Monday, October 2, 2017

And Into 4Q We Go.........

Monday, October 2, 2017 - The start of the new quarter brings some new hopes to Investors and continued strength throughout the US markets. It also brought along some big news in the ETF industry as Invesco PowerShares announced that they agreed to buy Guggenheim’s ETF business for $1.2B. Guggenheim’s ETFs have about $33B in AUM which will certainly add a lot of value to the fourth largest US ETF issuer.

All three major indices are up for the quarter and got a nice boost with the announcement of the new tax plan that the Republican party is trying to put in place.

One of the most favorable parts of the new proposed tax plan is the corporate tax cut from 35% to 20%. That can add multiples to the P/E ratios of many of the large-cap stocks and have an even greater impact on the small and mid-cap ones which tend to pay a higher rate.

Though still early in the process, it did not stop investors from pouring money into small-cap names and some ETFs were there to ride the wave – one of the most notable was the Russell 2000 ETF, IWM, which added 3.57 points or 2.46% this week. The iShares Russell 1000 Growth ETF, IWF also had a positive week adding 1.74 points.

Taking a look back at the quarter, there were 7 ETFs that added over $1B to their AUM. To no surprise, four of the seven, IVV, IEFA, LQD and HYG are iShares funds, two of the seven, XLF and SPY, are from StateStreet and the last, VEA is from Vanguard. Check out the chart below to see the flows.

3Q Net Fund Flow
% of AUM

In our weekly Quant Movers, names like the iPath S&P MLP ETN (IMLP), WisdomTree Dynamic Currency Hedged Japan Equity Fund (DDJP) and WBI SMID Tactical Value Shares (WBIB) made the largest gains to their scoring adding 12.03, 11.27 and 10.07 points respectively. On the opposite end of the scoring spectrum, the “dogs” of the week included the ALPS International Sector Dividend Dogs ETF (IDOG), PowerShares Cleantech Portfolio (PZD) and PowerShares India Portfolio (PIN), which lost 12.03, 10.09 and 10.04 points to their overall score respectively.

Also, since it is the beginning of the quarter, be sure to look out for the rebalance and reconstitution of the ETFG Model Portfolios. To learn more about them, check out:

Thanks for reading the 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.