Tuesday, June 20, 2017

Technology Stocks Continue to Define New Market Paradigm

Tuesday, June 20, 2017 - Stocks were mixed last week driven by various news headlines including a terrorist attack on GOP Congressional Members while practicing for a baseball game, an expected Fed Funds Rate increase of 25 bps, the retirement of Jeff Immelt from GE and the Friday surprise announcement by Amazon of its acquisition of the Whole Foods supermarket chain. US Equities continued their record climb with the Dow Jones Industrial Average hitting a new closing record of 21,384.28. The S&P 500 closed relatively flat at 2,433.15 and the NASDAQ Composite closed at 6,151.76. Crude oil prices eased to $44.74 a barrel - a drop of 2.4% for the week. Treasury prices firmed especially on the long end of the curve.

While easy money continues to fuel asset prices, markets shrugged off comments by noted observers that the US political process hit a new low with the early morning attack on GOP members. Friday, investors refocused on the big FANG Stocks after a brief slide and how these technology stocks will expand their footprint into new sectors bringing new efficiencies and compressing margins of existing retailers. Amazon is the lead disruptor in this space. Especially vulnerable are retailers and brand name manufacturers ranging from food condiments like spices, to razor blades and battery manufacturers like Duracell.

While Investors continue to hold out for the Trump “Reflation” trade, they now face headwinds from the usual Washington political stalemate as well as recession “yellow flags” like weak oil prices and a continued T-Bond price rally (where yields fell) indicating the Bond Vigilantes continue to see weak economic expansion.  Indeed airline delays and woes on the Amtrak Northeast corridor (its most popular line) signal the need for a big infrastructure spend. This week overseas investors will be focused on MSCI’s decision due this Tuesday on whether to include China A Shares into one of its flagship Emerging Markets Indexes. Expect continued saber rattling on the Korean peninsula and more clashes in the Middle East.

Market Rally skeptics continue to dwell on concerns that the popular indexes are being driven by a small number of tech stocks which carry a heavy weight in market cap weighted indexes such as the S&P 500, thus setting the scenario that they gain from momentum trades of active managers buying them while trying to keep up with the index returns. While this is true, investors will be reassessing how strong the “Moat” is around these FANG Stocks. We suspect the Moat’s sustainability factors are very strong and that, combined with cash on hand and high stock prices, will enable Tech firms to become more active in making acquisitions in non-technology areas as a means for earnings growth. These acquisitions will have long-term structural changes in certain sectors of the economy.

We continue to believe that the animal spirits unleashed by the excitement of the Trump Presidency are alive and well.  We continue to favor the Reflation trade and the proposed tax reform and relaxed financial regulations that could benefit sectors like select Financials, Restaurants, Utilities, Technology, and Healthcare Insurers – although significant risks abound in the healthcare sector with proposed reforms. Like healthcare, tax reform will not be easily resolved. Value Investors should include Energy stocks in their portfolio. Indeed our Quant Score list shows 10 of the top scoring funds as Energy funds and 4 of the top 10 Quant Movers for the past week were in Energy. The list includes IEO, RYE, XLE, IXC IYE, JHME, FILL, FXN, FENY, VDE, ERGF and FRAK.

Interesting Theme ETFs that look attractive from our models include OLD, FITS, SMH and XSD. We suggest looking over the ETFG Select List to zero in on attractive plays and sudden changes in our ratings outlook. We may be entering a period of market leadership changes within some sectors, so be sure to check the Quant Movers Daily.

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, June 12, 2017

Dawn of the DOL Rule

Monday, June 12, 2017 - Another week packed with political uncertainty throughout the world. Former FBI Director James Comey testified in front of congress after his dismissal from the position by President Donald Trump. Attorney General Jeff Sessions came under increasing fire for the Russian meddling claims and in the UK, Theresa May did not get the majority vote to keep the conservative party in control.

All of this news somehow overshadowed the start of a program that will create a paradigm shift for those who work on Wall Street. Last Friday, the first phase of the DOL rule went into effect which will now require brokers to create investment portfolios in the best interest of their clients. Though still under review and not going into full effect until January 1st of 2018, this rule is intended to define how brokers interact with their clients.

The markets mostly shoved off the political uncertainties with the S&P 500 finishing down only 4 points for the week and the Dow Jones finishing up about 90 points settling at 21,271. That was not the case however for Nasdaq and the overall tech sector in general. Late Friday afternoon the Nasdaq started to fall off, losing about 1.8% or 113.85 with the big names such as Facebook, Apple, Microsoft and Google accounting for most of the loses.

This caused the technology sector ETFs to subsequently fall off such as The Technology Select Sector SPDR Fund (XLK) which lost 1.42 points on Friday or 2.47% finishing at $56.02. Same goes for the First Trust NASDAQ-100 Technology Sector Index Fund (QTEC). It lost 2.40 points and subsequently closed at 64.40 or down 3.59%.

Our ETFG Quant Model however sees this slip up as a buying opportunity for the Tech Sector Funds. The highest rated fund in our daily updated reward scoring system is the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE). It comes in with a highly rated fundamental score with its P/E, P/CF and P/B all over 99 points out of 100. In our model that means that compared to the history of the fund, it is looking extremely cheap at the price it is currently trading at right now.

In our Quant Movers model we see some of the political uncertainties over seas hurting the scores of some international ETFs. The top two losers last week were the iShares Edge MSCI Min Vol Europe ETF (EUMV) and the WisdomTree Europe Dividend Growth Fund (EUDG) both losing 8.34 and 7.41 points to their overall scores respectively. They both are currently graded as “C.”

Let’s see what next week brings for the market but if the past is any indication of the future, who knows what will happen. A few things that are for sure, the Federal Reserve will come out with their next decision on a rate hike on Wednesday along with the Monthly Producer Price Index data and the Consumer Price Index data coming out on Tuesday and Wednesday. This will surely be watched closely by market participants and can be a true gauge the current health of the overall economy.

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.

Wednesday, June 7, 2017

ETF Global Model Portfolios now on HedgeCoVest Platform!

Wednesday, June 7, 2017 – ETF Global has partnered with HedgeCoVest LLC to add four new institutional-quality strategies to the HedgeCoVest Managed Accounts Platform and the SMArt Xchange (‘SMArtX’), a unified managed accounts platform available exclusively to SS&C Advent clients. The relationship with HedgeCoVest will offer access to the ETF Global® Dynamic Model Portfolios for Wealth Advisors utilizing the HedgeCoVest and SMArtX platforms.

“Inclusion on the HedgeCoVest platform continues our path of strategic expansion in the products and services offered while maintaining our unwavering commitment to delivering the best research, data and solutions in Exchange-Traded-Funds. We look forward to working with the entire team to deliver these strategies to leading Financial Advisors” said Chris Romano, Director of Research at ETF Global.

Utilizing its proprietary trading technology, HedgeCoVest allows clients to allocate in real-time to ETF Global's four “Base” strategies in a separately managed brokerage account. HedgeCoVest offers Advisors real-time performance reporting and intra-day liquidity for both traditional and alternative strategies, while taking advantage of the security and transparency of a managed account.

“We are excited to expand the selection of investment strategies available to Advisors, while remaining consistent with our approach of delivering high levels liquidity, transparency and security in the investment process,” said Evan Rapoport, CEO of HedgeCoVest. “Our vision and commitment to the highest industry standards are shared by ETF Global and we look forward to working with them to provide Advisors with these Model Portfolios of Exchange-Traded-Funds.

All four of the ETF Global® Dynamic Model Portfolios are now available through HedgeCoVest and its white-labeled SMArtX platform, including Aggressive Global Growth, Moderate Global Allocation, Balanced Global Growth & Income and Conservative Global Income strategies.

About ETF Global
ETF Global® (ETFG®) is a leading, independent provider of data, research, investment decision support applications, proprietary risk analytics and educational offerings for Exchange-Traded-Products.  The ETFG research platform, which is driven by the ETFG Multi-Factor, Quantitative Model (ETFG Quant), supports the overall investment process with a variety of strategies and applications to pursue return, manage risk, utilize investment analysis and generate investment ideas.

ETF Global services three primary client communities:
·         Investment Professionals: Financial Intermediaries, Financial Advisors, Investment Consultants, Financial Planners, Insurance Professionals, Annuity Professionals, Certified Public Accountants, Attorneys, Private Bankers, Private Wealth Managers
·         Capital and Middle Markets:  Capital Markets Desks, Trading Desks, Execution Management Systems, Order Management Systems, Algorithmic Trading Firms, Liquidity Providers
·         Institutional Investors: Asset Owners and Managers, Pension Funds, Endowments, Foundations, Family Offices, Hedge Funds, Mutual Funds, Commercial Banks, Insurance Companies, Broker-Dealers, Private Banks

Founded in 2011, the firm is headquartered in New York and maintains offices in both New York City and Pittsburgh, PA.  More information about ETF Global and our services, applications and products is available throughout our site, here at www.etfg.com.

About HedgeCoVest LLC
HedgeCoVest is the creator of an award-winning, real-time investment platform that revolutionizes the managed-accounts industry. HedgeCoVest’s proprietary trading technology empowers wealth advisors with traditional and alternative institutional investment management in unified managed accounts, while providing liquidity, transparency, security, and flat fees.

About the SMArt Xchange
The SMArt Xchange (“SMArtX”) is a next generation unified managed accounts platform open exclusively to clients of SS&C Advent. SMArtX combines HedgeCoVest’s proprietary trading and managed accounts technology with SS&C Advent’s powerful suite of tools for wealth advisors.

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, June 5, 2017

Continuing Investor Confidence

Monday, June 5, 2017 - Several major stock indexes around the world surged to record highs this past week, propelled by investor confidence in global economic growth and corporate earnings. These record gains were registered in the face of an increasingly precarious political backdrop. In addition to the escalating investigation into Trump-Russia collusion and its adverse implications for the passage of pro-growth legislation, political uncertainty was compounded this week by fraying transatlantic ties. After refusing to endorse NATO's collective defense clause, withdrawing from the Paris climate accord, and delivering a sharp rebuke of Germany's trade policies, the US longstanding cohesion and cooperation with EU countries was suddenly cast into doubt. The US increasingly inward looking foreign policy threatens to unsettle the close transatlantic relations that have underpinned the post-WWII international order and has added another layer of uncertainty to our already embattled administration. These developments occurred alongside the continued descent of oil prices, a downgrade in China's credit rating by Moody’s, a drop in US treasury yields to a seven month low.

Despite this rising undercurrent of political tumult and waning growth expectations signaled by the bond markets, the DJIA, S&P 500, NASDAQ joined global indexes like South Korea's Kospi and Germany's DAX to close at record highs on Friday. With the results from nearly every S&P 500 company being released, corporate earnings are up 14% from a year ago. Friday's job report, despite coming in slightly lower than expected, was received by investors as solid enough for the Federal Reserve to continue on its path of interest rates increases later this month. Additionally, global inflation, manufacturing, and other economic data releases pointed to continued, albeit slow, economic expansion. This surge in equities helped fuel another solid week of inflows for ETFs.

ETFG Fund Flow Summary - According to our fund flow summary, US listed ETFs attracted $13.6 billion is fresh inflows this week, bringing year-to-date inflows to over $200 billion. International equity ETFs continued to be a source of focus for investors, as they amassed $3.5 billion in creations this week. US equity ETFs reversed its trend of four consecutive weeks of outflows, after posting over $7 billion in creations. US fixed income ETFs also had a strong week with over $2 billion in inflows.

As domestic equity indexes rose to record highs this past week, it comes as no surprise that several of their index-tracking counterparts populate the top 10 inflows list this week. SPDR S&P 500 ETF Trust (SPY) was the leader in inflows this week, with over $6 billion in creations. PowerShares QQQ Trust (QQQ) finished 4th in inflows, with over $464 million, followed by iShares Core S&P 500 ETF (IVV) and Vanguard S&P 500 ETF (VOO), which finished 7th and 10th respectively with $352 and $294 million. The top 10 list was rounded out with several international ETFs, including iShares MSCI EAFE ETF (EFA) and Vanguard FTSE Europe ETF (VGK), and a couple of fixed income ETFs, like iShares 3-7 Year Treasury Bond ETF (IEI).

Continued worries over the enduring oil glut and a flattening yield curve, led several energy and financial based ETFs to register some of the largest redemptions this week. Energy Select Sector SPDR Fund (XLE) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP) posted the 3rd and 8th largest redemptions this week, with outflows totaling $203 and $130 million. SPDR S&P Regional Banking ETF (KRE) was 10th in outflows, as investors withdrew $116 million from the fund.

Although equity markets have proven to be incredibly resilient this year, they face a series of potentially destabilizing events this week. With former FBI Director James Comey's testimony, the ECB monetary policy meeting, and the UK's snap election all set to take place on June 8th, significant risks loom for the markets this 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.

Tuesday, May 30, 2017

Marching Higher

Tuesday, May 30, 2017 - A tragic terrorist attack in Manchester, Russia-US collusion claims escalating, possible links between North Korea and the major computer virus “WannaCry”, the second largest economy getting a downgrade on their debt and a stock market finishing the week in the green. Yes, those are all events that transpired last week, the last possibly being the biggest head-scratcher of them all as the Dow finished up almost 200 points, the S&P 500 up over 20 points and the Nasdaq just shy of a 100 point weekly gain. The market seems as if it is on a mission to continue its trek higher, no matter what the circumstances. In part, this may be attributable to earnings season finishing up with a revised forecast for the S&P 500 being expected to grow 13.9% from the same period last year, which would be the highest growth since 2011.

Speaking of growth, that is exactly what the ETF industry continues to do. Developed Market ETPs added over $3B last week through Wednesday according to our ETFG Fund Flow Summary. The fund flow summary also shows that in the last 30 days, investors have been taking money out of North American based ETPs and putting it into European based ETPs, removing $11B and putting in more than $5B respectively. A big recipient of this inflow has been the iShares MSCI EAFE ETF (EFA). EFA has taken in $3.36B in the month of May which is almost 5% of its total AUM. On the contrary, the SPDR S&P 500 ETF Trust (SPY) has been experiencing some significant outflows in the same time period. Over $10B has been taken out of the largest ETP in the month of May, accounting for about 4% of its AUM.

We see the same types of trends taking place in our ETFG Quant Movers. Some of the biggest gainers last week were non-US tracked ETPs including the Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (ASHR), the CSOP MSCI China A International Hedged ETF (CNHX) and the Global X MSCI Argentina ETF (ARGT). Each ETF gained 9.61, 9.04 and 8.05 points to their score respectively. In the Quant losers, we saw names like the iShares S&P 500 Value ETF (IVE), iShares S&P Small-Cap 600 Growth ETF (IJT) and the SPDR S&P Dividend ETF (SDY). These funds lost 7.10, 6.81 and 6.36 to their overall quant score respectively.

We will see what this short week of trading brings for the US stock market and if anything can knock it off of its continued trend upward. One thing to always look out for is the monthly payroll data that will come out for May on Friday. This is usually news that investors trade off of but then again that logic hasn’t been the case for quite some time.

From all of us at ETFG, we hope all of you had a great Memorial Day Weekend and thank our troops for the sacrifices they make every single day for us.

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, May 22, 2017

Sharp Twists and Turns

Monday, May 22, 2017 - The placid environment that has prevailed in the markets for much of the year came to an abrupt end this week, as an onslaught of political turmoil in Washington and abroad shattered market complacency and gave rise to fresh volatility. We began the week amid the fallout of Friday's unprecedented multinational cyberattack that infected nearly 300,000 computers in 150 countries. This large-scale ransomware attack, known as "WannaCry", paralyzed businesses and governmental organizations across the globe and raised broader questions about the vulnerability of existing cybersecurity infrastructure and the specter of future, more debilitating attacks. With these concerns percolating into the consciousness of investors, market uncertainty was compounded by the surprise dismissal of James Comey and new allegations that President Trump leaked sensitive intelligence to top Russian diplomats and had requested then FBI Director Comey to drop his investigation into former national security adviser Michael Flynn.

These revelations fueled the already escalating concerns of collusion between Trump and Russia and cast further doubt on the ability of our administration to pass its pro-growth agenda through Congress. In response to Trump's eroding political capital, treasury yields declined sharply, the dollar slid to a six month low, and S&P 500 suffered its worst single-day decline in eight months, shedding 1.8% on Wednesday. While markets stabilized somewhat towards the end of the week, emerging markets were dealt a blow as yet another presidential corruption scandal began to unfold in Brazil. Following Friday's close, the S&P 500 and DJIA were down 0.4% for the week, followed by the NASDAQ 100 which lost 0.6%.

Quant Movers - As cybersecurity concerns were at the forefront of investors’ minds this week, cybersecurity-focused funds, like PureFunds ISE Cyber Security ETF (HACK) and First Trust NASDAQ Cybersecurity ETF (CIBR), received a surge of interest. HACK and CIBR each experienced over 50% increases in their behavioral scores according to our ETFG Quant model, making them some of the top movers in this category for the week. Conversely, sentiment soured on funds perceived to benefit from Trump's policy proposals of deregulation, tax cuts, and infrastructure spending. SPDR S&P Insurance ETF (KIE), Industrial Select Sector SPDR Fund (XLI)Vanguard Financials ETF (VFH), and iShares Transportation Average ETF (IYT) all suffered heavy declines in their behavioral scores. Lastly, our Quant model underscores the changing fortunes of emerging markets stocks, as Brazil's corruption scandal precipitated a massive selloff this week. iShares Core MSCI Emerging Markets ETF (IEMG) experienced the largest drop in its quant score this week, followed by iShares MSCI Brazil Small-Cap ETF (EWZS)iShares Emerging Markets Dividend ETF (DVYE)WisdomTree Emerging Markets SmallCap Dividend Fund (DGS), and PowerShares DWA Emerging Markets Momentum Portfolio (PIE).

Against a backdrop of heightening political uncertainty, volatility seems poised to return to the markets. We suggest reviewing the ETFG Red Diamond Risk and ETFG Green Diamond Reward ratings to help manage risk in your portfolio and zero in on funds that offer attractive risk-reward profiles.

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.

Friday, May 19, 2017

ETFG Welcomes Chris Ohmacht to the Research Advisory Board!

Friday, May 19, 2017 - This week marks an exciting one for ETF Global as we announce the latest addition to our Research Advisory Board (RAB).

As the firm continues to further build its already dynamic Research Advisory Board, we are thrilled to announce that Chris Ohmacht has joined the ETF Global RAB. Chris has an incredibly accomplished background within financial services which will complement the insights provided by the current Research Advisory Board.

Below please find Chris' Bio and please join the ETFG Team in welcoming him to our Research Advisory Board!

Chris Ohmacht, CFA
Founder, CAO Strategic Partners

Chris is the Founder and Managing Partner of CAO Strategic Partners, LLC an investment firm focused on active investments in small to mid-sized private companies and value-added real estate.

Prior to founding CAO Strategic Partners in 2016, Chris was President and a member of the Board of Directors of Victory Capital, a $36 billion, independent, multi-boutique asset management firm with 9 independent investment platforms and over 200 employees focused on active developed and emerging markets equities, core fixed income and quantitative strategic beta strategies for institutional separate accounts, US mutual funds and ETFs.

Over his close to 30-year career in investment management, Chris has held numerous senior roles building and leading investment and distribution teams. He has also led several significant M&A transactions as both buyer and seller and strategic initiatives focused on maximizing growth, operational improvements and driving cultural change.

Chris earned his BA in Management from Moravian College, MBA in Finance from Pace University and is a CFA Charterholder. He is a founding member of the Board of Directors for the Metro NY Chapter as well as a member of the national Investor Board for the Gift of Adoption Fund and is a past Trustee of Moravian College.

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.