Tech Crunch?

Monday, July 30, 2018 – Last week saw a bumpy ride for the equity markets that featured a divergence within the Tech Sector countered by continued strong earnings across most other earnings reports. While Amazon and Alphabet beat earnings estimates and moved higher, on Thursday, Facebook experienced the largest one-day loss ever in market capitalization after warning the Street that growth was slowing. Also pressuring the Tech sector were Intel and Twitter with disappointing earnings reports.  For the week, the DJIA added 1.6%, the S&P 500 climbed .6% and the Nasdaq rose 1.1%.

ETFG Quant Movers – those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings: 

·    ETFG Quant Winners: PEZ (Invesco DWA Consumer Cyclicals Momentum ETF) jumped 13.58 points to 45.85, EELV (Invesco S&P Emerging Markets Low Volatility ETF) rose 11.67 to 55.97 and PIN (Invesco India ETF) improved to 44.17 with an increase of 10.54 points in its ETFG Quant Rating.

·    ETFG Quant Losers: BTAL (AGFiQ US Market Neutral Anti-Beta Fund) dropped 9.75 points to 26.93, IAI  (iShares U.S. Broker-Dealers & Securities Exchanges ETF) lost 9.10 to 37.89 and FIEG (FI Enhanced Global High Yield Exchange Traded Notes) oved lower by 8.28 points to  46.79.

ETFG Weekly Select List - the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model. We’d like to highlight some substantial movement in the Sector and Strategy portion when comparing this week’s Select List to last. We saw 4 new funds that were unranked last week claim a spot in the top 2 through 5 positions the Broad Equity category. First Trust Chindia ETF (FNI), AdvisorShares Dorsey Wright ADR ETF (AADR), iShares MSCI Brazil ETF (EWZ) and iShares MSCI Mexico ETF (EWW) made an appearance respectively.

We saw similar movements in the Technology Sector. BlueStar Israel Technology ETF (ITEQ), iShares Edge MSCI Multifactor Technology ETF (TCHF), First Trust Nasdaq Semiconductor ETF (FTXL) and First Trust Nasdaq Cybersecurity ETF (CIBR) secured 2^nd through 5^th respectively. These four funds have seen a steady returns but this sector will become extremely interesting in the months to come with the impending Global Industry Classification Standards (GICS) reorganization.

Thanks 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.

SS&C SVC adds ETF Global® to its Managed Data Services

Friday, July, 27, 2018 - Press Release -The ability to aggregate data from multiple vendors is crucial for managing assets on a global platform and a necessity in an age where manual price validation creates additional cost and risk. SS&C SVC offers a single, cost-effective, data feed for a comprehensive range asset classes. The data is aggregated from multiple sources, validated, enriched and directly fed into SS&C’s portfolio of investment management platforms and third-party solutions.

SS&C SVC is pleased to announce that it will offer Exchange Traded Fund (ETF) data and research throughout the entire SS&C SVC enterprise. The data and research will be provided through our new partner, ETF Global^®. ETF Global is a leader in data, research and proprietary risk analytics for Exchange Traded Products.

ETFs have shown steady growth over the past 12 years, with more than 4,700 ETFs worldwide reported in 2016.  In 2017, inflows for exchange-traded funds shattered 2016 records, topping $464 billion according to data from State Street Global Advisors. As this asset class continues to grow, timely ETF research and data becomes ever more critical for responsible asset management.

With the addition of ETF Global, our clients now have an even more comprehensive, single source for timely data and research, so they can find all the information they need in one place.

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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.

Earnings Power

Monday, July 23, 2018 - Earnings season is in full throttle and we see no sign of US companies slowing down. The overwhelming majority of S&P 500 companies that have already reported 2^nd Quarter earnings have toppled analyst expectations and are keeping markets steady throughout more geopolitical turmoil.

There was a small meeting that took place two weeks ago in Helsinki where President Trump met with Vladimir Putin to discuss Russian/American relations. Did I say small? I meant to say big, it was a big meeting that has been the talk of the world since it happened. Last week however, Trump set his sights on criticizing a few other powerful bodies. He let it be known that he was not happy with the way the Federal Reserve was raising interest rates, all while countries like China and the European Union are “manipulating their currencies lower” to gain a competitive advantage over the US.

All in all, markets took the good and the bad and remained stagnant with the Dow Jones Industrial Average rising just .2%, the S&P 500 .01% and the Nasdaq Composite .1% for the week.

In ETFs, we continue to see Fund Flows into some of the largest Fixed Income ETPs, with the iShares iBoxx Investment Grade Corporate Bond ETF LQD and the iShares Core U.S. Aggregate Bond ETF AGG on top of the chart in that asset class. MTD they have seen $1.66B and $997M worth of inflows. Another big winner, but outside of fixed income, was SCHX which is the Schwab US Large Cap ETF.  It took in about $1.07B worth of inflows MTD which accounts for about 10% of its AUM.

In our Weekly Quant Movers, we saw winners all over the spectrum with the iShares US Regional Banks ETF (IAT), ProShares S&P 500 ex-Energy ETF (SPXE) and the WisdomTree Emerging Markets High Dividend Fund (DEM) all adding points to their reward scores. They gained 10.14, 9.80 and 8.20 to their overall scores respectively.

In the losers column, we saw the same type of disparity with the X-trackers Harvest CSI 300 China A-Shares Fund (ASHR), the Vanguard Energy ETF (VDE) and the Fidelity MSCI Information Technology Index ETF (FTEC) all dropping points in the reward scores. They lost 6.99, 6.97 and 6.91 to their overall scores respectively.

As earnings season continues, we will see if strong reporting can offset any geopolitical concerns that will undoubtedly pop up. This week some key companies are going to be reporting such as Facebook, PayPal, Amazon and Verizon. For these, we will be keeping an eye on ETFs such as XLK, XLY and QQQ.

Thanks 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.

And the resilience continues…

Monday, July 16, 2018 - The Markets are still proving skeptics wrong time and time again as they continue their march upwards outlasting political noise that would seem to only have a negative effect on them. The latest news that they have shrugged off is the additional tariffs that President Trump would like to levy on China for $200B worth of goods. Yes, there was a bit of a shock wave mid-week when the President announced the news, but it didn’t stop the Dow Jones Industrial Average from gaining 2.3%, the S&P 500 from gaining 1.5% and the Nasdaq Composite from reaching levels over 7800.

In ETFs, during the first 15 days of the quarter, we have seen outflows in some of the largest products on the market such as SPY that has lost about 1.54% or over $4B. The iShares Emerging Markets ETF, EEM has seen redemptions top $3.25B in the month of July which makes up over 7% of its AUM and the Vanguard High Dividend Yield ETF, VYM lost over $3.2B or about 13% of its AUM, all according to the ETFG Fund Flow Summary.

In July, we have seen the greatest inflows into fixed income products. The chart toppers were the iShares iBoxx Investment Grade Corporate Bond ETF, LQD which gained about $1.82B of inflows and the Vanguard Short-Term Bond ETF, BSV which added $1.14B to its AUM.

In our weekly Quant Movers, we saw technology-based ETFs take the biggest losses. These included the iShares North American Tech ETF, IGM and the Invesco NASDAQ Internet ETF, PNQI which lost 8.39 and 7.89 to their overall scores respectively.

In the winners column, we saw a broad variety of products add points to their overall scores. These included the Alerian MLP Infrastructure Index ETN, MLPB, the Vanguard FTSE Developed Markets ETF, VEA and the Franklin LibertyQ Emerging Markets ETF, FLQE which gained 14.99, 9.66 and 8.67 points to their overall Quant Scores.

As the 3^rd quarter continues to play out, it will be interesting to see if the trade war talks, North Korea/ Russian news or the new types of relationships we are developing with our closest allies actually play a long term effect on the markets. Until then, it seems like the broad-based indices will continue to play to the same tune: onward and upward!

Thanks for reading the ETF Global Perspectives!

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

_____________________________________________________________

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.

3Q Rebalance – ETF Global® Dynamic Model Portfolios

Tuesday, July 10, 2018 - Investor anxiety may have been running high at the end of the first quarter, the S&P 500 had dropped into the red and closed below its 200-day moving average, but ultimately those who stayed invested were well rewarded in the second quarter as the economic good news kept coming. Equities in general managed solid single digit returns that lifted markets above their starting line for 2018 although weakness in late June robbed them of some of their hard-won gains and new anxieties have emerged as we start the third quarter. Can the strong economic growth continue?  Will the incipient trade war grow out of control?

For us at ETF Global, the start of a new quarter means something much more concrete; that it’s time to revisit the ETFG Dynamic Model Portfolios. The 4 base portfolios and the 8 “tilts” were updated on July 2^nd and the wide performance differences between different sectors and style boxes are having a major impact on the models. Both the domestic and international sleeves saw significant changes with three funds leaving each with only the emerging market portfolio staying the same with both the iShares MSCI Emerging Markets ETF (EEM) and First Trust Chindia ETF (FNI) being retained for another quarter.

Among the domestic funds, only the Direxion NASDAQ 100 Equal Weighted Fund (QQQE) holds onto its spot in the line-up once again where it’s joined by the SPDR S&P 400 Mid Cap Value ETF (MDYV), the SPDR S&P 600 Small Cap Value ETF (SLYV), and the SPDR S&P 600 Small Cap ETF (SLY) while the SPDR Portfolio S&P 500 Growth ETF (SPYG), SPDR Portfolio S&P 500 Value ETF (SPYV) and WisdomTree U.S. MidCap Dividend Fund (DON) depart the strategy. The result is the domestic portfolio has seen a substantial reduction in its average weighted market cap while the pendulum between value and growth has shifted towards the middle ground as financials gain more exposure at the expense of tech stocks.

The shift in the portfolio is easier to understand when you consider that large cap equities may have struggled to hold onto their gains last quarter, but their small-cap brethren had no such issues with SLY up over 9% while the iShares Russell 2000 ETF (IWM) was up nearly 8%. That strong momentum was one of the driving forces that propelled a number of funds focused on smaller names up our list of top Quant funds although we should note that all four of the domestic funds have excellent fundamental scores as well. In fact, while the three additions to the portfolio have seen an increase in short-term momentum which lifted their aggregate score, their sentiment scores were substantially higher with each having high implied volatility and short interest. Compare that with SPYG and SPYV which have seen a steady drop in their behavioral scores as large caps continue to lose ground to smaller names.

U.S. equities generally had a solid quarter, the winners on the international side in the second quarter were those were those who lost the least as emerging market stocks continued to be hit by Fed fears while trade war talk hurt even the developed markets. That helped drive a major shift in the international side of the portfolio as it reduced Asian exposure to a more European orientation thanks to the departure of the two broad funds, the iShares Core MSCI Pacific ETF (IPAC) and iShares Edge MSCI Multifactor Intl ETF (INTF) along with one of the country specific funds, the iShares MSCI Singapore ETF (EWS). Taking their place are the iShares Core MSCI International Developed Markets ETF (IDEV) and Goldman Sachs Active Beta International Equity ETF (GSIE) along with the iShares MSCI United Kingdom Fund (EWU) where the Brexit debate continues to weigh on valuations while helping boost its sentiment scores.

You can find an overview and performance information for the ETF Global Dynamic Model Portfolios at http://www.etfg.com/about-model-portfolios

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.

Trade Battles

Monday, July 9, 2018 - While the week was shortened and trading volumes were subdued by this week's Independence Day celebration, the broader economic arena remained rife with activity. Stocks continued to be whipsawed by the competing forces of encouraging economic data and escalating global trade tensions, as this week brought several important developments on both fronts. Worries about the sharpening conflicts between the U.S. and its global trading partners weighed on the markets throughout the week. These concerns were accentuated on Friday when the U.S. imposed its previously announced 25% tariffs on $34 billion of Chinese imports and, in response, China levied tariffs on a list of 545 American goods ranging from automobiles to agricultural products. In what amounted to the first official shots of a trade war, investors are increasingly concerned that this tit-for-tat escalation in trade tensions will drag the world’s two biggest economies into a protracted dispute that will derail global growth.

Yet, despite these concerns, stocks remained resilient led by the countervailing influence of a stronger-than-expected June payrolls report. In what is currently the largest jobs expansion streak on record, the U.S. economy added 213,000 jobs in June to mark a 93^rd consecutive month of growth. Unemployment ticked slightly higher to 4.0%, but remains near an 18 year low, and wage growth remained tame enough at 2.7% to assuage fears of accelerating inflation and aggressive fed rate hikes. This upbeat report was able to override global trade unease and lift stocks to weekly gains.

For the week, the DJIA advanced 0.8%, the S&P 500 recorded a 1.5% gain, and the Nasdaq rose 2.4% in its largest one-week gain since May.

ETFG Fund Flow Summary - Against this week's fraught backdrop, U.S. listed ETFs managed to post positive weekly inflows. Following last week's $21.6 billion in outflows, U.S. listed ETFs attracted $670 million in inflows, which helped advanced total year-to-date inflows to $2.8 billion.

This week's advances in the broad equity indices ostensibly pointed to a risk-on attitude taking hold in the marketplace, yet the fund flow patterns reveal a different picture. Equity outperformance was belied by $1.2 billion in outflows as a group. Conversely, fixed-income ETFs drew nearly $2.8 billion is inflows.

This penchant for defensive oriented products is reflected in this week's list of top individual fund flow leaders, where bond and bond-proxy ETFs lead the way in creations. The iShares 20+ Year Treasury Bond ETF (TLT) was the inflow leader this week with $596 million in creations. Several other defensive oriented products populated the top 10, including the iShares Core U.S. Aggregate Bond ETF (AGG), Vanguard Real Estate ETF (VNQ), iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD), Utilities Select Sector SPDR Fund (XLU), and iShares 7-10 Year Treasury Bond ETF (IEF).

In contrast, equity-oriented products dominated this week's list of top outflows. iShares MSCI EAFE ETF (EFA) suffered the heaviest redemption with $797 million. Additionally, notwithstanding their outperformance, ETFs tracking each of the 3 major equity indexes finished the week among the top money losing funds. SPDR S&P 500 ETF Trust (SPY) ended the week third in outflows with $597 million, followed by $595 in withdrawals in Invesco QQQ Trust (QQQ), and $327 million in SPDR Dow Jones Industrial Average ETF Trust (DJIA).

Above all, this week's fund flow trends capture the current uncertainty in the marketplace and how investors are struggling to reconcile the conflicting signals of positive economic fundamentals and ominous trade developments.

Thanks 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.

New ETF Global Post on Seeking Alpha

Saturday, July 7, 2018 - We are excited to be working with Seeking Alpha to deliver top-tier ETF Research. ETF Global provides independent and objective research enabling investors to generate superior risk-adjusted returns. Our proprietary models find the important connections between several disciplines to generate superior returns and bridge the gap between stock selection and ETF investing.  Please find our latest post here - A Deeper Dive Into Value Vs. Growth

Addition posts from ETFG on Seeking Alpha can be found under ETFG’s profile here: ETF Global Perspectives

Thanks for reading ETF Global Perspectives!

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

_____________________________________________________________

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.

ETF Global on Seeking Alpha

Tuesday, July 3, 2018 - For all of our subscribers and readers, please visit us on Seeking Alpha for additional ideas and commentary. You can search for the ETF Global posts which are in addition to what you find here on ETF Global Perspectives - please also find our recent New-to-Market post on VETS here - https://seekingalpha.com/article/4185111-new-market-etf-vets

Thank you for reading ETF Global Perspectives and happy July 4th!

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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.

Big Changes for ETF Basket Files

Monday, July, 2, 2018 - The tenor of the global trade debate continued to weigh heavily on the markets, as stocks swung between loses and gains in tandem with this week's bouts of escalation and moderation of trade tensions. Against this precarious backdrop, the DJIA and S&P 500 shed 1.3% apiece and the tech-heavy NASDAQ dropped 2.3% for the week. Within the S&P 500, energy stocks outperformed after oil prices rose to a four year high on a larger than expected drawdown in U.S. crude inventories and news that the U.S. intends to levy sanctions on countries that don't eliminate all oil imports from Iran by November 4^th. Health care and Consumer Staples lagged, fueled by fears over the disruptive potential of Amazon's acquisition of online pharmacy PillPack. Mixed economic signals also figured prominently in this week's market action. Inflation rose to a six-year high, reaching the Fed's target 2% rate in May. A downward revision of first quarter GDP from 2.2% to 2.0% and a 0.6% drop in durable goods orders in May were among the other notable economic headlines.

The ETF industry experienced a watershed moment this week as the SEC voted 5-0 to modernize the regulatory framework for this fast-growing space. To date, ETFs have relied on individual exemptions from the nearly eighty-year-old Investment Company Act of 1940 for approval of new products. This ad hoc process has created significant time and costs for product launches and lent an advantage for established ETF providers.

Proposed Rule 6c-11, which will undergo a 60-day comment period, will standardize the approval process, allow issuers to launch ETFs without receiving exemptive relief from the SEC, and rescind all previously granted exemptive relief orders. The proposed rule will apply to all ETFs structured as open-ended funds, while multi-share class funds (like Vanguard funds) UITS, non-transparent ETPs, and leveraged and inverse and other esoteric ETPs will still receive additional SEC scrutiny. All issuers will also be required to publish certain information about their funds every day, such as premiums/discounts and bid/ask spreads.

Another significant element of the proposed rule is the standardization of custom creation/redemption baskets for all ETF issuers. Years of bespoke exceptions gave rise to portfolio management flexibility for some ETF providers at the expense of others. Prior to 2012, the SEC gave ETF issuers the latitude to use a custom sample of their fund's holdings to facilitate the creation/redemption process. This exemption was ended in 2012 and now all ETF issuers operating without this exemption must conduct of full replication of their individual holdings during a creation/redemption. Not only has this given incumbent providers a decided advantage when managing their portfolios, it has also spawned a pervasive, but seldom understood disparity between the constituents of the basket and holdings files of ETFs.

As many ETFs often have thousands of constituents or track less liquid asset classes, geographic regions, or strategies, a full holdings replication during the C/R process is often too unwieldy and cost inefficient. Thus, to reduce transaction costs and minimize tracking error, pre-2012 ETF issuers will publish a portfolio composition file (PCF), also known as a basket file, which represents a sample of an ETFs holdings that they will accept for a creation. The basket file will aim to match an ETFs risk/reward profile and frequently represents only a sample of an ETF's full holdings. This practice is ubiquitous as you move beyond the extremely liquid broad-based Large Cap equity ETFs.

Basket files are used to facilitate the C/R process and holdings files represent a full look through of an ETF's constituents and are used for any aggregate fund calculation, such as end of day NAV. With the new ruling, the disparity between basket and holdings files will widen even further and, consequently, there will be a corresponding increase in the importance of recognizing the distinction between these two files.

The SEC first proposed an ETF-specific rule a decade ago, but their rule making deliberations were derailed by the onset of the financial crisis. This week's proposed rule is a momentous development, adding fresh momentum to the $3.6 trillion dollar industry and further cementing its place in the investing mainstream.

Our weekly Quant Movers lists is heavily populated by funds caught up in ongoing global trade tensions. The funds suffering the largest declines in their quant scores this week were largely all trade sensitive funds - SCHA, ACWF, VOE, ECNS, IPAC, FLIO, MOM, OASI, RFDA, and FTXR. However, our model also does identify some value picks for funds that have been battered by the rise of trade conflicts and emerging market currency fluctuations - QAT, FEUZ, FLM, VYMI, EWT, AMZA, PID, EIDO, VOT, and EMCG.

In the holiday-shortened week ahead, trading volume will likely be light, but investors will still continue to negotiate the latest developments in global trade tensions.

Thanks for reading ETF Global Perspectives!

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

_____________________________________________________________

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.