Monday, September 26, 2016

Wrapping-Up 3Q

As we approach wrapping up the 3rd quarter of 2016, it seems very similar to how we both started the 3rd 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 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.

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