Yield for Sale

All those who wanted nothing more than to end 2015 in the black were well-rewarded for staying long equities last week as Santa delivered not only high temperatures but a strong rally (albeit on low volume).  The S&P 500 gained 2.76% and gave those who put off their annual reallocations a chance to end the year on a high note.  While most will tell you that looking for investor signals amid such a weak rally is like trying to measure the Grinch’s heart, we sifted through an otherwise stellar week for clues on the shape of things to come.  While many investors seem content to ride out the clock and hope their large cap positions keep paying off for another year, our ETFG Behavioral Models seem to suggest that sticking to an old playbook might be a surefire way to end up on the naughty list in 2016.

Human beings are hardwired to find patterns in nearly everything, which might be one reason why investors love McCallan tables and technical analysis so much, looking for tradable patterns in the history of annual returns hoping last year’s losers are next year’s winners.  For some investors, that means studying their charts and wondering if Caterpillar’s 6.5% rally last week means that the “Dogs of the Dow” might bite again in 2016, but others went further afield in their quest for potentially extreme outperformance.  One of the worst performing asset classes, MLP funds, saw their Behavioral Quant scores surging last week on heavy volume with the UBS ETRACS Alerian MLP Infrastructure Index ETN (MLPI) making the list of top score changers thanks to a 14.5% return that blew away the broader equity markets!  But MLPI wasn’t the only fund that saw its score surge last week as it seemed that almost every other fund was getting in on the action like the iPath S&P MLP ETN (IMLP) up 14.76% although there was no premium being paid for higher yielding funds like the Yorkville High Income Fund (YMLP) up a mere 12.89% despite its ETFG Behavioral Score surged more than 13% for the week.  With even the broader energy sector funds like the Energy Sector Select SPDR (XLE) outperforming the S&P 500 last week, many will ask whether we’re on the cusp of a recovery in energy stocks or are we just witnessing a short lived triumph of hope over fear?

It’s hard not to be suspicious of any MLP rally after many funds found themselves facing the last two weeks of December down somewhere between 40%-50% on the year and that price erosion led many to sport double digit yields which is hard for even the most cautious investor to pass up.  Last week’s big rally might just seem to be another case of investor greed taking charge, a big part of the dogs of the dow and other value investing strategies is the belief in ‘mean reversion’ or that the performance of different asset classes will converge over time and eventually make all losers winners and vice versa meaning any momentum reversal could be the start of a new uptrend.  MLP funds have been slowly gaining momentum throughout the second half of December, partly after reaching oversold levels following Kinder Morgan’s announcement of a dividend cut that led many to conclude the sector was close to rock bottom which sentiment got a big boost on Monday when ONEOK Inc (OKE) offered positive guidance on 2016 and left its dividend rate unchanged.  Unexciting as that may sound, it helped draw investor attention to the fact that many MLP payouts have remained largely stable and could offer strong upside potential to the more nimble.

Another factor to consider in the long-term case for MLP’s is that they were just one of the sectors with an inverse correlation to the U.S. dollar that received a strong boost from the bucks slight losses last week as the Powershares DB US Dollar Index Bullish Fund continued to struggle following the Fed’s first rate hike in six years.  Among the biggest winners was the WisdomTree Global Natural Resources Fund (GNAT) that delivered a 5.14% return last week as its ETFG Behavioral Score rose over 94% but consider carefully what’s in your fund before rushing out to add natural resource exposure back to your portfolio.  GNAT’s struggled against other funds in its space this year thanks to a large energy allocation, nearly 50% of its portfolio, that many other funds in the space lack as the average natural resources fund only has a 43% allocation to the sector according to Morningstar.  The sector heavyweight fund remains the iShares North American Natural Resources ETF (IGE) and it’s 83.5% allocation to energy stocks would seem to be a slam dunk for energy hungry investors but the fund also has a 1.7% allocation to gold stocks while the MarketVectors Natural Resources Fund (HAP) has a 5.7% position in the miners which helped it outperform both IGE and GNAT last week.  But for those looking for a more balanced (and less political) solution, GNAT might be a good addition to your watchlist.

With traders coming back from the holidays and just four days until New Year’s Eve, we can’t wait to see what twists and turns are waiting for investors but it’s safe to assume that sticking with an old game plan is a recipe for trouble at some point!

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.

Extend and Pretend

Wednesday’s much-anticipated decision by the FOMC to raise rates and end the second longest rate hike “dry spell” since the inception of the Federal Reserve has us wondering about how much the world has changed since then and what it could look like in 2016?  The last time the Fed hiked rates the Iraqi insurgency was raging.  While the backdrop might be different, one perennial holiday tradition is the release of bullish outlooks from equity strategists for the upcoming year even as more sober investors sent stocks reeling late in the week as the Fed began tightening monetary policy while a number of indicators are flashing trouble ahead.  Even though Janet Yellen’s Christmas gift to the markets might be more confusion as investors try to manage their year-end reallocation, we’re determined to provide some holiday clarity by turning to our ETFG Quant Movers Report to help investors separate signals from noise and determine whether 2016 will be another year to forget.

It seems that most market prognosticators are simply using their own version of “extend and pretend” by taking their now year-old forecasts for 2015 and replacing the 15 with 16 hoping to erase all memory of the fact that average forecast for 2015 was a 10% gain.  Goldman Sachs, Merrill Lynch and Fundstrat so far have carried over their 2015 forecasts into next year while UBS, RBC and Morgan Stanley have adjusted their previous predications up or down by 100 bps or less as most seem to acknowledge that earnings growth will have to replace multiple expansion although neither was present this year.  That might be reason enough to take their recommendations with a grain of salt although a glance at the charts might give the forecasters a boost heading into the end of the year.   Even as the S&P 500 found new ways to disappoint last week, our technician friends would be the first to point out that it’s quickly advancing towards strong prior support at the 2000 level that has helped to restrain it in the past while asset allocators could find hope as the Russell 2000 index outperformed its large cap cousins.  Friday’s quant movers report tells us that it might be too soon for a Christmas miracle and that last week’s outperformance by small-cap stock indices was more about not holding Apple.

Some of the funds that saw the biggest gains in their weekly fundamental score (as their prices fell) on Friday were 2015’s biggest winners in the megacap space including the Vanguard Mega Cap Growth Fund (MGK) or the SPDR DJ Industrial Average ETF (DIA) with a 124% and 79% increase in their respective scores and their losses help explain why small-caps “outperformed” last week.  Both funds have large allocations to Apple which suffered a 6.3% retreat for the week as analysts expect that the iPhone sales might be in danger of plateauing in 2016 which sent investors scurrying for the exits and left the stock in the red for 2015.  At 4.2% of DIA and nearly 9% of MGK (not to mention the largest single stock in the S&P 500), Apple’s movements can have major implications for broader markets and the pain is being felt throughout the markets.  Apple’s performance sent tech funds like the Technology Sector Select SPDR (XLK) with a nearly 15% allocation soaring at the start of the year and high up on our list of top behavioral scoring funds.  Now XLK can barely crack the top half of funds we screen at ETFG and those who visit Barron’s review of forecasts for 2016 should note that technology stocks remain a favorite pick for nearly all the major investment shops.  As to small-cap stocks outperforming for the remainder of 2015, Santa might have a big lump of coal for you this week as the % of the NYSE currently trading above their 200 day moving average hovers at 25% while the larger market cap S&P 500 actually rose slightly w-o-w to 40%.

One thing not on any forecasters radar would be those international equity and other inverse dollar positions we’ve discussed over the last few weeks, most notably emerging market equities where the iShares Emerging Market Equities Fund (EEM) held on to most of its gains from the start of the week to outperform the S&P 500 by more than 380 bps.  While that performance helped keep EEM on our list of 100 top behavioral scoring funds, the real breakout stars for the week were a series of smaller funds with a more “balanced” allocation that reduces the weighting given to Brazilian stocks in favor of smaller markets.  It’s not surprise that a fund like the Guggenheim MSCI Emerging Markets Equal Country Weight ETF (EWEM) is on the list after its weekly Behavioral Score surged more than 63% last week thanks to a smaller allocation to Brazil although the fund does have a larger overall allocation to Latin American stocks thanks to 300 bps overweight’s to Chile and Colombia.  The biggest difference between EWEM and EEM is the position of Chinese equities where EWEM holds just over 4% compared to 25% for EEM and for those who think that’s a bridge too far; you should consider one of the other big movers last week, the SPDR S&P Emerging Markets ETF (GMM.)  In fact, GMM has over 30% of its portfolio in Chinese equities and nearly 70% in Asian equities overall including a nearly 12% position in Indian stocks which were among the biggest winners last week.

While extend and pretend might be a good strategy for some, how confident are you about where 2016’s winners will come from?

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.

Out with the Old

Managers who planned to let their positions coast for the rest of December were in for a rude awakening last week as the persistent weakness plaguing high yield bonds for much of the year (and markedly since October) spread to the equity markets where even large-cap equities managers discovered that while a rising tide might lift all boats, none can stand up to a perfect storm.  Red dominated through the markets on Friday with the only notable exceptions of green being in the REIT sector which dominated Friday’s Quant Movers report showing only global REIT funds finding favor while U.S. funds were discarded as investors priced in more dollar weakness.  Even more terrifying for investment professionals is the thought of what happens when they head home for the holidays to face their families still nervous about markets that haven’t been this weak since 2011. So in this week’s Monday Morning Update we’re turning to “alternative” fund categories looking not just for signs of holiday hope, but smart options which hopefully will allow us to enjoy our eggnog in peace.

We start with smart beta and specifically low volatility funds which never claimed to offer immunity from market corrections but good luck telling that to investors who in the last three months have poured hundreds of millions into the two largest funds, the iShares MSCI USA Minimum Volatility ETF (USMV) and the PowerShares S&P 500 Low Volatility Portfolio (SPLV), that lost 2.46% and 2.93% respectively last week compared to the S&P 500’s 3.8% rout.  To understand what low volatility strategies can and can’t do for you, make a quick trip to the iShares and Invesco websites where you’d start to wonder if maybe they hired the smart marketing people as USMV and SPLV have a specific message.  Low Vol strategies focus on delivering a positive ratio of the market’s upside for the amount of downside potential you would be taking on and that’s not the only similarity between the two funds.  Turning to upside/downside capture ratio, both funds have managed to capture around 83% of the markets upside over the last three years compared to 68%-72% of the downside despite having very different strategies although there is a certain amount of sector overlap.  Both funds have healthy allocations to REIT’s like Public Storage and Avalon Bay which helped them outperform the S&P so far in 2015, but potential investors should remember they’re passively managed strategies that may not react as quickly to market developments as your angry Aunt Ida will.

What about those advisors whose clients have been sitting on cash, have itchy trigger fingers or just want something more than another bond fund?  If you REALLY can’t wait for a better buying opportunity then use the ETFG scanner to search for “Alpha-Seeking” funds where there are a number of actively managed strategies with a broad mandate typically built around the concept of “capital preservation” or participating in the market’s upside while limiting the downside exposure.  That may sound similar to low volatility’s pitch, but instead of focusing on managing the equity-to-bond ratio, many “alpha-seeking funds” plan to deliver positive alpha by using different asset classes and rotation strategies to offer low correlations to the broader market, which during the go-go years of 2012 and 2013 when the S&P 500 marched upwards in a straight lines makes for low returns and challenging comparisons.  One relatively new fund that’s been successful in gathering assets is the WBI Tactical Income Shares ETF (WBII), which has handily outperformed Morningstar’s Conservative Allocation Category in 2015 (down .58% compared to the category’s 3.7% loss) while only slight trailing the S&P 500.  Unlike some funds which rotate between different asset classes, WBI’s team actively manages the duration and make-up of their core bond portfolio while using a quantitative system to add equity exposure when appropriate, currently less than 15% of the portfolio.  This make-up is why it’s labeled as a conservative allocation fund and helped it keep last week’s loss to just .22%.

By now you’ve noticed how tactfully we’ve danced around the subject of bond funds and while some of that reluctance to tackle the fixed income arena comes from a desire to explore alternative strategies, it’s also partly due to the limited number of “active” ETF strategies for clients to consider.  Mutual fund investors have a wide variety of options under the category of “strategic income” which typically consists of strategies that are not easily benchmark defined due to high turnover and often low to negative duration.  Using the ETFG Scanner to search for actively managed “broad debt” funds, brings up 15 options that when organized by trailing one month performance are almost bookended by two industry titans and rivals, the PIMCO Total Return ETF (BOND) and the newer SPDR DoubleLine Total Return Tactical ETF (TOTL) which since its introduction last February has quickly risen to be almost half the size of BOND.  While most investors might consider the two to be interchangeable or prefer TOTL for its lower modified duration, careful investors should take note of from where there duration is coming.  Both avoided high yield but TOTL, like Doubline’s Total Return mutual fund, has a strong focus on mortgage backed securities while the most recent commentary from BOND’s managers point to U.S. Treasuries as the primary duration contributor.

No matter what their defensive inclinations, investors certainly won’t lack for options if they get cornered by Cousin Eddie when he comes looking for free investment advice.

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.

Spring 2016 ETF Global Portfolio Challenge

Registration for the Spring 2016 ETF Global Portfolio Challenge is open and already students from many new academic institutions and one new continent have signed-up. Our participant school base has now expanded to students in over 75 schools from five continents.

Undergraduate and Graduate Students from all academic disciplines are invited to participate in the Spring 2016 ETF Global Portfolio Challenge. Registration will close on Friday, February 12, 2016. The Performance Period commences on Tuesday, February 16th ending on Monday, April 25, 2016.

For more information including registration, rules, eligibility, timeline and prizes, please visit ETF Global Portfolio Challenge  Also please follow along @ETF_Global and the hashtag #ETFWizards

Please join us in welcoming the newest participating schools:

• UCLA
• West Chester University
• Valencia College
• University of Technology Sydney
• Federal University of Minas Gerais (Brazil)
• Clemson University
• Michigan State University
• Bocconi University (Italy)
• American University

Thank you for reading ETF Global Perspectives!

A Large Cap World

To start this month, the S&P 500 recorded four consecutive +/- 1% days for the first time since August as investors returned from a long holiday weekend only to find their long dollar positions in jeopardy.  News that Mario Draghi and the ECB were saving their big guns for when they were truly needed sent the Euro surging and the markets spiraling downwards so that by Thursday night, the S&P 500 was nearly flat on the year only to have it bounce back by over 2% on Friday and leave it largely unchanged for the week.  The S&P 500’s minute change might recall those words of Shakespeare when Macbeth spoke of “sound and fury, signifying nothing” but for those whose livelihood depends on delivering outperformance, it was a desperate struggle to stay on the right side of the line for 2015.  For those with a broader mandate or long-term view, it’s a chance to peel back the curtain and see a market more desperately leaning towards one side than ever before.

Friday seemed to be one of those days where you had to try hard to lose money as the rising tide lifted all boats.  Outside of the energy sector, a heat map would show almost nothing but green no matter the asset class as domestic and international equities, long-term bonds and even commodities were higher on the day and those who visit our ETFG Quant Movers page won’t find much that surprises them.  Among the biggest Quant movers on Friday were those funds with heavy financial exposure including the PowerShares S&P 500 Low Volatility Portfolio (SPLV), the SPDR S&P Insurance ETF (KIE) and the First Trust Financials AlphaDEX Fund (FXO) as November’s Employment report seemed to guarantee a rate hike in two weeks.  Switching to the ETFG Behavioral Top 25, both SPLV and KIE have seen such a strong increase in their scores that they now make the top 10 along with three other financial funds but the more you study the list, the more apparent it becomes that the divide between large and small, growth and value funds has reached a very dangerous level.

One thing that could make even a casual observer anxious is that the number one spot is currently held by the iShares Russell 1000 Growth ETF (IWF) reflecting that Friday’s rally was very much a large cap affair as the iShares Russell 1000 Value ETF (IWD) continued to lag the broader markets with a 1.6% advance compared to the S&P 500’s 2.05% and IWF’s 2.12%.  But to understand how truly extreme the situation has gotten, you need to consider that nearly 1000 bps separates the two funds' 2015 returns as IWD continues to be weighed down by a 12% allocation to energy stocks even though Friday’s rally included mega-cap energy names like ExxonMobil and Chevron.  The average actively-managed, large value fund manager is down 1.57% in 2015 compared to a -1.69% loss for the Russell 1000 Value Index. So it’s possible that the two day rout which brought the S&P 500 back to its starting point for the year was an irresistible opportunity for fund managers looking to catch ahold of a trend and potentially avoid another year of underperformance and even a minor bump in exposure to some of 2015’s strongest tech names like Microsoft could mean making it into the upper half of managers for 2015 and avoiding a costly job search.  Small wonder then that only three international funds make the top 25 list while there are seven funds with the word “growth” in their names and while more than 52% of the S&P 500 is above its 200 day moving average, only 36% of the NYSE can say the same.

Investors looking for divergences that might signify a new trend should keep their eyes focused on those dollar and interest rate sensitive assets that somehow found a way to put more points on the board last Friday and there were a lot of them.  A number of long-treasury funds including the iShares 20+ Year Treasury Bond ETF (TLT) and the Vanguard Extended Duration Treasury Fund (EDV) gained on the day as investors bet that long-rates will be less susceptible to rate hikes, but the strongest performers were among the most unloved assets in the bargain bin.  Even as the dollar managed to recover some of its prior losses, a number of agricultural commodity and precious metals funds continued to outshine the broad equity market in a sign that some investors are planning ahead for what comes after the rate hikes.  It might seem counterintuitive, but with the ECB holding off on deploying its heavy artillery some traders might have decided to lock in their long dollar profits before the upcoming FOMC meeting and the end of the calendar year, potentially restricting any further dollar gains.  Among the biggest movers was the Market Vectors Gold Miners Fund (GDX) whose 5.33% return on Friday added to the strong performance earlier in the week and brought the fund’s total gain to just under 10.3% for the week on strong volume while it’s ETFG Behavioral score has risen over 30% in the last two weeks.  Even the SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) gained 2.22% and 3.05% on Friday respectively as investors wager the Fed’s rate hikes will be shallow and short lived.

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 Portfolio Challenge Winners Announced!

Monday, November 30th marked the conclusion of our inaugural ETF Global Portfolio Challenge. During the Fall 2015 semester, students from four continents vied to claim the top performing portfolio.

There was change atop the leaderboard throughout the performance period and only a select group of students consistently ranked among the contest’s top performers. By the end of the performance period, five students emerged from the competition.

We are happy to announce these winners of the Fall 2015 ETF Global Portfolio Challenge!

Name	School/Year	Total Portfolio Return
1. Matthew Tarka	Xavier University (2019)	15.52%
2. Wyatt Smith	University of Central Florida (2017)	11.27%
3. Vasanthan Thiruvadi	California State Polytechnic University, Pomona (2017)	10.43%
4. Teng Long Ho	University of New South Wales (2016)	10.41%
5. Matthew Parron	Fairfield University (2017)	8.45%

These students demonstrated exceptional investing acumen and portfolio management skills. For their impressive performance, these students will be recognized and rewarded in a variety of ways, including at the upcoming Spring 2016 ETP Forum on April 6th at The New York Athletic Club.

Undergraduate and Graduate Students from all academic disciplines are invited to participate in the Spring 2016 ETF Global Portfolio Challenge. Registration is open and will close on Friday, February 12, 2016. The Performance Period commences on Tuesday, February 16th ending on Monday, April 25, 2016.

For more information regarding registration, contest rules, eligibility, timeline and prizes, please check out ETF Global Portfolio Challenge and follow along @ETF_Global and the hashtag #ETFWizards

Thank you for reading ETF Global Perspectives!

Spring 2016 ETP Forum-NYC / Save-the-Date: Wednesday, April 6, 2016

From our partners at the Expert Series:

Thank you to all who joined us for the Fall 2015 ETP Forum-NYC on Friday, November 20^th and for making the event such a success.  We also want to thank our wonderful Sponsors for their continued support.

The ETP Forum will expanding this upcoming year and will be held several times in 2016 in a variety of cities including New York and Chicago (May/June) with additional cities are under consideration for the 2nd half of 2016.

Please save the date for the Spring 2016 ETP Forum-NYC on Wednesday, April 6, 2016 at The New York Athletic Club.

All the respective events' information will shortly be available at www.etpforum.org and we look forward to seeing you at another of our events.

Thank you for reading ETF Global Perspectives.

ETFG White Paper: "Capturing Alpha with Sentiment - Large Cap Equity"

Congratulations to our Director of Research, Chris Romano and Research Associate, Joe Gelin for their recently released White Paper entitled "Capturing Alpha with Sentiment - Large Cap Equity."

This study was conducted in conjunction with RavenPack Research to test RavenPack's "91 day Sentiment Index" within US Listed, Equity ETFs as to whether sentiment in the media may provide the ability to capture alpha.

We would like to thank RavenPack Research and Guggenheim Partners for supplying data used for the study and encourage you to review the findings at:  Capturing Alpha with Sentiment - Large Cap Equity

Thank you for reading ETF Global Perspectives.