Thursday, October 18, 2018

Calling All Hedge Funds - Rocktoberfest ALTSO

Thursday, October 18, 2018 – Please come out and support a worthy cause produced by our good friends at ALTSO – A Leg To Stand On

Hedge Fund Rocktoberfest
ALTSO’s signature Hedge Fund Rocktoberfest event in NYC unites more than 1,400 leaders from the hedge fund and finance industries for a night of rock & roll and acoustic music performed by industry professionals – to help treat more of ALTSO’s children.

Thursday. Oct 25, 2018/6 pm - 11 pm
Hard Rock Cafe Times Square
ALTSO is an NYC-based non-profit organization working in the developing world, bringing free orthopedic care to children with untreated limb disabilities whose families cannot afford treatment. Our goal is to provide high-quality continuous care until the age of 21 for all patients treated under ALTSO’s program. Since 2003, through local treatment providers in Asia, Africa and Latin America we've provided free orthopedic care to more than 17,000 children in need. Join us to help level the playing field.

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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, October 15, 2018

Volatility and Volatility Subdued

Monday, October 15, 2018 – The word "crash" made several appearances in the headlines last week, and while this may be useful in selling newspapers or attracting clicks, it's often not an accurate characterization of the market’s environment. Yes, the stock market fell sharply, producing the worst week for equities since late-March. However, this brief decline still leaves the market 5.7% below its all-time high, a not-too-shabby metric.

What started as a bout of sector rotation out of technology and into late-cycle favorites like bank stocks shifted into a full-blown retreat on Wednesday and into Thursday as the carnage at the top of the S&P 500 pushed it out of its uptrend channel. The CBOE Volatility Index (VIX) spiked and hit its highest level since late March on Thursday with the Dow falling more than 1,300 points in two days and the S&P 500 retreating about 4.2% for the week.

The third quarter earnings season began on a mixed note on Friday morning when big banks JPMorgan Chase (-1.1%), Citigroup (+2.1%), and Wells Fargo (+1.3%) reported Friday before the opening bell. The financial sector added as much as 1.6% following bank earnings, but eventually rolled over, bringing the broader market with it. The group did rebound in the final stretch, closing higher by 0.1%. It also must be noted that 10 of 11 sectors finished in the green and information technology was the top performer with a gain of 3.2%.

Within the tech sector, giants Apple (+3.6%) and Microsoft (+3.5%) outperformed, as did chipmakers, evidenced by a 2.0% jump in the Philadelphia Semiconductor Index. Meanwhile, in the communication services sector (+2.1%), Netflix (+18.46) rallied 5.8% after Citigroup said its recent tumble represents a buying opportunity. Investors ought to utilize ETFG's Equity Exposure Summary, to compare these best opportunities: Communication Services Select Sector SPDR Fund (XLC), Vanguard Communication Services ETF (VOX) and iShares Global Communications Services ETF (IXP).

ETFG Weekly Select List - To best support the ETF selection process, The ETFG Weekly Select List highlights the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Industrials and materials stocks performed worst this week, while utilities stocks fared best. Because of the sector’s success this week, it is important to note substantial movements in the Utilities subsection when comparing the most current Select List to last.

Although the top slot remained constant and Fidelity MSCI Utilities Index ETF (FUTY) came in at number 1, Utilities Select Sector SPDR Fund (XLU) clinched the second highest position. There was also substantial turnover in the third and fifth spots when the funds John Hancock Multifactor Utilities ETF (JHMU) and Vanguard Utilities ETF (VPU) made an appearance, respectively.

For full coverage of this week’s ETFG Weekly Select, one can download from our site or click here: ETFG Select List - October 15, 2018

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.

Monday, October 8, 2018

Winds of Change?

Monday, October 8, 2018 – Happy Columbus Day and the weather isn’t the only thing cooling down this fall season. In a move that mirrored the beginning of the year, equity markets took a drop last week due primarily to the rising rates of the 10-year treasury yield. The Dow Jones Industrial Average dropped over 200 points to 26,447 while the S&P 500 took a 50 point hit. The Nasdaq Composite was by far the biggest loser of the week falling over 300 points, a decline of about 3.2%, as Tech stocks led the way.

In ETFs, banking and tech ETFs saw some of the greatest outflows in this first week of October, according to our ETFG Fund Flow summary. One of the ETFs that took the biggest hit was  FTXO, the First Trust Nasdaq ETF. In the month of October, FTXO has lost just under $1B or about 43% of its AUM. QQQ, which is Invesco’s Nasdaq Composite ETF, has followed suit with outflows of over $700m or 1.14% of its AUM.

ETFG Quant Movers - In the ETFG Quant Movers, we saw risk averse ETPs gain the most percentage points to their overall scores. The Cambria core equity ETF (CCOR), Credit Suisse S&P MLP ETN (MLPO) and the JPMorgan Diversified Return International Currency Hedged ETF (JPIH) added 20.51%, 19.90% and 18.71% to their overall Quant scores respectively.

In the Losers column, we saw international based ETPs dropping several percentage points to their overall score. The VictoryShares International High Dividend Vol. Weighted ETF (CID), Schwab Emerging Markets Equity ETF (SCHE) and the iShares Edge MSCI Min Vol Europe ETF (EUMV) lost 20.81%, 19.67% and 15.86% to their overall scores respectively.

ETFG Weekly Select List - the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Because of the sector’s success in the major indexes this week, we’d like to highlight some substantial movement in the Consumer Discretionary portion when comparing this week’s Select List to last. The Columbia Emerging Markets Consumer ETF (ECON) jumped up two spots to be the top ranked fund in the sector. It took over for the Invesco Dynamic Leisure and Entertainment ETF (PEJ) which is now in the 4th ranked spot. The SPDR S&P Retail ETF (XRT) held steady at the 2nd spot for two consecutive weeks while the Invesco Dynamic Retail ETF (PMR) moved up to 3rd place. The biggest change in the sector was (FXD), the First Trust Consumer Discretionary AlphaDEX Fund, which jumped into the 5th ranked spot knocking out the John Hancock Multifactor Consumer Discretionary ETF (JHMC).

For full coverage of this week’s ETFG Weekly Select, please see here: ETFG Select List - October 8, 2018

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.

Tuesday, October 2, 2018

4Q 2018 Rebalance – ETF Global® Dynamic Model Portfolios

Tuesday, October 2, 2018 - This summer may have been dominated by the three “T’s” of tariffs, trade wars and Trump, but if you only studied the markets you’d be hard put to tell anything was amiss as investors who heeded that sage advice to “sell in May and go away” were once again disappointed. Strong performance by Large-Cap names in the industrials, healthcare and technology sectors helped lift the S&P 500 to new heights as the index closes in on the 3,000 mark, but stocks might have caught an early chill as September closed out on a weak note. The most visible culprits might be interest rate sensitive financials and utilities, but weak showings by Alphabet (GOOG, GOOGL) and Facebook (FB) along with a flat return for Amazon (AMZN) once again confirm the dangers of a market-cap weighted index in the late stages of a bull market.

Perhaps that’s why our ETFG Dynamic Model Portfolios continue to favor equally-weighted and Small-Cap funds in the most recent reconstitution which was completed on October 1st. All 4 of the base portfolios and the 8 “tilts” were updated and for the first time in recent memory, the domestic sleeve of the portfolio remains relatively static with only minor changes to the positioning of the funds without impacting their overall makeup. All four of the funds from the third quarter allocation, the Direxion NASDAQ 100 Equal Weighted Fund (QQQE), the SPDR S&P 400 Mid Cap Value ETF (MDYV), the SPDR S&P 600 Small Cap Value ETF (SLYV) and the SPDR S&P 600 Small Cap ETF (SLY) return for another quarter with QQQE holding onto its top spot in the line-up once again. The only significant change was a shift towards more Small-Cap exposure with MDYV’s weight in the portfolio dropping as higher sentiment scores raised SLY and SLYV’s overall ETFG Quant scores.

While U.S. equities (and our domestic sleeve) may have been a sea of calm in the third quarter, international ETFs continued to struggle despite a seesawing dollar. But while international funds as a whole may have underperformed, the dynamics of individual markets and currencies mean there were several bright spots for discerning investors as certain funds did quite well including iShares MSCI South Korea ETF (EWY) along with a number of Asian funds including iShares MSCI Japan (EWJ) and iShares MSCI Taiwan (EWT) although the biggest winner for the quarter was the iShares MSCI Poland ETF (EPOL) up over 9.5%!  The key criteria for their success seems to come down to the third of our “T” factors, President Trump, as all four are considered increasingly important U.S. allies in the burgeoning trade war.

That trade war may explain the on-going shift in the international, developed sleeve as three of the four funds left after the end of the quarter with only EWY remaining in the program. The new funds in the allocation give it a decidedly European flair thanks to the addition of the SPDR STOXX Europe 50 ETF (FEU) along with the iShares MSCI Italy ETF (EWI), which has suffered over the last few months as their new government, led by the Five Star Movement, enacts a more populist agenda at odds with the E.U.’s focus on balanced budgets. The net result is likely to be more short-term pain, although the high sentiment and fundamental scores could add more fuel to the fire of an eventual rally, if the Italian government’s deficit spending plans help ignite a period of stronger growth much as it has here in the U.S.

Finally, our emerging markets allocation also saw noticeable changes as the iShares MSCI Emerging Markets ETF (EEM) was replaced by the iShares Latin America 40 ETF (ILF), which offers a more direct approach to two of the better performing markets over the last quarter, Brazil and Mexico. Whether that performance continues is likely going to be driven by politics, including the winner of the upcoming Brazilian election, although recent polling suggests that voting will likely extend to a second round. That could create more volatility and opportunities, as the situation develops in October.

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

_____________________________________________________________
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, October 1, 2018

Tesla Thrill Ride

Monday, October 1, 2018 – U.S. stocks finished Friday little changed, securing big gains for the third quarter. The S&P 500 kept near its flat line throughout the session, closing just a tick below its unchanged mark. The Nasdaq and the Dow added 0.1% apiece. For the quarter, the S&P 500 added 7.2%, the Dow added 9.0%, and the Nasdaq added 7.1%. Financial shares fell once again on Friday (-1.1%), extending the heavily-weighted financial sector's weekly loss to 4.1%. On the flip side, the lightly-weighted real estate (+1.3%) and utilities (+1.5%) sectors rallied, closing atop the sector standings. Conversely, the newly-added communications services sector was the top performer with a weekly gain of 1.1%.

The headlines weighed on Tesla as well, when TSLA tumbled 13.9% after its CEO, Elon Musk, was sued by the SEC over his tweet about taking the electric automaker private. Mr. Musk and the SEC were reportedly close to reaching a no-guilt settlement that would have barred him from being chairman for two years, but Mr. Musk backed out at the last minute. Investors should expect an ETF Sell off and can examine these movements by utilizing ETFG’s Equity Exposure Summary. Three of five top ETFs which own Tesla include ARK Industrial Innovation ETF (ARKQ), ARK Innovation ETF (ARKK) and ARK Web x.0 ETF (ARKW) all down approximately 1% have a weighting of 11.06%, 9.91% and 7.91% respectively.

ETFG Quant Movers - Regular readers know that we rank U.S listed, equity ETFs based on several forward-looking indicators which offers a powerful tool for investors who are either seeking confirmation of a move or as a contrarian indicator for future trends. EM equity funds in our ETFG Behavioral Top Scorers list favored more broad market with the Schwab Emerging Markets Equity ETF (SCHE) coming in at #23 while the granddaddy of all EM funds, iShares MSCI Emerging Markets Index Fund (EEM), was at #63. Nor was the strong showing confined to just broad-based funds with iShares MSCI Brazil ETF (EWZ) at #14 and multiple China funds making the cut with iShares China Large-Cap ETF (FXI) and iShares MSCI China ETF (MCHI) both appeared in the top 25.

ETFG Weekly Select List – This weekly report features the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

After tepid movements on Wall Street we saw an astonishing amount of consistency within the ETFG Weekly select List. SPDR S&P 600 Small Cap Value ETF (SLYV), iShares Nasdaq Biotechnology Index Fund (IBB), AdvisorShares Dorsey Wright ADR ETF (AADR), iShares MSCI EAFE Value Index Fund (EFV), Fidelity MSCI Telecommunication Services Index ETF (FCOM) and SPDR KBW Insurance ETF (KIE) all maintained the top rating in their respective categories. Those categories in order are Small Cap, North America, Global Ex-U.S., Developed Markets, Telecommunication and Financials.

For full coverage of this week’s ETFG Weekly Select, please see here: ETFG Select List - October 1, 2018

Thanks 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, September 24, 2018

Tariffs Aside

Monday, September 24, 2018 - Resilience is the name of the game and the markets have come to play. Last week, the Dow Jones Industrial Average led the way out of the 3 major US indices with a gain of about 600 points to 26,743. The S&P and Nasdaq Composite also found themselves in the winner’s circle for the week gaining about 40 and 23 points respectively. This all happening while the Trump Administration imposed a 10% tariff on $200 Billion more of Chinese products showing how strong this bull market continues to be.

In ETFs, Equity based developed markets received some of the largest inflows this week, taking in over $18B by Wednesday, according to the ETFG Fund Flow Summary. One of the ETFs that has been reaping the benefits of inflows is VOO, the Vanguard S&P 500 ETF. In the month of September, VOO has taken in over $6B or about 6% of its AUM. IVV, which is iShares version of the S&P 500 ETF has followed suit with the second highest inflows with just over $4B.

ETFG Quant Movers - In the ETFG Quant Movers, Asian-based ETFs saw the biggest gains to their scores. The WisdomTree Dynamic Currency Hedged Japan Equity Fund (DDJP) and the Invesco Golden Dragon China ETF (PGJ) added 9.56 and 9.23 points to their overall Quant scores respectively.

In the losers column, we saw safe haven types of funds dropping some points to their overall score. The WBI BullBear Rising Income ETF (WBIA), Invesco Variable Rate Preferred ETF (VRP) and the SPDR S&P Dividend ETF (SDY) lost 10.51, 7.27 and 6.91 points to their overall scores respectively.

ETFG Weekly Select List – this weekly report features the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Because of the sector’s success in the major indexes this week, we’d like to highlight some substantial movement in the Consumer Discretionary sector when comparing this week’s Select List to last week’s. Invesco Dynamic Leisure and Entertainment ETF (PEJ) jumped up one spot to be the top-ranked fund in the sector. It took over for the Columbia Emerging Markets Consumer ETF (ECON) which is now in the 2nd ranked spot. That moved the Invesco Dynamic Retail ETF (PMR) to 3rd place, down from the second ranked spot last week while the 4th and 5th spots, SPDR S&P Retail ETF (XRT) and Fidelity MSCI Consumer Discretionary ETF (FDIS) remained the same.

For full coverage of this week’s ETFG Weekly Select, please see here:   ETFG Select List - September 24, 2018

Thanks 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, September 17, 2018

GICS Changes and More Big Headlines

Monday, September 17, 2018 – The fickle nature of stock market sentiment was on full display this past week, as investors brushed off lingering, unresolved trade tensions to propel all 3 major indexes to weekly gains with the DJIA, S&P 500, and Nasdaq up 0.9%, 1.2%, and 1.4% respectively. Despite the looming imposition of 25% tariffs on an additional $200 billion of Chinese imports and a still wide gulf in trade renegotiations between the U.S. and its trading partners, apparent headway made with Canada and China helped buoy the major indexes for the week.

News that the US and China will be holding high level economic talks at the end of September and the subsequent boost in sentiment, belies the fact that are still a slew of key issues that need to be reconciled, of which neither the U.S. nor its trading partners have indicated any willingness to alter or moderate their conflicting positions. Among these outstanding disputes are the forced technology transfers, subsidization of state industries, and market restrictions imposed by the Chinese government and the future of dispute resolution panels in a revised NAFTA. Until these differences are bridged, the prospect for any meaningful reduction in global trade tensions is limited.

ETFG Quant Movers – This week's list of top ETFG Quant gainers is overwhelmingly populated with international focused funds, illustrating that despite current trade frictions, opportunities still exist for discerning investors. From 1-10, this week's top gainers were DGT, RNDM, IGT, IVLU, VEU, MFDX, IEUR, MLPG, FJP, and EUDG.

By the same token, as this week's list of top quant losers demonstrates, investors need to maintain a watchful eye when looking for opportunities in international markets as nearly half of this week's list have an international focus. The ETFs suffering the largest quant score declines were BRD, SDIV, SBIO, KBWD, PIN, VPU, SCJ, IPAY, MOM, and TTFS.

Looking Ahead - Arguably the biggest headline event in the upcoming week will be the introduction of the new GICS communications sector. In its largest reorganization ever, Wall Street's widely followed industry classification system will be reshuffling its consumer discretionary, telecommunications, and technology sectors to form a new communications sector on September 21st. Meant to reflect the evolution of the modern economy, the GICS overhaul will involve the migration of several bluechip names, including Facebook, Alphabet, AT&T, and Netflix, to this newfangled sector. Given the proliferation of index tracking funds and the market-leading position of many of these affected stocks, this taxonomy change will have critical implications for investors. All told, this change will reconfigure about 10% of the S&P 500's market cap and force passive managers who are benchmarked to these sectors to reallocate billions of dollars.

Although some preventive measures have been taken, such as State Street's launch of the Communication Services Select Sector SPDR Fund (XLC) in June and Vanguard's implementation of transition indexes and gradual fund rebalancings in May, some volatility will certainly be unleashed by this change. As this shift will prompt fund managers to offload or add major positions, investors in mutual funds will likely be hit with capital gains distributions. However, for ETFs investors, this move will reinforce one of the central benefits of the ETF structure - the in-kind creation/redemption mechanism, which will largely shield or limit capital gains.

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