Saturday, March 11, 2017

ETF Global® Portfolio Challenge - Spring 2017 Leaderboard

March 10, 2017 - Three weeks have elapsed in the Spring 2017 ETF Global Portfolio Challenge and our student participants are already locked in a fierce competition. Let’s take a look at some of our top performers thus far…

Spring 2017 ETF Global Portfolio Challenge – Top 10 through 3/9/17

Portfolio Return
Dan Dang
St. John Fisher College
Catherine St. Clair
St. John Fisher College
Edwins Lee
Rutgers University
William Ryan
St. John Fisher College
Ethan O’Donnell
St. John Fisher College
Kolten Rossignoli
Wilfrid Laurier University
Phat Huynh
St. John Fisher College
Steven Barber
Rochester Institute of Technology
Sam Vemisaje
Wilfrid Laurier University
Kelsey Michener
St. John Fisher College

As illustrated in the table above, our leaders have generated impressive returns within a three-week span. Notably, St. John Fisher College and Wilfrid Laurier University boast multiple students in the top ten - students from Rutgers University and RIT round out our top ten.

Looking under the hood of our leaders’ portfolios reveal a common theme that has underpinned then; bearish bets on precious metals and oil and long positions in natural gas products. Positions in ETPs such as Direxion Daily Junior Gold Miners Index Bear 3X Shares (JDST), ProShares UltraShort Bloomberg Crude Oil (SCO), VelocityShares 3x Inverse Silver ETN (DSLV), and VelocityShares 3x Long Natural Gas ETN (UGAZ) were popular holdings amongst our leaders.

With an impending Federal Reserve rate hike, precious metals, like gold and silver, have lost their appeal as safe haven assets and suffered sharp price declines this week. Additionally, despite OPEC production cuts, American shale producers continue to flood the market. Oil glut concerns resurfaced this week, causing prices to tumble below $50 a barrel as U.S. stock piles swelled to record levels. These developments allowed our leaders to capitalize on their downward movements by contrarian bets in inverse ETPs. Conversely, upward natural gas movements provided a boost to our leaders with long, leveraged exposure to the sector.

While leverage allowed our leaders to generate outsized returns this week, we must stress the inherent dangers of these products. Leveraged ETFs are speculative investment funds that, through the use of derivatives, attempt to deliver multiples of the performance of the index or benchmark they track. Leverage amplifies losses just as it does gains. Leveraged ETFs reset daily, meaning that they are designed to achieve their stated investment objectives on a daily basis. This daily reset feature can cause an ETF's returns over weeks or months to diverge wildly from that of the benchmark, rendering these ETFs highly risky and inadvisable as long-term investment vehicles.

The performance of Kolten Rossignoli, who is currently 6th overall, illustrates that outperformance can be achieved through a well-constructed portfolio that eschews the use of leverage. Kolten’s portfolio is equally weighted, consisting of FDIS, SPY, VBK, and XLF - ETFs that have all benefited from the prospects of fiscal stimulus and regulatory rollback under our new administration.

As you consider re-positioning your portfolio before this week’s rebalance date, we encourage you to review the risk and reward profile of your portfolio, provided to you in your ETFG portfolio tearsheet. We also encourage you to peruse our Select List. Developed by the Research Policy Committee at ETF Global, the ETFG ETF Select List features the 5 most highly-rated ETFs by Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

If the first three weeks of the performance period is any indication, the Spring 2017 ETF Global® Portfolio Challenge will be deeply competitive and we look forward to continue watching the competition unfold!

Thank you for reading ETF Global Perspectives!

ETFG 21 Day Free Trial:

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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.