Monday, July 15, 2019

A Rate Cut Looms...

Monday, July 15, 2019 - Expectations for monetary easing around the world continued to drive stocks higher this week. The Dow Jones Industrial Average rallied to a record high, closing above 27,000 for the first time, following the Fed chairman's testimony to Congress. Powell conveyed that the case for more a accommodating policy had strengthened, further solidifying expectations for a rate cut in the coming months.

The European Central Bank (ECB) is also considering injecting fresh stimulus to the economy through interest-rate cuts, or the relaunch of quantitative easing. As the second-quarter earnings season kicks off next week and attention shifts from central banks to earnings, we think volatility will likely pick up. With domestic large-cap stocks near all-time highs, its always a good time to review to review and potentially rebalance portfolios that have strayed far from the initial target asset allocation.

The ETFG Select list shows our top-rated ETF by each sector. Sprott Junior Gold Miners ETF (SGDJ) is our top rated Basic Material. SPDR S&P Retail ETF (XRT) is our top rated Consumer Discretionary. PowerShares S&P SmallCap Consumer Staples Portfolio (PSCC) is our top rated Consumer Staples. Our top rated Energy ETF is iShares Edge MSCI Multifactor Energy ETF (ERGF).

The top 3 Quant Gainers of this week are IQ Chaikin US Large Cap ETF (CLRG), SPDR Russell 1000 Yield Focus ETF (ONEY), and First Trust Index Innovative Transaction & Process ETF (LEGR). The top 3 Quant Losers of the week are Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN), Global X MSCI China Communication Services ETF (CHIC), and Global X MSCI Greece ETF (GREK).

To learn more about our ETFG Quant Gainers and Losers, please visit us at https://www.etfg.com/research/quant-movers or call us at (212) 223-ETFG (3834).

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, July 8, 2019

Strong Week for the 4th

Monday, July 8, 2019 - Though it was a shortened week, the stock markets rode the heat wave right into the July 4th holiday with all major US Indices on the rise.

For the week, the Dow Jones Industrial Average rose about 322 points up 1.21% closing at 26,922. The S&P 500 gained 1.7% to 2990 and the Nasdaq Composite gained 1.9% finishing at 8161 for the week. This all on news of more dovish signal from the federal reserve and continued hope of an agreement in the trade negotiations between the US and China.

In ETFs, we saw inflows into some of the largest products on the market place. LQD, iShares iBoxx USD Investment Grade Corporate Bond ETF, gained about $4B in assets for the month of July. That was followed by SPY, the SPDRS S&P 500 ETF, which gained over $3.07B in assets. In outflows, and to somewhat of a surprise, we saw money leave IVV, iShares S&P 500 ETF, which lost over $4B in the four trading days of July. That was followed by SHY, iShares 1-3 year treasury bond ETF, which lost over $2.69B, all according to our ETFG Fund Flow Summary.

In the ETFG Quant Movers, we saw international based ETFs gain the most points to their overall scores. The Franklin FTSE Italy ETF, FLIY, and the WisdomTree Japan Multifactor ETF, JAMF, added 14.68 and 14.57 to their overall Quant scores respectively.

On the loser’s side, we saw technology-based ETFs drop points in their overall scores. The ETFMG Drone Economy Strategy, IFLY and the 3D Printing ETF PRNT lost 4.65 and 4.23 to their overall scores respectively.

There was also some great news for the ETF Industry coming at the beginning of the week. Fixed Income based ETFs now have over $1 Trillion in assets, a sign of the industries strength. Many experts believe that this growth in the fixed income space will continue upward as the products become more popular within the insurance space.

We will see if the markets can continue their hot streak throughout the summer, but it will depend on a number of factors. One of the most prevalent is seeing how the trade deal with China continues to move forward. Another is the continued rise in tensions between the US and Iran over the stricter nuclear sanctions that President Trump has imposed on the nation.

From all of us at ETF Global, we hope you had a happy and healthy 4th of July. Thanks for reading ETF Global Perspectives!

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

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

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

Wednesday, July 3, 2019

3Q Rebalance - ETF Global Dynamic Model Portfolios

Wednesday, July 3, 2019 - Another quarter down and investors (and the Federal Reserve) are still wondering which way this thing is going and whether it’s time to start taking some chips off the table.  On the one hand, investors suffered through a minor pullback by equities in May only to see them immediately bounce back to old highs in June even as the ten-year Treasury bond yield fell below that of the three month note. And the less said about the burgeoning trade war with China the better, yet, equities have proved remarkably resilient throughout all of this with enough IPO and merger mania to have investors wondering if the market is partying like it’s 1999 all over again.

Investors will have to wait for the next employment report to shed some light on where the market is going, but, the quarterly reallocation of our ETFG Dynamic Model Portfolios waits for no one as all 4 of the base portfolios and the 8 “tilts” were updated on July 1st and the back and forth nature of this market has left value funds firmly entrenched within domestic sleeve.

The fund line-up for the third quarter is a mix of old and new favorites with only one fund, the SPDR S&P 600 Small Cap Value ETF (SLYV) remaining for another quarter. Leaving the strategy are the Direxion NASDAQ 100 Equal Weighted Fund (QQQE), the SPDR S&P 600 Small Cap ETF (SLY) and the SPDR S&P 400 Mid Cap Value ETF (MDYV.)  Taking their places are several familiar names including the iShares Russell Midcap ETF (IWR) and the SPDR Portfolio S&P 500 Growth ETF (SPYG) with the WisdomTree U.S. SmallCap Dividend Fund (DES) also joining the fund.

Even though the second and third quarter domestic allocations might have similar sounding names, there are substantial differences with the model showing a clear preference for larger stocks with a substantial increase in bigger names thanks to the addition of SPYG which has a larger average market cap than QQQE. But under the hood, the sector breakdown between the two quarterly allocations remains relatively stable as the back and forth trading over the last few months hasn’t substantially altered the sector leadership so far.

The international equity exposure remains largely unchanged from the prior quarter as our ETFG Quant Model continues to favor two broad funds from Schwab, the Schwab Fundamental International Large Company Index (FNDF) and its small cap equivalent, FNDC. Not surprisingly, the model also favors the return of one of our on-again, off-again positions, the iShares MSCI United Kingdom fund (EWU) whose presence depends on the latest Brexit drama. EWU was in the program as recently as the first quarter and fortunately the model favored replacing it just before the last twist in the saga as PM Theresa May’s failure to pass her long-negotiated deal led to her resignation and a race to replace her. EWU was relatively flat in the 2nd quarter despite heavy volatility, although the iShares MSCI Eurozone ETF was up over 5%.

The emerging market sleeve also saw its share of turnover this quarter as the iShares MSCI Emerging Markets ETF (EEM) was replaced by the iShares Edge MSCI Multifactor Emerging Markets ETF (EMGF) model while the First Trust Chindia Fund (FNI) remains.  Exactly what factors is the fund looking for?  According to the iShares website, it has a focus on more inexpensive and financially healthy smaller stocks with better momentum.  That gives the fund a substantially different make-up than EEM, with a smaller overall market cap and with a distinct bent towards value stocks. So, like the domestic allocation, the EM portion of the portfolio is looking for a bargain!

To learn more about our ETFG model portfolio strategy, please email us at sales@etfg.com or call us at (212) 223-ETFG (3834).

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, July 1, 2019

Summer Cooling

Monday, July 1, 2019 - Though the US Stock markets cooled down a bit this week, they finished off the first half of the year riding their continued bull market hot streak. For the week, the Dow Jones Industrial Average dropped 119 points or down .4% closing at 26,599.96. The S&P 500 and Nasdaq Composite also finished lower down .3% each to 2941 and 1566, respectively.

In ETFs, we saw significant inflows in some bond ETFs over the past month. LQD, iShares iBoxx USD Investment Grade Corporate Bond ETF, gained about $4.62B in assets. That was followed by SHV, the iShares Short Treasury Bond ETF, which gained over $4.15b in assets. In outflows, investors sold shares of international ETFs. EFA, iShares MSCI EAFE ETF, lost over $1.45b over the month of June. EWJ, iShares MSCI Japan ETF, lost over $595m, all according to our ETFG Fund Flow Summary.

In the ETFG Quant Movers, small cap ETFs gained the most points to their overall scores. The AlphaMark Actively Managed Small Cap ETF, SCMP, and the Legg Mason Small-Ca Quality ETF, SQLV, added 7.98% and 7.17% to their overall Quant scores respectively. On the loser’s side, we saw international ETFs. The Invesco International Revenue ETF, REFA and the Global X DAX Germany ETF DAX lost 8.45 and 8.30 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 Telecommunications portion when comparing this week’s Select List to last. The Fidelity MSCI Telecommunications Services Index ETF, FCOM, moved up one spot to take the first overall position on the list. This knocked the iShares US Telecommunications ETF, IYZ out of first place and into 3rd. VOX, the Vanguard Communication Services ETF, moved up one spot and into 2nd place this week. XLC, the SDPR Communications Services ETF, remained in the 4th position. A new addition to the list this week was XTL, The SPDR S&P Telecom ETF which is now in 5th place. It knocked off IXP, iShares Global Telecom ETF.

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, June 24, 2019

Pushing Through Record Highs

Monday, June 24, 2019 - U.S. stocks continued their record-setting pace for the month of June, following a dovish shift in the Federal Reserve's posture and signaling of its willingness to cut rates if warranted by economic conditions. Wednesday's accommodative stance by the Fed echoed a fresh commitment earlier in the week by the ECB to introduce further stimulus to head off rising economic risks and combat moribund growth and inflation. The dovish synchronization of global central bank policies was well received by investors this week and served as a bulwark against of host of concerns that threaten to derail global economic growth.

Despite a benign shift in global central bank policy and the brightening prospect of a U.S.-China trade deal, investors still have to contend with issues such as still unresolved trade disputes, sluggish economic data, Brexit uncertainty and escalating U.S.-Iranian military tensions. Any negative developments in these array of issues threaten to disrupt the delicate balance of factors that have currently favored rising equity prices.

Unaffected by these looming threats, stocks surged into record territory this week, with the DJIA, S&P 500, and NASDAQ rising 2.4%, 2.2.%, and 3.0% respectively. As of Friday, the DJIA is up 7.7.% for the month, which would mark its best monthly performance since October 2015 and best June since 1938. Meanwhile, the S&P 500 notched a record close on Thursday and its 7.2% monthly advance would be its best June performance since 1955. Adding to this banner month, NASDAQ's 7.8% gain would be its best June since the 2000 amid the dot-com euphoria.

These gains also coincided with a further decline in 10 year Treasury yields, which sank below 2.0% for the first time since 2016 before recovering to end the week at 2.04%. The continued decline of global government bond yields adds another mixed signal to the global economic picture and will be a dynamic worth monitoring in the coming weeks.

ETFG Quant Winners: The easing of global trade tensions helped fuel this week’s biggest Quant score gainers. From 1-5, this week's top gainers were the Global X MSCI China Communication Services ETF (CHIC), Bernstein Global Research Fund (BRGL), Franklin FTSE Hong Kong ETF (FLHK), Developed International Equity Select ETF (RNDM), and SPDR Solactive Canada ETF (ZCAN).

ETFG Quant Losers: The ETFs suffering the biggest Quant declines were more of a mixed bag this week. From 1-5, the top losers were First Trust India NIFTY 50 Equal Weight ETF (NFTY), iShares Morningstar Small-Cap ETF (JKJ), Principal Sustainable Momentum Index ETF (PMOM), iShares Russell 2000 Value ETF (IWN), and FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE).

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

Following an apparent breakthrough in U.S.-China trade talks we'd like to focus on the weekly changes amongst ETFs in the Asia-Pacific geographic group. With the exception of two ETFs swapping the 3rd and 4th spots, no changes occurred in the composition of our top 5 rated Asia-Pacific funds from last week to now. While progress in U.S.-China trade discussions served as a catalyst for this week's market action, our model is more forward-looking and long-term oriented in its outlook and is appreciably less sensitive to such short-term fluctuations. For long-term upside plays in the Asia-Pacific region, consider our top 5 rated ETFs, which may be better able to withstand ongoing global trade tensions - 1) First Trust Chindia ETF (FNI), 2) iShares MSCI South Korea ETF (EWY), 3) iShares MSCI Malaysia ETF (EWM), 4) iShares China Large-Cap ETF (FXI), and 5) WisdomTree Asia-Pacific ex-Japan Fund (AXJL).

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, June 17, 2019

Tensions Home and Abroad

Monday, June 17, 2019 - Amid conflicting economic signals and geopolitical flareups, U.S. stocks managed to inch higher for the week and continue their strong start to June. Stocks began the week on a positive note, as the U.S. and Mexico were able to stave off an escalating conflict over immigration and some high-profile M&A tie-ups between Salesforce and Tableau and UTC and Raytheon lifted investor sentiment. However, this burst of optimism ebbed as the week came to a close following a mixed bag of economic data and sharpening geopolitical tensions in the Middle East.

Positive consumer spending in May was counterbalanced by a muted CPI reading and record-low inflation expectations. Broadcom's downward revenue forecast revision and dim full-year outlook due to intensifying global trade tensions further depressed the mood in the markets. Lastly, the attack of two oil tankers in the Gulf of Oman, purportedly by Iran, sharply unsettled global energy markets and raised the specter of U.S.-Iranian military conflict. Despite the worrisome turn at the end of the week, the DJIA, S&P 500, and Nasdaq were able to register gains of 0.4%, 0.5%, and 0.7% respectively 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: This week’s biggest winner was the Validea Market Legends ETF (VALX) rising 7.82 to boost its overall Quant Score to 51.91. Following VALX in the top 5 were Eaton Vance Stock NextShares (EVSTC), USAA MSCI USA Small Cap Value Momentum Blend Index ETF (USVM), Brandes Value Nextshares (BVNSC), and Aptus Fortified Value ETF (FTVA).

ETFG Quant Losers: Franklin FTSE Australia ETF (FLAU) suffered the biggest overall decline this week, falling 9.58 points to bring its overall Quant Score to 45.52. ProShares Decline of the Retail Store ETF (EMTY), Franklin FTSE Japan Hedged ETF (FLJH), Franklin FTSE Hong Kong ETF (FLHK), and Kraneshares MSCI All China Healthcare Index ETF (KURE) rounded out the rest of the top 5 biggest Quant losers for the week.

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

Given its heightened volatility this week, we'd like to focus on the weekly changes amongst ETFs in the energy sector. While the energy sector suffered a major shock this week, our top 5 rated energy ETFs were unchanged from last week. On the surface, this may come as a surprise. However, a look under the hood of these funds and review of their investment objectives reveals why our top was unaffected. Our top 5 energy sector ETFs consists entirely of funds that focus on energy services and infrastructure, making them less sensitive to funds tied directly to oil prices. Leading our top 5 is the VanEck Vectors Oil Service ETF (OIH). J.P. Morgan Alerian MLP Index ETN (AMJ), Invesco DWA Energy Momentum ETF (PXI), First Trust North American Energy Infrastructure Fund (EMLP), and Invesco Dynamic Oil & Gas Services ETF (PXJ) close out the rest of our top 5 energy ETFs. For energy-focused investors, this may be a dynamic to monitor going forward as the sector appears poised for continued disruptions.

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, June 10, 2019

Bounce Back

Monday, June 10, 2019 – Stocks registered a four day string of solid gains to put the finishing touches on the best week of 2019. The S&P 500 Index had its best week of the year, ending within 3% of its all-time high, while the Dow Jones Industrial Average escaped its longest weekly losing streak since 2011. Much of the week’s gains came Tuesday, which marked the best daily performance for the major benchmarks so far this year. The catalyst appeared to be remarks from Federal Reserve Chairman Jerome Powell at a central bank conference, in which he pledged that policymakers were paying close attention to the impact of trade tensions on the economy and would act as appropriate to sustain the expansion. This anticipation of the Fed cutting interest rates later this year helped stocks move higher at the end of the week. All major sectors rose on the week, led by a surge in Basic Materials and in Technology. The Dow Jones Industrial Average rose 263 points to 25,984, the S&P 500 Index increased 30 points to 2,873 and the Nasdaq Composite gained 127 points to 7,742.

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

ETFG Quant Winners: This week’s biggest winner was iShares U.S. Infrastructure ETF (IFRA) gaining 10.54 to finish with a Quant Score of 56.74. Hartford Global Impact NextShares Fund (HFGIC) finished a close second gaining 10.38 points to move up to a Quant Score of 55.66. Vanguard U.S. Quality Factor ETF (VFQY) moved to a Quant Score of 54.53 after posting a 9.89 increase. Rounding out the top five were Reality Shares DIVCON Dividend Guard ETF (GARD) and AAM S&P 500 High Dividend Value ETF (SPDV) gaining 9.77 and 9.50 respectively.

ETFG Quant Losers: This week’s biggest loser was Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF (ASHS) dropping 11.64 points to a Quant Score of 45.13. At a distant second and third were Pacer Trendpilot US Mid Cap ETF (PTMC) and VictoryShares US Discovery Enhanced Volatility Wtd ETF (CSF) down 7.82 and 7.75 respectively. iShares MSCI Emerging Markets Small Cap ETF (EEMS) fell 6.67 points to 41.29 and Invesco KBW Bank ETF (KBWB) rounded out the bottom five losing 6.32 points to move to a Quant Score of 41.20.

ETFG Weekly Select List - the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model. Because of the Sector’s success on the 1W Quant Rating of the ETFG Heat Map, we’d like to highlight some substantial movement in the Natural Resources Sector when comparing this week’s Select List to last. First Trust Index Global Natural Resources Income ETF (FTRI) fell from first to third making way for FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) and Global X U.S. Infrastructure Development ETF (PAVE) to take the top two spots in the Natural Resources Select List. DJ Brookfield Global Infrastructure ETF (TOLZ) dropped to the four spot while newcomer SPDR S&P North American Natural Resources ETF (NANR) rounded out the sector Select List. With the sector as a whole posting a strong week, investors should consider these ETFs when reviewing their portfolios.

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