Wrapping-Up 3Q

As we approach wrapping up the 3^rd quarter of 2016, it seems very similar to how we both started the 3^rd quarter and wrapped up other recent quarters which was watching the Fed and gauging their posture on when to raise interest rates. Last week’s market activity began slowly with the obvious anxiety over the Fed’s announcement and predictably the upswing came after the Fed decided not to raise interest rates. The week ended however on a small downward trend with the Dow Jones increasing by .8%, and the S&P 500 and Nasdaq both increasing by 1.2%.

Most sectors had a positive week with Real Estate benefiting the most by the Fed’s decision and up 3% for the week. One stock that enjoyed a rumor-filled week was Twitter (TWTR).  With takeover talk abuzz that either Google or Salesforce.com might be lining up to take over Twitter, TWTR was up over 20% for the week. Looking at our ETF Global ETF Exposure report, we can see that the ETFs with the biggest holdings of Twitter are SOCL (Global X Social Media Index ETF), MILN (Global X Millenials Thematic ETF), and PNQI (Powershares Nasdaq Internet Portfolio).  SOCL exposure to TWTR is 9% while MILN and PNQI have 3% exposure.  Each of these ETFs had a roughly 3% return this week.

In ETF news for the week, Advisor Shares has filed for the first actively managed exchange-traded-fund with performance-based fees. They will charge .75% +.1% if the ETF beats the benchmark and -.1% if it doesn’t.  It will be interesting to watch investor reaction to this type of fund and fee structure and whether more funds decide to follow suit.

Within our ETFG Quant Movers, the biggest changes were for JPXN which jumped roughly 13% in its ranking, QTWN which moved 11.46% and IVAL which improved 10.11%.  Heavily focused on the Asia-Pacific region, these ETFs benefited from the Bank of Japan announcement that it would introduce a bond-purchase program which sent stocks soaring. On the downside of the Quant Movers, IEMG, SCHB, and HDEF dropped 10.79%, 10.55%, and -9.98% respectively in their ETFG Quant Rankings.

Last week we had very little movement in the leadership of our our ETFG Weekly Select List. Roughly 80% of the ETFs in their respectful categories maintained their number 1 spot. 1 ETF however that made a jump an enormous jump in the Seeking Alpha Category was IPKW, PowerShares International BuyBack Achievers Portfolio, which leaped from number 4 to number 1 this week – could be worth taking a deeper look.

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.

Registration Open - Fall 2016 ETP Forum NYC - Tuesday, November 29th

Registration is now open for the Fall 2016 ETP Forum - NYC on Tuesday, November 29^th at the New York Athletic Club! Chris Romano, our Director of Research, will again Chair this terrific event.

About The ETP Forum

This one-day symposium convenes some of the most widely recognized experts in Exchange-Traded-Funds and some of the brightest minds in Capital Management.  The ETP Forum features renowned speakers addressing cutting-edge topics within a vibrant and intimate learning atmosphere.  Now in its 5^th year, this semi-annual conference continues to provide thought leadership on one of the most exciting investment vehicles in the market, namely Exchange-Traded-Funds.

Register here: Register - Fall 2016 ETP Forum

Video of past ETP Forums is available at Expert Series TV  All event information will be on the event site at www.etpforum.org    Add to Calendar

We look forward to seeing you and 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.

Indigestion

US Stocks continued to suffer indigestion as investors pondered a number of familiar concerns. The S&P 500 eked out a gain for the week of .53% to close at 2139.16 while the Nasdaq Composite saw a more robust gain of 2.31% -- the gain was largely a result of Apple’s share price while the Russell 2000 rose a paltry .46%.

Last week’s economic data continued to show a soft economy which would seem to argue that a rate hike will not come any time soon. More disturbing for investors were the latest poll reports showing the gap narrowing between Clinton and Trump. Investors expect no new surprises with a Clinton Presidency however a Trump win would open Pandora’s box of uncertainty which weighed on stocks. While fiscal spending is likely to climb under either scenario, a Trump win will likely result in a larger spending boost thereby resulting in a higher deficit than a Clinton White House.

The upcoming Federal Reserve Open Market Committee (FOMC) meeting this Tuesday and Wednesday will be closely watched by investors to see for any indications of rate increases before year-end. Interestingly, our friends at Convergex observed last week that 80% of total annual excess US Stock Returns from 1994 to 2011 came in the 24 hours or so before an FOMC Meeting. This is according to a paper published by The Journal of Finance by the NY Fed in 2013.

Bank of Japan meets Wednesday and investors will be looking there as well for any change in accommodation. The fact that Central Banks are guiding markets seems to turn upside down the traditional free markets’ notion of Adam Smith’s invisible hand moving markets to that of the visible stick of Central Banks directing markets.

To play the FOMC trade, see broad based ETFs, such as DIA, IWY, SCHA and VTI which score high on our weekly Quant Movers List - as well as interest rate sensitive ETFs like KIE, KRE and IYG from our Select List. These are potentially good vehicles to execute one’s view on any outcome of these meetings or the old adage of "buy on the rumor and sell on the news."

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.

Around We Go, Again

While being a short week last week, it ended with a bang for investors. Friday brought a long awaited sell-off in the US markets with the S&P 500 losing 2.5% on the day while Nasdaq Composite was down 2.3%.  So broad was the sell-off, that investors could not even find comfort in so-called Low Volatility funds like the SPLV – which dropped 3% -- 50 bps more than the S&P 500!   The VIX Index jumped to 17.5%.  Equity income proxies such as XLU in Utilities and the REIT sector sold off as well.  Interestingly, short term governments barely reacted while the 30 Year added 10bps to its yield.  Hardly a call for panic in the bond market.

Setting the stage for investors’ worries Friday was the growing sense that low rates and quantitative easing are coming to an end due to observations that Japan’s Central Bank pared bond purchases and that the European Central Bank failed to announce further stimulus. This led US investors to react to Fed Governor Rosengren’s comments Friday that a rate increase was on the table this year. While we have been here before, once again, investors sense that we are closer to the end of this cycle of low rates and on the verge of a new surge in government fiscal spending worldwide to jumpstart  anemic economic growth. Sooner or later these concerns will prove to be well-founded.

Benefiting from fiscal spending and coincidently showing up on our weekly Quant Screens are infrastructure ETFs such as PXR, GHII, TOLZ, PHO and MLPX. Big government spending could also benefit top line growth in companies found in ETFs like ZLRG, XSOE and RWL which are found in our weekly Quant Score Percentage Gainers.  SBIO also captured our attention with a big move up in rating points.

A return to Keynesian economics seems to be on the horizon. During this transition we expect to see increased volatility which may be accentuated at times by continued credit concerns of European Financial Institutions. ETF investors can benefit from this volatility by using the ability to buy or sell over 1,900 ETFs intraday and using ETFG’s Risk/Reward Ratings and HeatMap as a guide. Investors and traders should note that new stock opening procedures begin today which could affect ETF pricing in periods of rapidly moving stock prices.

Thank you for reading ETF Global Perspectives!

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

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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.

Emerging Markets Leaders & Followers

“What’s your plan for tomorrow, Are you a leader or will you follow” - The Interrupters

During one of my many trips in the car over this holiday weekend, I came across “Take Back the Power” by The Interrupters while flipping through the stations on Sirius XM.  As the song played, the lyrics got me thinking about a few things, one in particular is how true that is in the financial markets. Most strategies used today can be grouped into mean reversion or trend following. While the definitions and inputs may vary, the theory is the same.

By sorting the ETF Global^® Quant model by any of the individual factor scores, it’s easy to see who the leaders and followers are in the ETP world.  If you click twice on the “LT” header under Technical, the column sorts by the Long-Term technical factor with the highest scoring products at the top. This factor is heavily influenced by long-term momentum, which is used in a lot of trend following strategies.

There are a lot of different products in the top 10 or so products such as PureFunds ISE Big Data ETF (BIGD) and the First Trust Indxx Global Agriculture ETF (FTAG), but it’s easy to see a trend emerge among some of the top scoring products as many focus on Emerging Markets. The JPMorgan Diversified Return EM ETF (JPEM), EGShares EM Core ex-China (XCEM) and ironically the PowerShares S&P EM Momentum (EEMO) all have very high momentum scores.  Given the climb by Emerging Markets during this year, this shouldn’t be a surprise to anyone.

If you click on the “LT” header again, the list is now sorted in ascending order. By looking at both the Long-Term (LT) score and the Short-Term (ST) score, you can see which products have potentially turned the corner after having a bad run. The key is to find products that have low long-term scores with high short-term scores.

The raw list is an eclectic group but by focusing on those that have a short-term score above 50 you will see that there are a number of hedged products in the group including the WisdomTree Korea Hedged Equity (DXKW), Deutsche X-Trackers MSCI United Kingdom Hedged Equity (DBUK) and Deutsche X-Trackers MSCI Brazil Hedged Equity (DBBR) ETFs.  Are these the new Leaders of tomorrow or are they just getting whipped around by currency markets over the comments out of the FED recently?  Only time will tell but they may have taken the first steps needed to walk that path.

We hope that everyone enjoyed their long Holiday weekend and 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 2016 ETF Global® Portfolio Challenge - Calling All Undergraduate and Graduate Students!

Now in its second year, the ETF Global^® Portfolio Challenge provides college students worldwide the opportunity to vie against their fellow classmates and other schools for some very cool prizes intended to benefit both their education and careers. The contest is FREE and requires no purchase at any time.

Each student constructs their own virtual portfolio of ETFs and competes on its performance throughout this school semester. Any and all Undergraduate and Graduate students can sign up at www.etfportfoliochallenge.com through September 16^th.

Registration remains open and all details can be found at www.etfportfoliochallenge.com

We wish our players all the best in this virtual investment competition and thank you for reading ETF Global Perspectives!

#etfwizards

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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.