Monday, November 23, 2020

Holiday COVID Spike

Monday, November 23, 2020 - Sharply rising numbers of COVID-19 cases, hospitalizations, and deaths led to some near-term pessimism on Wall Street, tempering the long-term optimism spurred by positive developments on vaccines. The S&P 500 ended the week down 0.8%, while the Dow dropped 0.7%. The tech-heavy Nasdaq ended the week slightly up, posting a 0.2% gain.

After posting eye-popping gains in earlier stages of the pandemic, tech stocks have taken a tumble in recent weeks, as studies of vaccines from Pfizer and Moderna Inc. showed positive results. When approved and mass produced, these vaccines could allow for normal life to resume at some point in 2021, boosting much of the economy, but also reducing the need for the pandemic technology solutions that have driven some stocks to unprecedented highs this year.

This week threw some cold water on that long-term COVID-19 optimism, as signs emerged that the months before vaccines are widely available could be rough. As the U.S. passed the grim milestone of 250,000 deaths from the virus, rising outbreaks were being reported in many U.S. states and throughout the world. The New York City public school system, the nation’s largest, announced a return to remote learning, and the number of jobless claims rose for the first time in 5 weeks.

ETFG Quant Movers: Those ETFs with the largest weekly change in their respective ETFG Quant Fundamental Score ratings.

ETFG Quant Winners: This week, we focus on notable movement in the ETFG Quant Behavioral Scores. The biggest increase was charted by the First Trust Health Care AlphaDEX Fund (FXH), followed by the VanEck Vectors Steel Index Fund (SLX), the Schwab Emerging Markets Equity ETF (SCHE), the SPDR Portfolio Emerging Markets ETF (SPEM), and the Columbia Sustainable International Equity Income ETF (ESGN).

ETFG Quant Losers: The ETFs with the biggest decreases in their ETFG Quant Behavioral Scores for this week are the iShares US Regional Banks ETF (IAT), the Invesco KBW Bank ETF (KBWB), the iShares International Select Dividend ETF (IDV), the iShares Core Dividend Growth ETF (DGRO) and the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC).

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

As Europe contends with its own COVID-19 resurgence, an EU recovery package has been blocked by Hungary and Poland. Negotiations continue over that 1.8 trillion Euro package, as well as post-Brexit trade agreements.

In this rapidly changing environment, our Select List has identified several opportunities in Europe-focused ETFs. Topping the list this week is the SPDR STOXX Europe 50 ETF (FEU). Two dividend funds take the next spots. They are the First Trust Stoxx European Select Dividend Index Fund (FDD) and the WisdomTree Europe SmallCap Dividend Fund (DFE).

Closing out the list are the iShares MSCI Turkey ETF (TUR) and the iShares MSCI Austria ETF (EWO).

Thank you for reading ETF Global Perspectives!

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

_______________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

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

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

Tuesday, November 17, 2020

Vaccine = Optimism

Tuesday, November 17, 2020 - Promising studies of COVID-19 vaccines have led to a surge of optimism on Wall Street, driving both the Dow Jones Industrial Average and the S&P 500 to all-time highs.

Investors were buoyed last week by Pfizer and BioNTech’s announcement that their COVID vaccine recorded 90% effectiveness in a large study. On Monday, a preliminary analysis of Moderna Inc.’s vaccine found it 95 percent effective in a clinical trial.

While the health care sector is responsible for the rally, the benefits are being shared across broad swaths of the market, with companies that would benefit most from a full economic reopening, including airlines and cruise lines, standing out as the biggest winners. Meanwhile, Zoom Video Communications Inc. saw declines, along with other technology companies that have charted big gains during the pandemic.

ETFG Quant Movers: Those ETFs who have had the largest weekly change in their respective ETFG Quant Fundamental Score ratings.

ETFG Quant Winners: We’re seeing some big changes in the Quant Fundamental Scores of ETFs. Topping the list is the Large Cap Growth Index-Linked ETN (FRLG), Principal Spectrum Preferred Securities Active ETF (PREF), BMO Elkhorn DWA MPL Select Index ETN (BMLP), AGFiQ US Market Neutral Momentum Fund (MOM), and AGFiQ US Market Neutral Anti-Beta Fund (BTAL).

ETFG Quant Losers: The ETFs with the biggest declines in their Quant Fundamental Scores are Oppenheimer S&P Ultra Dividend Revenue ETF (RDIV), Proshares Equities for Rising Rates ETF (EQRR), ETRACS Alerian MLP Infrastructure Index ETN (MLPI), Global X MLP ETF (MLPA), and Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC).

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

With its work to address COVID-19 driving the markets to all-time highs, this week we will focus on the Health Care Sector. Topping that sector for the week in our ETFG Quant Model’s analysis is the SPDR S&P Biotech ETF (XBI).

The next three spots on the list are all ETFs specifically focused on pharmaceuticals. They include: VanEck Vectors Pharmaceutical ETF (PPH), Invesco Dynamic Pharmaceuticals ETF (PJP), and First Trust Nasdaq Pharmaceuticals ETF (FXTH). Rounding out this week’s top 5 in the Health Care sector is The Organics ETF (ORG).

Thank you for reading ETF Global Perspectives!

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

_______________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

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

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

Monday, November 9, 2020

Election Turmoil

Monday, November 9, 2020 – Stocks continued their ascent this past week, as the cloud of uncertainty over the 2020 elections slowly began to clear with Joe Biden appearing to emerge as the victor. Amongst unprecedented election turmoil, the prospect of a divided government appears to have brought some comfort to investors, with this scenario lowering the likelihood of increased regulatory burdens, an overhaul of the tax code, and other major policy changes. Additionally, with Friday's job report showing 638,000 jobs were added in October and that unemployment fell to 6.9%, the economy reaffirmed that it is trending in the right direction.

With these events bringing some relief to markets, stocks posted their best weekly performance since April, when they were just beginning their recovery from the pandemic-induced trough. For the week, the DJIA, S&P 500, and Nasdaq rose 7.3%, 6.9%, and 9.0% respectively.

ETFG Quant Movers - Those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings.

ETFG Quant Winners: From 1-5, the ETFs posting the largest RTFG Quant score gains this week were the Dorsey Wright Micro-Cap ETF (DWMC), ETFMG Alternative Harvest ETF (MJ), WBI BullBear Yield 1000 ETF (WBIG), WBI BullBear Value 1000 ETF (WBIF), and First Trust RiverFront Dynamic Asia Pacific ETF (RFAP).

ETFG Quant Losers: Conversely, the ETFs that experienced the largest declines in their ETFG Quant scores this week were the iShares S&P 500 Growth ETF (IVW), WisdomTree China ex-State Owned Enterprises Fund (CXSE), Cambria Core Equity ETF (CCOR), First Trust Dorsey Wright Focus 5 ETF (FV), and ERShares Entrepreneur 30 Fund (ENTR).

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

With markets now largely pricing in a Biden presidency, our weekly Select List reveals some interesting candidates of beneficiaries under this scenario. A look at our top-rated thematic ETFs captures some of the segments of the economy whose prospects would be boosted under a Biden presidency.

Currently, our highest scoring thematic ETFs are SPDR Kensho Clean Power ETF (XKCP), iShares U.S. Infrastructure ETF (IFRA), Barclays Women in Leadership ETN (WIL), iShares Emerging Markets Infrastructure ETF (EMIF), Robo-Stox Global Robotics & Automation Index ETF (ROBO). The themes in this list - environmental protection/renewable energy, diversity & inclusion, and infrastructure/increased government spending - capture the shift in policies priorities from our (likely) previous administration to our incoming one.

Use our weekly Select List to monitor how market-moving events, like the election, may change the outlook for different sectors, geographies, and strategies/themes and their corresponding ETFs.

Thank you for reading ETF Global Perspectives!

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

_______________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

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

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

Monday, November 2, 2020

An Upcoming Week Like No Other

Monday, November 2, 2020 – Leading into the week of the presidential election, stocks suffered their worst work and month since the onset of the coronavirus pandemic in March. Investors have been unnerved by election uncertainty, surging global coronavirus cases, the imposition of new lockdowns in Europe and fear of similar measures in the U.S., and mixed earnings and rising regulatory pressure against large technology companies. These anxieties overrode any positive impact from the steadily improving economic data over the past few months, highlighted by robust third quarter GDP growth.

For the week, the DJIA, S&P 500, and NASDAQ declined 6.1%, 5.6%, and 5.5% respectively. This marked the second consecutive month of declines for the three major indexes, with each experiencing a loss greater than 2% for October.

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 gainers in their ETFG Quant Total Score were the iPath S&P MLP ETN (IMLP), Innovator IBD ETF Leaders ETF (LDRS), Franklin FTSE Europe Hedged ETF (FLEH), Global X MSCI Superdividend Emerging Markets ETF (SDEM), and AdvisorShares Vice ETF (ACT).

ETFG Quant Losers: The ETFs suffering the largest declines in their ETFG Quant Total Score were the Elements Spectrum ETN (EEH), First Trust Preferred Securities and Income ETF (FPE), Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), iShares MSCI Finland ETF (EFNL), and SPDR Solactive Germany ETF (ZDEU).

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

With technology companies once again in focus this week, we feature the top-rated ETFs within this sector from our Quant model.

From 1-5, our model currently favors ALPS Disruptive Technologies ETF Technology (DTEC),  First Trust Nasdaq Smartphone Index Fund Technology (FONE), Loup Frontier Tech ETF Technology (LOUP), O'Shares Global Internet Giants ETF Technology  (OGIG), and First Trust Cloud Computing ETF Technology (SKYY). DTEC and FONE maintained their positions from last week, however there was a shakeup in the 3-5 spots. LOUP replaced IPAY at 3, OGIG supplanted XWEB at 4, and SKYY unseated XTH at 5.

Thank you for reading ETF Global Perspectives!

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

_______________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

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

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

Monday, October 26, 2020

Momentum Shift

Monday, October 26, 2020 – Unsurprisingly after three consecutive weekly advances, stocks declined modestly last week and the major benchmarks ended mixed. The S&P 500 declined 0.5% while the Nasdaq Composite fell 1.1% and the Dow Jones Industrial Average fell 1.0%. The Russell 2000 and the S&P Mid Cap 400 finished in positive territory with a gain of 0.4% and 0.6% respectively. Looking at the S&P 500 sectors, the technology (-2.2%) sector fared the worst, while the communication services (+2.1%) sector fared the best. The financial (+1.0%), utilities (+1.2%) and energy (+0.5%) sectors also closed higher as the 10-yr yield rose to 0.84%.

Turning to ETFs, total assets in U.S. listed ETPs grew modestly and saw a net inflow of $6.7 billion which was split even among the equity and fixed income asset classes. SPDR S&P 500 ETF Trust (SPY) topped the list, with a total gain of around $3.8 billion and Vanguard Total Stock Market ETF (VTI) saw a net inflow of approximately $1.5 billion. They were followed in order by JPMorgan BetaBuilders U.S. Mid Cap Equity ETF (BBMC), Vanguard Total International Stock ETF (VXUS) and iShares ESG MSCI EM ETF (ESGE). These ETFs brought in approximately $1 billion, $851 million and $555 million respectively in net creations. In weekly outflows, we saw Invesco QQQ Trust (QQQ) drop over $2 billion, despite a strong showing last week and First Trust Capital Strength ETF (FTCS) had $1.5 billion in net redemptions.

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 gainers in their ETFG Quant Total Score were WisdomTree China ex-State-Owned Enterprises Fund (CXSE), iShares S&P 500 Growth ETF (IVW), Invesco DWA Tactical Sector Rotation ETF (DWTR), CSOP MSCI China A International Hedged ETF (CNHX), and Reality Shares DIVCON Dividend Defender ETF (DFND). Each ETP added between 21 and 12 points to their overall score mostly due to fundamental factors.

ETFG Quant Losers: Honorable mentions in the loser category were Loncar Cancer Immunotherapy ETF (CNCR), FI Enhanced Global High Yield Exchange Traded Notes (FIEG), Principal Healthcare Innovators Index ETF (BTEC), Insightshares Patriotic Employers ETF (HONR) and Large Cap Growth Index-Linked Exchange Traded Notes due 2028 (FRLG). The reasons for the drop in quant scores can also be traced to mostly fundamental factors.

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

Considering the sector’s substantial losses, we highlight the top ETFs within the Technology sector in order to help readers diligence potential opportunities. ALPS Disruptive Technologies ETF (DTEC) moved one spot to claim the 1st position.

Newcomers to the ETFG Weekly Select List this week claimed 2nd, 3rd and 4th which included in order First Trust Nasdaq Smartphone Index Fund (FONE), ETFMG Prime Mobile Payments ETF (IPAY) and SPDR S&P Internet ETF (XWEB). SPDR S&P Technology Hardware ETF (XTH) maintained a 5th place position this week.

Thank you for reading ETF Global Perspectives!

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

_______________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

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

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

Monday, October 19, 2020

Market Resilience

Monday, October 19, 2020 – The stock market oscillated between positive and negative territory this past week as the large-cap benchmarks narrowly squeezed out a third consecutive week of gains. Investors seemed encouraged from a positive U.S. retail sales report that showed consumer spending rose in September despite the lack of renewed aid from Washington. Also, several of the major U.S. banks that kicked off the quarterly earnings season reported strong third-quarter results, boosted by trading and investment banking revenue. Within the S&P 500 Index, industrials and utilities outperformed, while financials recorded minor losses overall. The real estate sector was also weak.

In looking at ETF flows, the Invesco QQQ Trust (QQQ) topped the list, with a total gain of approximately $5.2 billion. The technology heavy fund was a major contributor this week, powering U.S.-listed ETF inflows to $18.5 billion. Also on the top five inflow list was First Trust Capital Strength ETF (FTCS), Vanguard Total Stock Market ETF (VTI), iShares MBS ETF (MBB) and Vanguard Total International Stock ETF (VXUS). In order these ETFs brought in $1.6 billion, $1.4 billion, $1.2 billion and $1.1 billion respectively in net creations. In weekly outflows, we saw iShares MSCI EAFE ETF (EFA) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK) drop over $1 billion and $600 million respectively in redemptions.

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 gainers in their ETFG Quant Total Score were iPath S&P MLP ETN (IMLP), Innovator IBD ETF Leaders ETF (LDRS), Franklin FTSE Europe Hedged ETF (FLEH), Global X MSCI SuperDividend Emerging Markets ETF (SDEM), and AdvisorShares Vice ETF (ACT). Each ETP added around 10 points to their overall Quant.

ETFG Quant Losers: Honorable mentions in the loser category were ELEMENTS SPECTRUM ETN (EEH), First Trust Preferred Securities and Income ETF (FPE), Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), iShares MSCI Finland ETF (EFNL) and SPDR Solactive Germany ETF (ZDEU). The reasons for the drop in quant scores can be traced to mostly behavioral factors.

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

Considering the sector’s substantial losses, we highlight the top ETFs within the Industrials sector in this week’s Select List. SPDR S&P Transportation ETF (XTN) held on to the 1st position while First Trust RBA American Industrial Renaissance ETF (AIRR) moved from the 4th position to claim 2nd this week.

Those two funds were followed by 3 newcomers which are in order, Invesco Dynamic Building & Construction ETF (PXB), iShares Transportation Average ETF (IYT) and First Trust Industrials/Producer Durables AlphaDEX Fund (FXR).

Thank you for reading ETF Global Perspectives!

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

_______________________________________________________

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

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

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

Wednesday, October 14, 2020

4Q 2020 Rebalance – ETF Global® Dynamic Model Portfolios

Wednesday, October 14, 2020With less than 30 days until one of the most pivotal presidential elections in a generation, confusion would seem to be the reigning power in our country. It is no wonder that equities have started to drift. Equities started the third quarter so strong that even the perpetually lagging Dow Jones Industrial Average was almost back to its pre-COVID highs before the September sell-off sent them reeling. Now investors are facing a sea of red in their heat maps as even the supposedly “defensive” FAANG stocks have suffered double digit losses over the past month and only interest rate sensitive utilities show any green shoots. Talk about a land of confusion.

Confusion may be king, but the start of another quarter at ETF Global means it’s time to turn to our analytically driven Quantitative Model to update our ETFG Dynamic Model Portfolios, including all 4 of the base portfolios and the 8 “tilts.”  While the recent selloff in the S&P 500 shows that larger-cap stocks are struggling for direction, our ETFG Quant model still favors small-cap funds as it has for several quarters. That might not surprise our regular readers, but the reasons why those small-cap funds score so highly in our Quant Model might not be what you think.

The ETFG Model Portfolios began overweighting mid and small-cap funds in 2019 driven by their substantially higher fundamental scores relative to their larger-peers as well as their own historical price multiples. That is encapsulated in our ETFG Fundamental score, where if we reranked the fund universe available to our model portfolio strategies, only a handful of the 25 highest scoring ETFs would be large-cap funds. Those selections would have a distinct bias towards value stocks. Strategists will of course argue valuations hardly matter in a world of permanently low interest rates, but funds like the SPDR S&P 500 ETF (SPY) are trading just below all-time high multiples, offering little room for further expansion where small-cap funds are substantially below even more recent, short-term averages.

Strong fundamental scores are only part of the reason the ETFG Quant Model favors small-cap funds, the continuing improvement in momentum along with higher values for our contrarian sentiment indicators has boosted their ETFG Behavioral scores as well!  Smaller-cap focused funds clearly underperformed over the past year, but 2020 has seen the beginnings of a shift with funds like the iShares S&P SmallCap 600 ETF (IJR) performing in line with SPY over the past three months. Price momentum is just one component, other new additions to the strategy like the iShares Russell 2000 Value ETF (IWN) find themselves included thanks to high short interest as well as an elevated put/call ratio which gives it a strong sentiment sub-score. 

Big changes are afoot within the International sleeve of our portfolio as the ETFG Quant model shifts both the average market cap and geographic location of its selections. The third quarter allocation was split between large and small-cap funds with a value focus as well as hedged and unhedged performance as the dollar weakened to levels not seen since 2018. With the dollar stabilizing, the model has shifted focus away from hedged products and towards larger names with the addition of the Invesco RAFI Strategic Developed ex-US ETF (ISDX) and Invesco S&P International Developed Low Volatility ETF (IDLV). Beyond a slight overweight to value stocks, the only other shared attribute of the two are large allocations to Japanese stocks, among the best international performers in the third quarter. Allocations to the Pacific Rim are boosted by the return of two country-specific funds offering enhanced exposure to stocks in South Korea and Singapore.

That shift towards larger value stocks in Asia also impacted our emerging market allocation with the addition of the Invesco RAFI Strategic Emerging Markets ETF (ISEM). The fund has a focus on high quality, large companies according to the Invesco website and need to have both a high size and quality score to make the portfolio. That might explain why the fund has nearly 60% of its assets in Chinese stocks, compared to 40% for the MSCI Emerging Market Index. Joining it is the WisdomTree Emerging Markets SmallCap Dividend Fund (DGS) whose focus on higher yielding Taiwanese names which seems to be the perfect counterbalance.

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!
 
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.