Monday, April 17, 2017

Happy Easter & Passover

Monday, April 17, 2017 - Major U.S. indices lost small ground on this short, quiet week of trading all recording at least 1% declines. This came as geopolitical tensions heat up between the US and the likes of Syria, Russia, North Korea and Afghanistan. These events have sparked a scare in investors as the VIX index, which is used to gauge investors fear, reached its highest levels since the start of the Trump administration on Wednesday.

Though investors may be fearful, it did not stop them from pouring more money into Exchange-Traded-Funds. Developed Market ETFs notched another $6B under their belt this week through Wednesday, according to our ETF Global Fund Flow Summary.  The iShares Core S&P 500 ETF (IVV) was a big recipient of that accumulating over $1.5B in inflows this week. IVV now has over $95B in AUM and carries just an expense ratio of 4 bps.

In the ETF Global Quant scores, we see our model giving high grades to some major contrarian investments. First off is an actual contrarian fund, the PowerShares Contrarian Opportunities Portfolio (PSCC). According to our model, PSCC is looking incredibly undervalued compared to its history as our fundamental scores of P/E, P/CF and P/B all have a score of 97.8 out of 100. PSCC’s total Quant score is currently a score of 73 and it sports a grade of “A.”

The next ETF which is scoring high in our model may come as a surprise to many. The iShares MSCI South Korea Capped ETF (EWY) is currently sporting a grade of “A” and has a total score of 71.3 in our Quant model. Some of its highest grades come in the shorter term sentiment part of the model which includes the P/C ratio and Short Interest. As investors may be betting against the fund due to some of the previously mentioned political turmoil that is happening on the Korean peninsula, it is starting to look more attractive and undervalued. The Quant model takes an opposing point of view to Short Interest and P/C ratio and scores funds based on a 3-6 month outlook. You can check out more about the model here: About ETF Global Quant.

In our Quant movers section, the ALPS Medical Breakthroughs ETF (SBIO) gained the most ground notching a 8.07 total gain in its score. Though the Trump administration has been tough on the pharmaceutical industry, investors may believe that there will be growth to be had. Its fund flows have been basically flat throughout the last month only losing $1.33m out of its $100m AUM.

The biggest Quant loser last week belonged to the iShares MSCI Malaysia ETF (EWM). It lost 12.30 points to its score and currently sports a grade of “B.” Its sentiment scores in our model are bringing its grade down as its short interest and put/call ratio are not looking attractive.

Let’s see what next week brings in the geopolitical landscape and if investor fears continue to rise in this climate. Until then, let’s enjoy the nice spring weather and from all of us at ETF Global, we hope that you and your family had a Happy Easter and that tomorrow brings a joyous end to the Passover Season.

Thank you for reading the ETF Global Perspectives!

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