seen by overall market prices dropping but also in the VIX index, which is used as Wall Street’s fear gauge by many. It surged over 62% this week alone and hit levels that were last seen in November during the presidential election.

Some ETFs felt obvious pressure from the growing tensions around nuclear warfare. The Deutsche x-trackers MSCI South Korea Hedged Equity Fund (DBKO) and the iShares MSCI South Korea Capped ETF (EWY) both finished lower this week due to the uncertainty as South Korea shares a peninsula with ground zero if there was any military action to take place.

Elsewhere in the ETF world, our Quant movers saw some undervalued funds in the healthcare and Biotechnology space. VanEck Vectors Biotech ETF (BBH), First Trust NYSE Arca Biotechnology Index Fund (FBT) and the Fidelity MSCI Health Care Index ETF (FHLC) all made the top 10 in gains to their overall reward score moving up 7.83, 5,32 and 4.83 respectively.

On the loser’s side, we saw scores drop in small-cap and dividend funds as our model has seen some less favorable characteristics of those funds. ETFs like the Vanguard Small-Cap ETF (VB)WisdomTree Europe Hedged Small Cap Equity Fund (EUSC), WisdomTree Europe Dividend Growth Fund (EUDG) and the FlexShares International Quality Dividend Defensive Index Fund (IQDE) lost 8.40, 8.15, 7.78 and 7.56 to their overall scores respectively.

We will see how the markets will continue to react to the geo-political tensions and now some new ones domestically here in the United States with major protests in Virginia breaking out over the weekend. One thing is for sure, there is only so much straw that you can place on the camel’s back before you break it. When will the finally straw finally fall?

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.

Monday, August 7, 2017

Who Would Have Thought....

Monday, August 7, 2017 - The beginning of 2017 brought some hot topics to the forefront. In the political world, it was if President-Elect Donald Trump could live up to his promises as the new Commander-in-Chief, that discussion is ongoing and will be for years. In the financial world, it was whether the Dow Jones Industrial Average could eclipse the 20,000 mark and more importantly hold its ground there. That topic of discussion ended quickly and only 8 months later, there is talk of Dow 25,000.

As markets continue to move higher, they are being supported more by corporate earnings rather than shifting changes to our economic policies, which many thought would drive the markets, i.e., the Trump Trade. This week, big tech was what helped bring the Dow over 22k as Apple reported strong earnings and added 49 points to the blue chip index on Wednesday.

Apple also helped moved some ETFs higher, like the Technology Select Sector SPDR Fund (XLK), which closed at 57.61 on Friday, a level that the fund hasn’t seen since 2000. XLK is heavily weighted with Apple as it makes up for 14.73% of the fund which has a total of 87 holdings. The iShares U.S. Technology ETF (IYW) which has the largest overall allocation to Apple in any fund, 17.18%, reached all-time highs this week for the same reason as it closed at 145.96 on August 1 (it closed the week out at 145.90.)

In our Quant movers, we saw anything but technology funds gaining momentum. iShares Edge MSCI Min Vol Global Currency Hedged ETF (HACV), Guggenheim Shipping ETF (SEA), Deutsche X-trackers MSCI All World EX us High Dividend Yield Hedged Equity ETF (HDAW) and iShares Global Utilities ETF (JXI) all saw the biggest jumps in their overall reward scores with gains of 9.24, 8.87, 7.52 and 7.36 points in the past week respectively. This may show a shift in that value oriented investments may look like the best play in the short term.

In the Quant losers last week, many of Fidelity’s funds took a hit. Their MSCI Information Technology (FTEC), MSCI Health Care Index ETF (FHLC), MSCI Consumer Staple Index ETF (FSTA) and MSCI Energy Index ETF (FENY) led the way losing 9.64, 9.35, 9.13 and 9.00 points to their overall score respectively.

Let’s see if the markets can keep up their momentum during these dog days of summer. Who knows maybe we will be talking about the Dow 30,000 sooner than we think!

Thanks 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, July 31, 2017

All in a Week

Monday, July 31, 2017 - Corporate earnings, FOMC rates decision and commentary, an unavailing health care debate, a tumultuous White House staff shake-up, U.S. Q2 GDP reading and an updated IMF global growth forecast helped govern this week's market action. With over half of the S&P companies having reported earnings by Friday's close, second quarter earnings are on pace to beat consensus estimates by 6.4% and rise 9.1% year-over-year.

Largely upbeat corporate earnings were accompanied by the Fed's July meeting, in which it decided to hold rates steady, signaled its intention to begin trimming its balance sheet, and conveyed some concern about recent underwhelming inflation numbers. The fed's increasingly cautious stance towards tightening monetary policy was interpreted as dovish by investors and supportive of equities in the near-term. Meanwhile, the collapse of the health care debate in the Senate and a chaotic week in the West Wing further clouded the outlook for growth-fueling tax changes and infrastructure spending. Lastly, an improved 2.6% second-quarter GDP growth reading was counterbalanced with a tepid inflation reading and downgrade to the US's growth outlook to 2.1% by the IMF.

All these developments provided a mixed backdrop for stocks this week and helped sustain the current Goldilocks environment. The DJIA outperformed the NASDAQ, as strong earnings from companies like Boeing helped it outpace its tech-heavy counterpart, which was dragged down by a selloff in technology shares. The DJIA finished the week up 1.2%, while NASDAQ slipped 0.2% and the S&P 500 was largely flat, falling less than 0.1%.

ETF Global Fund Flow Summary - Amid a week of robust earnings and an increasingly cautious fed, U.S. equity-based ETFs experienced heavy inflows, to the tune of $4 billion. Additionally, with a weakening dollar and improving global growth outlook, international equities continued to attract attention, as investors plowed $2 billion into the sector. Leading the week in inflows was the SPDR S&P 500 ETF Trust (SPY), drawing nearly $6 billion in fresh assets, followed buy iShares Core MSCI EAFE ETF (IEFA), which captured $734 million in inflows. Other S&P and large-cap based products were popular among investors, with the iShares Core S&P 500 ETF (IVV), iShares S&P 500 Growth ETF (IVW), and iShares Russell 1000 ETF (IWB) finishing the week 4th, 5th, and 6th in inflows, with $398, $303, and $289 million respectively in creations. Lastly, as the dollar continued its descent, international fixed-income ETPs denominated in local currencies became an attractive play, as the VanEck Vectors J.P. Morgan EM Local Currency Bond ETF (EMLC) ended the week 10th in inflows, with over $210 million in fresh assets. Conversely, as growth expectations lowered in the tech sector, the NASDAQ-100 tracking PowerShares QQQ Trust (QQQ) lead the week in outflows with nearly $2.6 billion in redemptions.

Another busy week is in store for the markets, as 130 companies from the S&P 500 are scheduled to report second quarter earnings. This, along with July's job report and the continued fallout from a White-House shake-up and healthcare setback, will likely command the attention of investors in the upcoming week.

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.

Wednesday, July 26, 2017

MILITARY TIMES BEST FOR VETS INDEX℠

Congratulations to our friends at Track One, Wilshire Associates and the Military Times on the below....

WILSHIRE EXPANDS CUSTOM CLIENT ‘POWERED BY WILSHIRE’ INDEX SUITE, ANNOUNCES AVAILABILITY OF MILITARY TIMES BEST FOR VETS INDEX

-- Track One’s Index Seeks to Measure Performance of Companies Most Supportive of Veterans

SANTA MONICA, Calif., July 19, 2017 – Wilshire Associates (Wilshire®) today announced the availability of a new custom client Powered by Wilshire℠ index, the Military Times Best for VETS Index℠. Created and owned by Track One Capital Services and calculated by Wilshire, the index is designed to measure performance of public companies most supportive of military veterans, service members and their families as identified by the Military Times Best for Vets: Employer annual rankings.

The annual employer rankings, upon which the index is based, leverage results of a broad survey effort which began in 2010 and incorporates metrics such as company culture, policies and reservist accommodations to compute an overall company score. The Military Times Best for VETS Index is constructed of those public companies that score highest, carry a market capitalization of $200 million or more, and have been included in the annual list for at least three consecutive years.

“Wilshire Analytics is extremely proud to help fuel this veteran-friendly Powered by Wilshire index offering from Track One. Wilshire’s calculation and analytical expertise combined with Track One’s innovative rules-based approach to measuring performance of companies most supportive of military veterans demonstrates the value of a Powered by Wilshire approach, which can help clients bring new investment index strategy ideas to market quickly,” commented Michael R. Kennedy, managing director at Wilshire Associates.

"We have for many years recognized the unique skill sets that our military veterans bring to the workplace. The Military Times Best for Vets Index now demonstrates the measurable benefit that these organizations reap," said Joseph Gelin of Track One Capital Services. "We consider the Military Times to be the most well-respected and authoritative brand with the veteran community and we are thrilled to be partnering with them and Wilshire."

For more information about the Military Times Best for VETS Index, please visit https://wilshire.com/indexes/poweredbywilshire/military-times-best-for-vets-index.


About Wilshire Associates
Wilshire Associates, a leading global financial services firm, provides consulting services, analytics solutions and customized investment solutions to plan sponsors, investment managers and financial intermediaries. Its business units include, Wilshire Analytics, Wilshire Consulting, Wilshire Funds Management and Wilshire Private Markets.

The firm was founded in 1972, providing revolutionary technology and acting as an early innovator in the application of investment analytics and research to investment managers in the institutional marketplace. Wilshire also is credited with helping to develop the field of quantitative investment analysis that uses mathematical tools to analyze market risks. All other business units evolved from Wilshire’s strong analytics foundation.

Wilshire developed the Wilshire 5000 Total Market Index and became an early innovator in creating integrated asset/liability analysis/simulation models as well as practical models in risk budgeting through beta and active risk analysis. Wilshire has grown to a firm of approximately 300 employees serving the needs of investors around the world.

Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing more than 500 organizations with assets totaling approximately US $8 trillion.* With ten offices worldwide, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality counsel, products and services. Wilshire® is a registered service mark of Wilshire Associates Incorporated. Powered by Wilshire℠ is a service mark of Wilshire Associates Incorporated.

Please visit www.wilshire.com for more information.
Follow us on Twitter: @WilshireAssoc

About Track One Capital Services
Since its inception in 2004, Track One Capital has provided strategic direction, leadership and capital to a select group of financial services companies. With an Investment Committee comprised of industry experts all with C-Suite, operating experience, Track One seeks unique opportunities to combine organic and inorganic growth for its portfolio companies within the financial services arena. The firm maintains offices in Los Angeles and New York.

Please visit www.trkone.com for more information.
Please direct all inquiries to info@trkone.com

Wilshire Media Contact:
Lisa Herbert
310-899-5325 (O)
310-728-5341 (C)

Track One Media Contact:
Eric Alexander
917-579-8055

Monday, July 24, 2017

Waning Momentum?

Monday, July 24, 2017 - Synchronized tightening of global monetary policies, a botched GOP healthcare overhaul and an intensifying FBI probe into Trump-Russia dealings have created an environment that is seemingly inimical to further equity gains. These recent unfavorable developments ostensibly pose a formidable threat to the underpinnings of the post-election rally.

However, despite waning pro-growth policy momentum, U.S. stocks continue to hit records this past week as major equity indexes continue to hover near records despite being confronted by this increasingly precarious political backdrop. Better than expected corporate earnings appear sufficient for now in the eyes of investors to surmount these political obstacles. The S&P 500, Nasdaq Composite, and Russell 2000 all registered record highs this week, finishing Friday's action at 2,471.54, 6,387.75, and 1,435.84 respectively. The Dow ended the week at 21,580.07, as it continues to remain near record territory.

ETFG Fund Flow Summary - As U.S. equity benchmarks soared to record highs, investors correspondingly poured money to their index-tracking ETF counterparts. iShares Core S&P 500 ETF (IVV) was the top asset-gathering fund this week, attracting $2.6 billion of inflows. PowerShares QQQ Trust (QQQ), the NASDAQ 100-tracking ETF, finished the week 5th in inflows with over $663 million in fresh assets. Global large-cap equities, which have experienced similar record gains, continue to attract fresh inflows. iShares MSCI Emerging Markets ETF (EEM) and Vanguard FTSE Developed Markets ETF (VEA) ended the week 6th and 7th in ETF creations, with over $596 and $546 of inflows.

ETFG Quant Movers - Amid continued investor enthusiasm for equities, our quant model is sending out a contrarian signal. Several large-cap equity funds appeared on our top weekly quant losers list. Topping the funds that experienced the largest weekly quant score declines was the iShares Russell 1000 ETF (IWB), followed by iShares Core S&P 500 ETF (IVV). Although fervor for U.S. equities remains resolutely high, our quant model signals reason for caution.

As we enter the final week in July, in which the FOMC is gathering for its July meeting and the preponderance of S&P 500 companies are set to report second quarter earnings, it will be interesting to see if investors continue to ignore political headlines and if this supportive corporate earnings backdrop continues to persist.

Thank you for reading ETF Global Perspectives.

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick

_____________________________________________________________
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, July 17, 2017

Summer Time Highs

Monday, July 17, 2017 - Last week was again another good week for the market - the S&P 500 and Dow Jones Industrial Average both reached record highs this week. The Dow Jones ended up gaining 1%, S&P 500 gained 1.4%, and NASDAQ did the best with a 2.6% increase. This week every sector posted gains except financials which was down by .52%.  Technology, Energy, and Materials lead the way with 3.36%, 2.17%, and 2.05%.

Janet Yellen made her semiannual testimony in front of Congress on Wednesday reiterating that the Fed was not going to tighten monetary policy. She expects a tightening labor market to lead to increased inflation. This was despite the inflation data released on Friday which reflected that inflation remained flat in June.

Trading volume on Thursday slowed down in anticipation of Friday, the start of the second quarter's earnings season. Several major banks released their 2Q earnings of which one was JP Morgan Chase - we'll skip the already well-publicized CEO rant. Their 2nd quarter earnings rose by 13% on Net Income of $7 billion. EPS were $1.82, outperforming the $1.59 estimated by analysts. The ETF Global exposure report shows that the biggest holders of JPM are  IYG, iShares U.S Financial Services ETF, XLF, Financial Select Sector SPDR Fund, and FNCL, Fidelity MSCI Financials Index ETF.  These products hold 12.01%, 10.79%, and 8.98% respectively. All 3 funds had roughly the same performance of .3% for the week.

ETFG Weekly Select List features the 5 most highly-rated ETFs by Sector, Geographic Region and Strategy as ranked by the ETFG Quant model. This week we had one ETF, JHMA John Hancock Multifactor Materials ETF, in the Basic Materials category move from being unranked last week to the top spot this week.  JETS U.S. Global Jets ETF was another big mover in the industrial category moving from 4th to 1st this week.

ETFG Quant Movers - the biggest movers this week were HAHA, CSOP China 300 A-H Dynamic ETF which had a  score increase by  19.15%, EPOL iShares, MSCI Poland Capped ETF which increased by  18.73%, and VXUS, Vanguard Total International Stock ETF which increased by 18.37%. On the other side of the spectrum, we had SEA, Guggenheim Shipping ETF, have the score dropped by 30.28%. XAR, SPDR S&P Aerospace & Defense ETF, lose 17.34%, and ACTX Global X Guru Activist Index 16.25%.

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.