LifeStageInvesting.com Featured in Barron’s

Congratulations to our client LifeStageInvesting.com, who was featured in the “Reboot? RoboAdvisor…” article on page 23 of this week’s Barron’s!  LifeStageInvesting.com has used our research to power their proprietary ETF Model Portfolios for the last 2 years. We thought we would mention a few things that we think make them so special – yes, toot our client’s horn a bit.......

For those unfamiliar with this unique platform, LifeStageInvesting.com is definitely not your ordinary RoboAdvisor. For starters, while the platform is used by many self-directed investors, their primary audience is mostly comprised of Financial Advisors. These Advisors use LifeStage to determine appropriate asset allocations based on specific life stage needs and then mirror those allocations to our ETF Model Portfolios. The result is a highly efficient, turn-key solution that works for the FA and the client.

While the burgeoning Millennial cohort precipitated the advent of the RoboAdvisor, the appeal of LifeStageInvesting reaches well beyond this singular profile. By addressing broader life cycle investment needs, LifeStageInvesting.com appeals to investors of all demographic profiles including Millennials, Retirees and all in between.

Here’s what we think is the biggest distinction – Investment Research. LifeStageInvesting.com provides comprehensive supporting research for its clients.  While this may seem trivial to some, we have not found one other RoboAdvisor that provides research on the underlying positions of their recommended  portfolios!  We also believe that we know why – because so many of the RoboAdvisors deploy selection processes that rely simply on expense ratios or other one-dimensional factors, it causes a problem. Specifically, that any sound investment research would find fault with some selections derived by such a method and therefore conflict with many of their portfolio selections.  Hence, the absence of investment research and a large piece of the value that LifeStageInvesting.com provides.

Oh and last but not least, it’s Free! – that’s right, in order to foster initial adoption and further the development of the platform, the site is open to all visitors. Now that said, there are future plans for enterprises to license and customize the platform for their specific users but nonetheless the site is open to the public and is available for all Investors and Advisors – so have at it - LifeStageInvesting.com !

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.

Lots Just Around the Corner

In addition to the Presidential race, there are two familiar topics that have become part of the daily conversation for Wall Street this year:  interest rate hikes and oil prices. All year, these talking points have been able to spark a rally and kill one just as fast with no remorse. With Economist and Central Bankers meeting this coming week, the market took a deep breath from some of the highs they made two weeks ago. The Economic Symposium is taking place from Thursday through Saturday in Wyoming. Investors will be listening closely to Janet Yellen’s Friday speech to see if major economic data has made Fed officials have either dovish or hawkish viewpoints for a possible interest rate hike in September or more likely by December.

With the event looming, investors were relatively quiet by mid-week, pulling out only about $328M from broad based equity exchange traded funds and putting in about $195M to fixed income ETPs, according to the ETFG fund flows reports.

In other economic news, OPEC made some bulls on oil come out of the woodwork in the last two weeks as prices rallied up 9% due to a change in sentiment about a possible freeze on oil production coming soon. The United States Oil (USO) ETF rose over 21% since the month of August started, going from $9.44 to $11.34. SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has also been riding the oil rally wave moving from $32.76 on August 1^st to $37.64 on August 19^th. XOP currently has a 68.6 ETFG Quant score and is ranked as a “B” overall grade in the ETFG Quant model. It also carries a 7 Green Diamond reward rating and 6 Red Diamond risk rating in the ETFG rating system.

In the end, major indexes are still riding high considering where we’ve come since the beginning of 2016. Let’s see what the Yellen affect will do to the Market this week and if OPEC will continue its bullish sentiment on a possible production freeze.

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.

Narrow but Records

“True genius resides in the capacity for evaluation of uncertain, hazardous and conflicting information.” - Winston Churchill

Though these words were not said about the stock market, they can certainly resonate with anyone who has been following it over the past year. As 2016 started, bullish sentiment was almost unheard of.  Macro factors throughout the global economy were too large to miss and fear overtook the investment community.  Eight months later, we are in the dog days of summer.  China’s economy had almost collapsed, Britain voted to exit to European Union and major countries have introduced negative interest rates. The anomaly here is that the stock market is hitting record highs. As an investor, if you decided to stick with the sentiment from the beginning of the year and did not try to evaluate the uncertain, hazardous and conflicting information that 2016 has bought, you would’ve missed out on it all.

Switching gears to our exchange-traded-funds world, we’ve yet again seen the largest inflows into equity ETFs.  As yields throughout the global stock markets continue to shrink, the returns from equities look tempting even though they bring on more risk.  Another $3B found its way into those funds by midweek, as you can see on the ETFG fund flows report.

The technology sector has been a major player in the markets rally to record highs and the Technology Select Sector SPDR Fund (XLK) has been riding that wave. This week, the fund hit yet another closing day high at $47.16 and has returned nearly 10% YTD.  This came as Apple (AAPL) returned to mid-April levels and Microsoft (MSFT) was tittering with a new 52-week high.  They both make up 13% and 10% of the fund respectively.

As for the ETFG Quant movers, we saw the greatest change in the iShares Currency Hedged MSCI EAFE Small-Cap ETF (HSCZ), which added 8.21 to its Quant score.  It is currently graded as a “B” in our Quant scoring. This fund seeks to reduce the impact of foreign currencies, relative to the U.S. dollar in small-cap, in non U.S. and Canadian equities. As said last week in our blog, the current environment of stretched large cap equity valuations make small cap ETFs look attractive as vehicles of growth and price appreciation. Compile that with the strong U.S. dollar and increasing possibility of an interest rate hike by the Federal Reserve and you find a nice fund that can both protect you and offer some growth.  Let’s see what happens after Summer when everyone returns.

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.

Summer Highs

After stumbling at the beginning of the week, U.S. stocks surged to record highs on the heels of a recovery in oil prices and a second consecutive month of upbeat employment data. Stocks began the week slightly lower after disappointing PMI data from the Eurozone and China, Eurozone stress test results and the BOE's rate cut, conjured up fears of a contracting global economy. However, these worries were quickly offset after the release of July's non-farm payrolls report revealed the U.S. 255,000 jobs in July, well above the consensus estimate of 180,000. The strong July jobs report helped push the S&P 500 and NASDAQ to new all-time highs on Friday. Both benchmark indexes ended the week up 0.4% and 1.1% respectively.

Not surprisingly, the rally in these widely followed benchmarks fueled gains in broad-based equity ETFs. ETFs that track the S&P 500, including the Vanguard S&P 500 Index Fund (VOO) and iShares Core S&P 500 ETF (IVV), registered new intraday highs in the immediate aftermath of Friday's job report announcement. Additionally, following a sixth consecutive week of gains for the NASDAQ, the Powershares QQQ Trust (QQQ) topped all other funds in inflows this week as it gathered $904 million in fresh assets. Overall, U.S. equity-based ETFs took in $780 million for the week.

Despite the rally in U.S. equities and signs of a strengthening U.S. economy, emerging market and gold-based ETFs continued to attract investor capital. A look at our fund flow summary reveals that, on an absolute basis, 4 out of the top 10 inflows leaders were emerging market funds, with iShares Core MSCI Emerging Markets ETF (IEMG), iShares MSCI Emerging Markets ETF (EEM), iShares JP Morgan USD Emerging Markets Bonds ETF (EMB), and Vanguard FTSE Emerging Markets ETF (VWO) all adding over $300 million in fresh assets. We expect capital to continue to flow into emerging markets, as the ongoing search for yield continues.

Additionally, our fund flow summary illustrates that caution lingers in the markets as the defensive play and rate-sensitive SPDR Gold Trust (GLD) ranked second in fund inflows for the week, adding over $830 million in assets.

Our weekly Quant Movers list was dominated by small cap ETFs, with the Vanguard Russell 2000 Value ETF (VTWV), Vanguard Russell 2000 (VTWO), Schwab US Small Cap ETF (SCHA), and Powershares Russell 2000 Pure Value Portfolio (PXSV) were among our top gainers. In the current environment of stretched large cap equity valuations, small cap ETFs may offer investors an attractive option, as vehicles of growth and price appreciation.

With only 66% of S&P 500 companies having reported second quarter earnings, earnings releases will continue to drive market activity in the week ahead. Given the volatility surrounding earnings releases, it is important to be mindful of funds that devote large weightings to single companies. Expect ETFs, such as the Consumer Discretionary Select Sector SPDR Fund (XLY) and SPDR S&P 500 Pharmaceuticals ETF (XPH), with their large weightings towards Disney and Allergan respectively, to be particularly affected by this week's announcements. If you are interested in taking a deeper look at funds that may be affected by upcoming earnings releases, visit our ETF Equity Exposure Summary to identify funds that have large single-name exposures.

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.

Market Circle-Up

Global equity markets exhibited caution in the final week of July amid the latest round of corporate earnings and key economic data releases. Quarterly earnings were largely responsible for the return differentials in the major U.S. stock indexes, as the tech-heavy NASDAQ advanced 1.22% for the week, whereas the Dow Jones Industrial Average shed 0.8% and, despite registering an intraday record high, the S&P 500 declined 0.7% for the week. Although momentum from the post-Brexit rebound appears to be waning, U.S. stock indexes still remain at near record levels, with the NASDAQ, Dow Jones and S&P 500 up 6.60%, 2.80%, and 3.56% respectively for the month of July.

Better than expected earnings reports from several new age bluechip tech companies, including Facebook (FB), Alphabet (GOOGL), and Amazon (AMZN), helped boost the NASDAQ index. It is no surprise, therefore, that funds that devote large weightings to these tech behemoths, such as the iShares U.S. Technology ETF (IYW), have benefited from the warming of investor sentiment towards technology companies - IYW was up 8.41% for the month of July.

On the opposite end of the spectrum, the Dow was hampered by the impact of continued sluggish global economic growth and the recent descent of oil prices. After reporting second-quarter, same-store sales growth that fell short of estimates, McDonalds (MCD) weighed on the Dow's performance.

Additionally, with U.S. crude oil registering its biggest one-month decline and approaching a bear market from its recent June high of $51.23 a barrel, energy companies added further pressure to the Dow. Of course, what happens in the underlying, comes out in the ETFs and therefore our fund flow summary reflects the struggles of the energy industry.  For example, the Energy Select Sector SPDR fund (XLE) experienced nearly $150 million of redemptions during the past two weeks.

The overall headwinds pressuring the Dow are also evident in our Behavioral score of the SPDR Dow Jones Industrial Average ETF (DIA), dropping from a score of 61 at the beginning of the week to its current score of 48. With overlapping component companies, the larger, more diversified S&P 500 essentially split the difference between the NASDAQ and the Dow for the week.

Aside from a slew of earnings releases, global central bank policy announcements captured the attention of investors. The Federal Reserve held the line on interest rates, but conveyed confidence in the US economy and raised the possibly of a rate increase as early as September. This improving outlook was somewhat offset by a downward revision of first-quarter GDP growth and a disappointing 1.2% annual growth rate for second-quarter GDP.

Across the Pacific, the Bank of Japan surprised many market observers by not expanding their monetary and fiscal stimulus packages. The lone action from the BOJ was an expansion of its equity ETF buying program. This measure appears to have offered immediate support for Japanese-based ETFs, as the iShares MSCI Japan ETF (EWJ) was the top gainer on our weekly Quant Movers list.

As we look toward the week ahead, the marquee economic event will be the U.S. employment report on Friday. A strong jobs report could bolster the Feds confidence and increase the possibility of a September rate hike. Apart from the employment report, investors will be paying attention to the Bank of England Monetary Policy Committee's meeting and the release of durable goods orders, vehicle sales, and PMI data.

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 of or from that investment to the investor.