Tuesday, February 19, 2019

Trends Continue...

Tuesday, February 19, 2019 - It was another huge week for Major US Indices as all 3 ended up more than 2%. This continued strength is quite remarkable as earnings season has not been one to write home about and talks of government shutdowns and national emergencies continue to shake main street. For the week, the Dow Jones Industrial Average finished up about 776 points or 3.1% while the S&P 500 gained 61 points or 2.5% and the Nasdaq Composite was up 151 points or 2.4%.

In ETFs, we continue to see outflows in major US index tracked ETFs. IVV, the iShares Core S&P 500 ETF, QQQ, the Invesco Nasdaq ETF and IWD, the iShares Russell 1000 ETF, lost assets of $6.93B, $2.88B and $1.86B respectively in the month of February. In inflows, investors continue to flock to fixed income ETFs with BNDX, the Vanguard International Bond Fund, taking in over $2.48B or over 25% of its AUM in the month of February, all according to our ETFG Fund Flow Summary.

In the ETFG Quant Movers, we saw international based ETPs gain the most percentage points to their overall scores. The CSOP MSCI China A International Hedged ETF (CHNX), the iShares MSCI Canada ETF (EWC) and the Global X Scientific Beta Asia ex-Japan ETF (SCIX) added 10.81, 9.27 and 9.19 to their overall Quant 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 Technology when comparing this week’s Select List to last week’s. The First Trust NASDAQ Semiconductor ETF (FTXL) held strong in the first overall spot while the Global X FinTech Thematic ETF (FINX) jumped up three spots to the second overall position. It took over for the First Trust Nasdaq Cybersecurity ETF (CIBR) which got knocked out of the top 5 this week by the ETFMG Drone Economy Strategy ETF (IFLY) which is now in the 4th ranked spot. The SPDR S&P Telecom ETF (XTH) jumped up one spot to the 3rd overall position and rounding out the bottom of the top 5 was the 3D Printing ETF (PRNT).

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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, February 11, 2019

Eking Out Gains

Monday, February 11, 2019 - Though volatile, the major US indices finished the week off not too far from where they started. A welcoming sign to the continued strength that the markets have seen since the start of the year even though there has been some stomach-churning headlines coming both globally and domestically.

For the week, the Dow Jones Industrial Average finished up about 50 points while the S&P 500 gained 5 points and The Nasdaq Composite was up about 34.

In ETFs, we saw major inflows into Emerging Market ETFs and Corporate Bond ones as well.  IEMG, iShares Core Emerging Markets ETF, took in more than 3.55B, about 8.5% of its AUM. VCSH and VCIT, both Vanguard Corporate Bond ETFs, also saw net flows of 3.01B and 2.57B respectively. In outflows, we continue to see money leaving major US index tracked ETFs. IVV and SPY, both of which track the S&P 500 have seen outflows of 7.25B and 7.07B in the month of February or over 4% and 2% of their overall AUM respectively.

In the ETFG Quant Movers, we saw volatility based ETPs gain the most percentage points to their overall scores. The VictoryShares US 500 Enhanced Volatility wtd ETF (CFO) and VictoryShares US EQ Income Enhanced Volatility wtd ETF (CDC) added 8.12% and 7.52% to their overall Quant 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 Industrials portion when comparing this week’s Select List to last. The First Trust NASDAQ Global Auto Index Fund (CARZ) jumped up one spot to the first overall position to be the top ranked fund in the sector. It took over for a fellow First Trust product, FTXR which got knocked out of the top 5 this week by the Fidelity MSCI Industrials Index ETF (FIDU) which is now in the 3RD ranked spot. The First Trust Global Engineering and Construction ETF (FLM) stayed put in the 2ND overall position. Rounding out the bottom of the top 5 were the SPDR Kensho Future Security ETF (XKFS) and the iShares Transportation Average ETF (IYT). They finished 4th and 5th respectively.

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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, February 4, 2019

Despite All Else

Monday, February 4, 2019 - Congratulations to the New England Patriots on their 6th Superbowl victory last night and to the LA Rams on a terrific season and a hard fought game.

Now let's take a look at the markets - Mixed economic signals have posed a constant conundrum for investors over the past year. This week offered no reprieve, as a myriad of conflicting developments helped perpetuate the all too familiar atmosphere of uncertainty. Nowhere were this year's divergent and muddling signals more evident than in this week's global economic growth readings and corporate earnings results. News that the eurozone economy grew at its slowest pace in four years in 2018 sent tremors throughout the market by fueling the increasing concerns about the viability of the global economic expansion, which seems to be deteriorating across a slew of systematically important countries. Formidable economic threats are looming such as Italy's nascent recession, Brexit hurtling towards a chaotic and unresolved deadline and economic contractions in major economies including Germany, China and France. These have all fanned fears of a further decline of confidence, rise of populist and isolationist governments, fraying global economic cooperation and an overall dim global outlook. However, this gloomy economic picture was counterbalanced by more positive U.S. developments, led by an increasingly dovish posture by the Fed and continued robust jobs and wage growth reflected in January's well-above consensus payrolls report.

Corporate earnings presented an equally perplexing dilemma. Initially, stocks fell after several bellwether companies, like Caterpillar and NVIDIA, posted weaker than expected Q4 results and cut their guidance due to the impact of the intensifying global trade conflict and Chinese economic slowdown. Mixed results from tech behemoths Apple, Microsoft, and Amazon further muddied the picture. However, strong results from energy stalwarts Exxon Mobil and Chevron, along with the Fed's emerging dovish rates and balance-sheet normalization posture and an encouraging week-end jobs data, helped overcome these inauspicious developments and boost stocks for the week. It appears that, despite gathering global economic clouds, domestic economic growth and the Fed's rate and balance sheet policies wield the most influence over investor sentiment.

After registering their best January percentage gains in three decades, the DJIA and S&P 500 finished the week up 1.3% and 1.6% respectively. While, the NASDAQ rose 1.4% for the week.

ETFG Quant Movers – those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings:

ETFG Quant Winners: The top five ETFG Quant gainers from this past week were First Trust Australia AlphaDEX Fund (FAUS), Invesco PureBeta MSCI USA Small Cap ETF (PBSM), iShares Global Telecom ETF (IXP), Vanguard Industrials ETF (VIS), and VanEck Vectors Generic Drugs ETF (GNRX). While there is no clear or consistent macro theme driving these funds’ recent quant outperformance, it appears sentiment and technical factors played a disproportionate role in their rise, as each of these funds experienced over 23% percentage increases in their quant behavioral scores.

ETFG Quant Losers: Our top five ETFG Quant losers this week were Vanguard Mid-Cap Value ETF (VOE), Vanguard Small-Cap Growth ETF (VBK), CSOP MSCI China A International Hedged ETF (CNHX), Amplify Transformational Data Sharing ETF (BLOK), and Reality Shares DIVCON Dividend Guard ETF (GARD). A tenuous and uncertain corporate earnings outlook, slowing Chinese economic growth, and the deteriorating fortunes of the cryptocurrency/blockchain market likely contributed to these funds outsize declines.

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

Following this week's mixed earnings results and the sector's bellwether status in the markets, we'd like to highlight the top ranked technology funds at the moment according to our model. From 1-5, these funds are First Trust Nasdaq Semiconductor ETF (FTXL), iShares Exponential Technologies ETF (XT), SPDR S&P Technology Hardware ETF (XTH), The 3D Printing ETF (PRNT), and ALPS Disruptive Technologies ETF (DTEC). As scrutiny on this sector increases and global economic uncertainty mounts, we recommend monitoring our select list to identify promising opportunities in the technology and broader sector, geographic and style groups.

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.