Familiar Patterns

All eyes remain glued on the equity markets as the S&P 500 did something last week that it hasn’t been able to manage since last October, advancing for four straight weeks as it recovers nearly all the losses incurred during last summer’s bout of free-floating anxiety. Traders and reporters might find themselves developing a case of “highway hypnosis” as each week’s advance follows a familiar and almost mind-numbing formula; minor losses and profit taking at the start of each week followed by a strong push higher on Thursday and Friday as the latest event whether it’s the weekly employment report, speech by a Fed governor or just simple short covering sparks a push higher before the cycle repeats the following week.  But with another FOMC meeting lined-up for this week and the S&P 500 just a hair’s breadth from prior support at 2100, we can’t help but wonder if history might not repeat the same pattern from last October; the market rallied for seven straight weeks with the bulk of the gains came early in the rally before the market stalled out and the S&P 500 became stuck between 2000 and 2100 for nearly a full year while investors waited for some resolution from the Fed.  Sound familiar?

The catalyst for last week’s 2% push that took the S&P 500 back above its 50 week moving average (it hasn’t been stuck below it for more than a few days since 2011) had less to do with anything domestic than the major confidence boosted delivered by foreign central banks.  Thursday’s rally was ignited by Mario Draghi expressing his concerns over the lack stability in EM markets negatively impacting the Euro (making it too strong) and potentially laying the groundwork for an expansion of the ECB’s QE campaign in December as part of a concerted strategy of devaluation.  The markets certainly didn’t misread his intentions as the Currency Shares Euro Trust Fund (FXE) logged a nearly 2.1% loss for the week while hedged equity funds saw their ETFG behavioral scores surge last week with the iShares Currency Hedged MSCI Eurozone ETF (HEZU) seeing it’s score advance by almost 17 points over the week while the fund return 4.4%.  Even that stellar performance wasn’t enough to put the fund on our list of top 100 highest scoring funds where only one hedged European fund makes the list, the Wisdom Tree Europe Hedged Equity Fund (HEDJ) at #81.  Rate cuts by the People’s Bank of China on Friday helped fuel the rally for another day and kept a number of China A-share funds on our list of top performers but what captured our attention was how domestically oriented the list had become.

After last week’s surge by large-cap names like Microsoft and Apple, it’s not surprising that our Behavioral list has a distinctly American feel although the make-up of that list is a potential cause for concern.  Making a rare appearance on our list of top behavioral performers is the SPDR S&P 500 ETF (SPY) at #7 thanks to a 7.5% rally over the last month and while that gain has reinvigorated the bulls, the lack of support from the broader equities is somewhat troubling.  That large-cap earnings continue to beat lowered expectations and could soon be made potentially stronger by a falling dollar has been a familiar theme among investors and just one reason the list of our biggest quant movers for the week include names like the Vanguard Large Cap Index Fund (VV), Vanguard Mega Cap Index Fund (MGC) and Vanguard Industrials Index Fund (VIS) that have benefited the most from that trend.  The powerful rally by the S&P 500 however has pushed SPY back almost into oversold territory based on the 14 day RSI while the % of stocks back above their 50 day moving average is at 76%, a level not seen since February.  Meanwhile small and mid-cap names have picked up only a fraction of the large-cap sectors gains with the iShares Russell 2000 ETF (IWM) and SPDR S&P MIDCAP 400 ETF (MDY) up 2.62% and 3.74% respectively over the last month compared to that 7.5% gain for the S&P 500 we talked about earlier.

Equity rallies typically don’t have very broad beginnings and October’s is no exception with high performing materials and technology stocks on one end with double digit gains over the last month while healthcare stocks are barely treading water with the Health Care Select SPDR Fund (XLV) up a mere .86%, but that could all change on Tuesday when the FOMC holds it’s second-to-last meeting of the year.  Historically investors have written off the October meeting as unlikely to provide any new directions as it’s not followed by a press conference but given the high level of antagonism in public statements between members of the FOMC, the outcome of this meeting will be highly scrutinized. Hawkish members could view the recent drop in jobless claims as further proof we’re inching closer towards full employment and any indication that the FOMC might be close to hiking rates could send the dollar skyrocketing back towards its first quarter highs and help hedged foreign funds continue to outperform.  Retreat from rate hike speculation could help keep domestic stocks on top while igniting more sector dispersion with financials feeling the most pain.  No matter what the outcome, the pattern that has governed equity markets over the last four weeks is likely to be disrupted.

Thank you for reading ETF Global Perspectives!

_______________________________________________________________

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.

Fall 2015 ETP Forum NYC - Friday, 11/20/15

Fall 2015 ETP Forum-NYC
Friday, November 20th – The New York Athletic Club 8:00 AM – 6:00 PM
Date: Friday, November 20, 2015 Where: New York Athletic Club 180 Central Park South 9th Floor New York, NY 10019 (212) 247-5100	Attend the premier conference within the fast growing Exchange-Traded-Fund arena! With roughly $2 Trillion in U.S. listed ETF assets, the demand from the Financial Advisor and Institutional communities continues to grow for what many hail as the investment vehicle of the future. With ETFs providing access to markets that were formerly available to institutions, what’s the best way of positioning portfolios for 2016? Confirmed Speakers: ·         Chris Romano, Director of Research, ETF Global ·         Kevin O’Leary, Shark Tank/O’Shares ·         Matthew Fronczke, Director, kasina Research ·         Andrew Chanin, Founder, PureFunds ·         Joe Anthony, President, Financial Services Gregory FCA ·         Carlos Diez, CEO, MarketGrader Capital ·         Eric Alexander, Partner, Mad and Wall ·         Lisa Jane O'Neil, President, LJOPR Communications ·         Jason Trennert, Managing Partner, Strategas Research Partners ·         Michael Jabara, Head of ETF/CEF Research, Morgan Stanley  ·         Karl Snyder, Chief Market Strategist, Garden State Securities ·         Jason Nicastro, AVP - Research, LPL Financial ·         Chris Orlando, CEO, Elite Advisor Consulting ·         Michael Pellman Rowland, Morgan Stanley WM ·         Peter Meizels, Senior Vice President/Investments, Stifel ·         Steven Kreichman, Head of Americas Index Wealth Advisory and Channel Management, MSCI ·         John Cole Scott, CIO, Closed-End Fund Advisors See you there!
Click here to REGISTER
Accepted for six hours of CFA, CFP, CIMA® CE Credit for attendees. Intended exclusively for financial professionals and is closed to the public.
www.etpforum.org

Everything All the Time

It was another positive week for global equities but with nearly half of the S&P 500’s gains for the week coming in the last two hours of trading on the Friday, the mood among traders might be best summarized by a quote in Friday’s Financial Times from Divyang Shah of IFR Markets when he said that “What we have had is a risk rally, built on the relief that things have not deteriorated as fast as had been priced.”  And while the relief at improvements in Thursday’s Initial Jobless Claims and CPI reports was almost palpable sparking a strong 1.49% advance on the day, our list of the biggest movers and shakers at ETFG would seem to indicate that investors continue to search for direction in the post-Fed markets.  With more earnings reports and another FOMC meeting in two weeks, we continue to sift through our tables of score changers looking for clues on how investors are positioning their portfolios and are starting to find that indecision at the Fed is spilling over to investor portfolios with two distinct trends emerging depending on the news flow.

Our first evidence that investors might be of two minds on how to prepare their portfolios came from our list of funds that saw the biggest improvement in their weekly behavioral score where a pattern of country rotation seems to be taking shape.  Chinese stocks rallied last week on hopes that the increasingly negative economic news could be foreshadowing new government stimulus programs and at least one China fund made our list, the KraneShares CSI New China ETF (KFYP) but investors seem to be taking a breather after the fast and furious EM rally over the last few weeks.  Our list of top gainers has a distinctly European flavor including the WisdomTree International Hedged Quality Dividend Growth Fund (IHDG) and the iShares MSCI Netherlands ETF (EWN) seeing strong jumps in their behavioral scores while Brazilian funds dominate those experiencing the biggest weekly losses.  But where investor seem to be of two minds is when you change the time period from weekly to daily where the strong advance by the S&P 500 on Thursday and Friday led to a strong increase in investor interest in U.S. oriented funds over a wide variety of different sectors.

With data points supporting those who insist the Fed is behind the rate hike curve, strong action by the financials wasn’t overly surprising and while we’ve talked about the potential impact on smaller banks, two sector funds offering large cap exposure made our list for most improved behavioral score.  Weak trading revenue maybe the primary culprit behind the lackluster earnings reports this quarter, but Thursdays stronger-than-expected core CPI headline sparked a major one-day move among some of the largest banking names like Citigroup (up 4.44%), Bank of America (3.52%) and Goldman Sachs (3.06%) which helped lift the iShares Dow Jones U.S. Financials ETF (IYF) 2.03% that day and raise its behavioral score by 70% in just one day.  Joining the fun was the iShares U.S. Insurance ETF (IAK) fund whose behavioral score recorded a 55% gain on Friday thanks in no small part to strong performance by two names, AIG and Travelers, that make up nearly 19% of IAK’s portfolio.  Both funds offer concentrated exposure with significant allocations to their top ten holdings; IAK’s portfolio has more than 60% tied up in its ten largest positions and which might explain why another iShares sector fund, this time the iShares Dow Jones U.S. Healthcare ETF (IYH), also made our short list on Friday thanks to strong performance by Pfizer and Johnson & Johnson.

But we have what might be an even better example of investors trying to go in two directions at the same time thanks to two Vanguard Funds. Looking again at our list of top score changes for the week, the Vanguard Consumer Discretionary ETF (VCR) had a strong showing with a 23.06% gain and we can’t help but wonder how much of that was attributable to investors fleeing from the fallout from Wal-Mart’s weak earnings report at the start of the week which sent its stock plummeting nearly 10% in one day and dashed the hopes of investors who sought lower volatility in the consumer staples sector.   But even a 5.4% allocation to Wal-Mart wasn’t enough to scare investors of the Vanguard Consumer Staples Fund (VDC) with a strong 1.02% gain that pushed the fund back into the black for the week, keeping the fund within spitting distance of recent highs, and which saw the funds ETFG behavioral score surge more than 64% in just one day!  And while surging behavioral scores are always nice to have, each of the funds we’ve discussed today will see at least one component with an earnings report coming out this week including major announcements from Chubb (5% of IAK) after the close on Tuesday followed by Coca-Cola (8% of VDC) on Wednesday, investors should be prepared for more turbulence to shake up and the best laid plans of cautious investors.

Thank you for reading ETF Global Perspectives!

_______________________________________________________________

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.

ETF Global Portfolio Challenge - Leaderboard Update

With our inaugural virtual investment challenge well under way, we would like to recognize those students who boast the top performing portfolios as of last Friday's first rebalancing:

1. Matt Pagnotta - University of Pittsburgh
2. Teng Long Ho - University of New South Wales (Australia)
3. James Budd - State University of New York at Geneseo
4. Samuel Bauer - Baruch College (CUNY)
5. Shane Sutera - University of North Carolina at Chapel Hill

Of the 279 different ETFs selected in our contestants' portfolios, the following Issuers stand out in popularity:

• iShares - 60 products
• State Street - 36 products
• Powershares - 26 products
• ProShares - 23 products
• Vanguard - 23 products
• Direxion - 19 products

The performance period began Monday, September 21st and concludes on Monday, November 30th. The competition is far from over, so stay on the lookout for changes atop our leaderboard!

Enrollment for our Spring edition begins on Monday, November 16th and ends Friday, February 12th. The performance period will commence on Monday February 15th. For more information, please visit www.etfportfoliochallenge.com.

Thank you for reading ETF Global Perspectives!

Rocking the Boat

The momentum shift in the market last week was profound for those investors who spent the summer preparing their portfolios for the fallout from a tightening Fed.  While the powerful 3.26% surge by the S&P 500 sparked a debate among technicians that it was nothing more than short covering, maybe it wasn’t all that surprising when you consider that the summer rout brought us back to the lows of last October when concerns over the timeline for Fed tightening sent investors running for cover.  Our ETFG Behavioral Report shows new patterns that make sense when many are convinced the Fed’s plans to hike rates are on indefinite hold, but those who think the Fed might yet surprise us might want to study them carefully in case they plan to take the other tack.

Last week we were surprised to find two emerging market funds on our list of top 25 behavioral funds, so try imagining our amazement when we checked the list and discovered that 10 funds with an international focus were now crowding out the top spots that until just recently had been held by biotech funds.  Not surprisingly the top ranked fund is the iShares MSCI Emerging Markets ETF (EEM) which saw a 6.17% gain last week and whose behavioral score has surged by nearly 30% since late September as the possibility of a Fed rate hike began to dim.  While other EM funds appear on the list, the bigger surprise for us was that the weakening dollar has given a shot in the arm to those developed market economies so dependent on supplying commodities to the rest of the globe.  We first talked about the idea of using developed market ETF’s to gain exposure to resurgent commodities and a falling dollar last February (see “Dollar Doldrums) and while several of the funds we discussed including the iShares MSCI Australia Index Fund ETF (EWA) and the iShares MSCI South Africa ETF (EZA) rallied into the early part of spring; a stabilizing dollar and prospects for a Fed tightening led to a significant rout that sent them to scurrying back to support close to multiyear lows.

Even with three voting members of the FOMC saying a rate hike was still on the table last week, the lack of any bad news from China combined with a weakening dollar gave commodities a short in the arm and helped EWA and EZA manage serious gains (7.62% and 5.35% respectively).  That performance might have pushed EWA all the way to #43 on our list, but it was another Commonwealth country that was the true star last week with the iShares MSCI Canada ETF (EWC) surging up the ranks to come in at #9 thanks to a double whammy of strong price momentum and high short-interest despite slightly underperforming EWA with a “meager” 6.72% gain last week.  While the Australian dollar ETF (FXA) experienced a far more substantial surge of over 4% last week compared to a 1.8% gain the for the Loonie fund (FXC), consider the underlying holdings of the two iShares funds.  Both were intended to offer exposure to the broad equity markets of their respective nations and financial stocks make up the largest allocation in both funds, but EWA has a nearly 45% of its portfolio dedicated to that sector compared to EWC’s 31%.  And while EWA might have another 13.5% in materials, remember that Canada is just one big expensive oil well which has been hit hard by falling prices, so the resurgent price of oil has helped EWC’s 22% allocation to energy stocks (along with its 9% allocation to materials.)

Materials were on everyone’s mind last Friday as the start of the earnings season got underway Thursday night with a disappointing report from Aloca (AA) that sent the stock tumbling down 6.8% on Friday and weighed heavily on the SPDR S&P Metals and Mining ETF (XME) and Materials Select Sector SPDR Fund (XLB) although as .07% of the S&P 500, it barely made a dent on the broader equity markets.  But that worrisome start might be just the beginning of a difficult time for equities as the last Friday’s edition of the Factset Earnings Insight Report raises the possibility that earnings for the S&P 500 are likely to be negative for the third quarter (and for the first time since 2009, we could have two consecutive quarters of falling earnings) thanks largely to the energy and materials sectors.  Investors concerned about exposure to stocks with falling earnings should visit the ETFG Equity Grey Market Report as earnings are released to study the potential fallout for different funds and to reorient your portfolio accordingly.  According to Factset, the telecom sector should experience the strongest y-o-y earnings growth and typing Verizon’s ticker (VZ) into the search field brings up a long list of different products for your consideration from the heavily concentrated like the Vanguard Telecommunication Services Index Fund (VOX) to the more diverse WisdomTree High Dividend Fund (DHS).

Don’t let the Fed dictate every move in your portfolio this year.

Thank you for reading ETF Global Perspectives!

_______________________________________________________________

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.

Auguary ain't easy

In many ways, last Friday’s disappointing Jobs report was like a trip to an art museum in that there was something for everyone and no two people could arrive at the same opinion on what any of it meant.  According to some investors, equities managed a stunning comeback after opening deeply in the red as the decision on the Fed’s rate hike schedule was seemingly made for it while others believed it was simply an oversold rally after the S&P 500 bounced off long-term support below 1880.  And the possibility of hugging the zero bound for the indefinite future sent investors scrambling into long-term Treasuries and beaten down equity sectors with income producing potential like the MLP’s and yet high yield funds like the SPDR Barclays High Yield Bond ETF (JNK) couldn’t overcome the weak open on Friday and still closed in the red.  Rather than rehash every move of the day, we turn back to the ETFG Behavioral Reports to find out who had the best week ever and what it could mean for the markets going forward.

Friday’s surge helped put almost every asset class and equity sector in the green on Friday with the exception of bank stocks which were held back as the possibility of the Fed hiking rates becomes less certain and while that helped breathe new life into energy stocks, the biggest winners of the day were the gold miners with the Market Vectors Gold Miners ETF (GDX) surging over 8% and helping put the fund decisively back above its 50 day moving average.  The miners have been a regular topic here lately; in late July, we discussed how they were among our worst ranked sectors and while the August rally was short-lived, the base formed by GDX over the last few months has been one of the longest-lived since Ben Bernanke first announced the tapering of QE3.  Friday’s employment report may have investors wondering whether real rates will go negative and help boost the miners even more and while that might not have helped the fund enough to appear on our list of top behavioral movers for the week, GDX has come a long way since last July when it ranked near the bottom of our lists.  Re-ranking the ETFG Quant Report based on just the Behavioral Score shows GDX at #164 with a score of 57.4, just a little more than 3 points shy of making the top 100!

The miners weren’t the only ones to benefit from investor expectations of a permanently dovish Fed as those emerging market funds which also were at the bottom of the behavioral heap last July experienced a surge all their own.  It’s hard to miss the shifting of the wind with three emerging market funds making our list of funds experiencing the weekly biggest behavioral score change but more surprising was finding two funds on our list of the top 25 Behavioral Funds with the iShares MSCI Emerging Index Fund (EEM) at #7 and most surprising of all, the iShares MSCI Brazil Index Fund (EWZ) climbing the list all the way to #6!  If you’ve read any of the major financial publications, at some point in the last year you’ve read an article about the massive capital outflows affecting the emerging market nation’s and no more so than former investor favorite Brazil, which remains stuck in the worst of all possible worlds with lower growth, high inflation and a political scandal that makes the Republican debates look like C-SPAN.  Every dog has its day and with the Wisdom Tree Dreyfus Brazilian Real Fund (BZF) down 46% since its peak in July 2011 through Friday and EWZ down almost 64% in the same period, some investors are wagering the increasingly weak economic outlook here at home means the capital outflows might soon stop or even begin reversing themselves although the shifting fortunes aren’t about just the Real.  Even the Deutsche X-trackers MSCI Brazil Hedged Equity ETF (DBBR) experienced a strong 3.48% gain on Friday and a 2.22% gain for the week overall.

Days where nearly every sector comes up a winner are rare indeed and with U.S. equities no longer in danger of crossing into oversold levels, the real questions on investor minds is whether the Fed might really hold off on tightening and whether that’s enough to spark a sustainable rally.  Investors won’t have to wait long as both questions are likely to be answered this week with three different Fed Presidents; John Williams, Narayana Kocherlakota and Charles Evans due to speak at different events on Tuesday, Thursday and Friday respectively and while the economic calendar is fairly light with data releases it’s loaded with Treasury auctions that will test investor appetite for “risk-free” securities.  Now all we have to hope for is that the Fed doesn’t offer three different opinions on interest rates this week.

Thank you for reading ETF Global Perspectives!

_______________________________________________________________

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.

Chris Romano - Liquid Alts East Conference

For those attending the Liquid Alternative Strategies East Conference next week in NYC, our Director of Research, Chris Romano, will be featured on the panel below on Monday, October 5^th at 5:15 - please join us!

All event details are available at www.liquidalternativestrategieseast.com

Panel: ETF and Liquid Alts Converge, What It Means to Traditional Mutual Funds

• Alt ETFs: a small but growing part of the ETF universe
• With 1,700+ ETFs only 35 are absolute-return strategies with $2 billion in AUM, how big can this grow?
• Capturing Alpha with Sentiment: Utilizing the ever increasing body of news coverage in capturing Alpha within the ETF marketplace
  

Moderator: Eric Alexander, Partner, Mad and Wall

Simeon Hyman, Head of Investment Strategy, ProShares

Chris Romano, Director of Research, ETF Global

Thank you for reading ETF Global Perspectives!

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

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

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