Tuesday, May 28, 2019

A Long Four Weeks Ahead

Tuesday, May 28, 2019 - Our belated wishes for Memorial Day and deepest gratitude for the ultimate sacrifice of our fallen heroes. We are forever grateful for their service to our country and our people.

Like previous weeks, the latest round of tweets from the White House have heated up the trade war. The consensus view that a deal was around the corner has now given way to a consensus view that one might be harder to complete than previously thought.

Stocks seesawed and ended the week down with the large cap weighted S&P 500 closing at 2,826.06 and the broader NASDAQ Composite closing at 7,637.01 for a weekly loss of 1.17% and 2.29% - the indexes are up YTD at a respectful 12.73% and 15.10% respectively.

The three headlines driving markets this week and probably thru month-end when the FOMC meets on June 18-19 and the G20 Meeting in Japan on June 28-29 are the US – China Trade War, Brexit and slowing US economic growth.

As the trade war ramps up with Huawei as the primary media focus, investors both in China and the US hope that the highly anticipated meeting between Trump and Xi will strike a deal. As we have previously written, the thorny issues of forced technology transfers and alleged theft of IP are unlikely to be resolved anytime soon. In fact, we hear Chinese media has started broadcasting nationalistic songs of the Long March to prime the population into a nationalistic fever to see this as another attempt to keep China from reaching superpower status. This has the effect of further limiting Xi’s ability to make significant concessions to the US during these trade negotiations.

The resignation of May and the subsequent government shakeup increases the risk considerably of a hard landing scenario for UK assets. Look for more investors to accept negative yielding Eurobonds in a flight to quality. According to James Grant in an interesting observation in Barron’s this week, he cites how many of these negative yielding bonds are finding their way into ETFs via the global aggregate bond benchmarks. Ironically, Indexing and ETFs may in this case contribute to economic distortions in interest rates.

Lastly, the release of a lower than expected IHS Markit Purchasing Managers Index (just above 50 which is the dividing line between expansion and contraction) combined with the Federal Reserve Bank GDPNow Model showing economic activity at an annualized rate of 1.3%, down significantly from Q1, have led investors to buy Treasuries which pushed down yields.

If these headlines are not enough for investors to anticipate, we wish to remind you of the upcoming Russell Reconstitution at the end of June. Expect volatility in thematic ETFs holding small caps and thinly traded stocks.

We expect market volatility to continue this week. Of note this past week, was news coming from the space industry. First Trump and Abe announced a new cooperative effort between Japan and the US to jointly expand human exploration of space and to return to the moon by 2024. This demonstrates the relatively silent but high priority race to dominate space by various nations including China. Data communications is a major driver of this race as demonstrated by Space X’s deployment of 60 communication satellites to be part of a Star Link internet constellation to provide internet service to hard to reach communities. Investors seeking their fortunes in the stars should check out the new UFO ETF.

ETFG Weekly Select List - To best support the ETF selection process, the ETFG Weekly Select List highlights the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.  We highlight a couple of ETFs that attracted our attention for investors given our views.  In the Utility Sector: JHMM, FUTY, UTES are our top 3 rankings. Value investors should look overseas to EWY in Asia, EMIF in Emerging Markets, TUR in Europe, ILF in Latin America, and EFA in Developed Markets.

We suggest keeping a mindful eye on tools like our Select List and Risk and Reward Ratings that can be used to evaluate the vast set of opportunities in the ETF marketplace. Today’s market realities require a new approach to macro investing, one in which individual investors now have access to tools via ETPs to customize risk and return profiles in their portfolios. Use our Scanner to find those funds.

Thank you 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.

Saturday, May 25, 2019

Memorial Day & Last Call for the Employing U.S.Vets Conference - May 30th

Saturday, May 25, 2019 - Our warmest wishes on Memorial Day 2019 and deepest gratitude for the ultimate sacrifice of our fallen heroes. We are forever grateful for their service to our country and our people.

=========================

ReminderOur friends at The Expert Series are producing an incredible conference within the ESG space this upcoming week - please see below for all the relevant event details........

We are proud to invite you and your colleagues within the ESG and Diversity and Inclusion communities to the Employing U.S. Vets Conference on May 30th at the New York Athletic Club. The event – co-hosted by VETS Indexes and Military Times – will include discussions of best practices related to veteran employment, recognition of companies going above and beyond for Vets and their families and lots of opportunities to network.


Sign-up now to join panelists, speakers & attendees from these corporations, government agencies, non-profits, foundations, academia and more!


More than ever, current members and Veterans of our military are transitioning from the military and seeking civilian careers. There are about 27 million people in the military-connected community, including active duty personnel, reservists, military families and veterans.  This vast talent pool represents significant opportunities for organizations looking to hire qualified and hard-working employees and has become an integral segment of the Human Capital portion of the Social pillar within Environmental, Social & Governance (ESG). But to take advantage, companies need to know their stuff.

This one-day event features dynamic speakers and panel discussions with nationally recognized employers distinguished for strong track records in veterans’ employment. Military Times reporters and editors will help lead the discussions.

We look forward to seeing you on May 30th for what is sure to be an excellent event!
-----------------------------------------------------------------------------------

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.

Monday, May 20, 2019

What Comes Next?

Monday, May 20, 2019 - Trade issues and likely Fed easing dominated the news last week as US Equity Markets struggled to regain from Monday’s sell off and ended the week mixed. The large cap weighted S&P 500 closed at 2859.53 and the broader NASDAQ Composite closed at 7816.28 for a weekly loss of - .76 % and -1.27%. While investors are focused on day-to-day tit-for-tat tariff retaliations between the US and China and the apparent breakdown in talks at the diplomatic attache level, the POTUS indicated that he believed we would get thru this bump when he meets Premier Xi at the upcoming G20 Meeting at the end of June. Investors should plan to bring the connected devices to the beach as news events are likely to provided trading opportunities.

US Investors seem to discount the significance of last week’s new restrictions on US companies doing business with Huawai. These restrictions are designated as critical to national security. This has been met with strong criticism among the public in China which ends up restricting Xi’s ability to provide concessions in any trade deal on difficult topics like protection of IP and forced technology transfers.  China is very sensitive to either Japan or the US restricting their ascendance.

Now given more trade restrictions are likely to slow down the economy as well as damper investors’ enthusiasm to buy stocks since corporate earnings are likely to suffer, the upcoming Fed June 18th meetings become more critical for investors.

All of this led us to call upon our friends at DataTrek Research, Nick Colas and Jessica Rabe to get their view of what we should expect going into the end of Q2 given this confluence of complex events. Below is what they wrote us:

After a strong start to the year, global equities have lost some of their zip.  Here are Q2 returns-to-date for a variety of US and global stock indices in dollar terms:

S&P 500: +0.9%
Russell 2000: -0.3%
MSCI EAFE Index (non-US developed economies): -0.1%
MSCI Emerging Markets: -6.1%
MSCI All-World ex-US: -1.6%
Worth noting: the DXY dollar index has strengthened by 0.8%, but even correcting for that the MSCI EAFE Index has underperformed the S&P 500

At first blush, the outperformance of US large caps may seem anomalous since trade wars – the proximate cause of Q2-to-date volatility – should weigh on all risk assets to some degree.   That has not been the case and in the remainder of this note we will outline why this divergence exists and what it means for asset prices going forward.

There are 3 important dynamics to consider:

#1: Markets fully expect the Federal Reserve to cut short-term rates in 2019; this belief is both pushing long-term rates lower and supporting lofty US large cap valuations.

As of Friday’s close Fed Funds Futures discount a 73% chance that the Fed will have to cut its benchmark rates by at least 25 basis points before the end of the year. This market sees sub-par US inflation readings and worries about the economic uncertainties of a trade war as pushing the Fed to act, perhaps as soon as September.

Two-year Treasury price action is consistent with this point of view.  At a 2.20% payout, 2-years sport their lowest yields since Q1 2018. Ten-year Treasury yields, the risk-free rate that is the bedrock of US equity valuations, have fallen from their January 2019 highs of 2.79% to just 2.39% now on the same concerns.

Since Q1 US corporate earnings came in better than expected, renewed investor confidence in business profits combined with lower long-term rates has translated into resilient US large cap stock prices.  That’s how we end up with a 16.5x price/earnings multiple on the S&P despite only 3-4% earnings growth.

#2: US small caps (Russell 2000) have not fared as well in Q2 because their valuations are tethered to corporate high yield spreads.  The reason for that linkage: smaller growth companies often need access to outside capital to execute their growth plans.  High yield spreads are a proxy for both the cost of that capital and its relative availability:

The spread over Treasuries for US non-investment grade corporate debt stands at 4.06% today. This is notably higher than the 3.71% spread a year ago on this date as well as the 3.5% average of Q3 2018.

Given that we are in a very late part of the cycle and that the high yield/leveraged finance issuance calendar looks robust for the remainder of Q2 and into Q3, we do not expect high yield spreads to tighten any time soon.

#3: As for what’s going on with MSCI EAFE and Emerging Markets indices, that comes down to the fact that they are dramatically different animals from the S&P 500:

While the S&P 500’s official weighting to Technology sector may be 21%, remember that Amazon, Google, Facebook and other names are not in this category. Once you add in these and other names that are certainly “Tech” regardless of S&P classification, Technology’s real weighting in the 500 is 30%.

The MSCI EAFE Index, by contrast, is just 6% Technology.   Its heavyweight sectors are Financials (19%), Industrials (14%), Consumer Staples (12%) and Health Care (11%).  None, obviously, are as fundamentally attractive as US Tech shares and the two largest exposures – Financials and Industrials – are cyclical groups with negative operating leverage should the current expansion come to an end.

The MSCI Emerging Markets index does have similar Tech exposure (28%) as the S&P 500 once you perform the same adjustments as our first point, but most of that is in Chinese names. Tencent and Alibaba are 9.5% of MSCI EM, and those are primarily Greater China plays rather than having the broader global exposure of an Apple or Microsoft (the 2 largest names in the S&P at a 7.6% combined weight).

Summing up: global equity markets face largely the same fundamental trade-related risks for the remainder of Q2, but will likely continue to respond differently.  Large cap US stocks look the best insulated, buttressed by lower discount rates and resilient earnings. US small caps are no safe haven from the trade kerfuffle – their valuations ride on a late-cycle high yield market.  And for EAFE and Emerging Markets, we expect these two areas to have the greatest challenges.  Both may be cheap relative to US large caps, but valuation alone is never enough to make an asset class work.  For that, you need a catalyst.

And for the remainder of Q2, we suspect good news will be in short supply.

To keep up with Nick and Jessica’s views on the markets including cryptocurrencies and cannibis,  we urge you to check out their website at http:datatrekresearch.com. They have a generous trial offer which we encourage you to try out.

Thank you 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.

Thursday, May 16, 2019

Winners of the Spring 2019 ETF Global® Portfolio Challenge!

Thursday, May 16, 2019 - After 10 weeks of intense competition characterized by constant change atop the leaderboard and double digit returns amongst the Top 25 finishers, the Spring 2019 ETF Global® Portfolio Challenge has come to a close. Our seventh edition of the Portfolio Challenge brought in a new wave of talented college students from a diverse array of universities and academic backgrounds. Drawing over 700 students from 180 schools in 41 countries, this semester’s competition helped enlarge the portfolio challenge’s already broad global footprint and create highly competitive playing conditions.

Our contestants all began the semester with a virtual balance of $100,000 and with the task of constructing the best performing portfolio of ETFs. Students were afforded weekly rebalancing opportunities and could invest in a minimum of 4 and maximum of 10 ETFs at a time. Despite facing heavy competition all semester, these select students were able to separate themselves from the rest of the field.

Please join us in congratulating the winners of the Spring 2019 ETF Global® Portfolio Challenge!

Name
School
Return
Erin Hope
Keuka College
51.8%
Austyn Scott
Keuka College
51.7%
Joshua Kayn
Keuka College
26.6%
Alejandro Gutierrez Restrepo
Universidad EIA
23.4%
Mariana Muñoz
Universidad EIA
22.3%
Paolo Montemurro
Università della Svizzera Italiana
21.9%

Our winners hailed from three different schools in three different countries. Our first and second place winners, Erin Hope and Austyn Scott, had heavy positions in EGA Emerging Global Shares Trust (HILO) and Direxion Daily Gold Miners Bull 3X ETF (NUGT). Joshua invested mainly in JPMorgan Ultra-Short Income ETF (JPST) helping him to earn a return of 26.6%. Alejandro and Mariana were able to achieve 23.4% and 22.3% returns respectively through investing in a mix of physical commodity ETFs and Fixed Income funds.  Finally, our sixth place finisher Paolo posted a total percent gain of 21.9% through a diverse investing strategy that included ETFs from the Metals, Oil & Gas, and TMT sectors coupled with a variety of Fixed Income funds.

As the Winners of this semester’s challenge, these students will be featured and recognized during the ETF Global® Portfolio Challenge Awards Ceremony at the upcoming Fall 2019 ETP Forum (www.etpforum.org) on Thursday, November 21st at the New York Athletic Club.

Please see below for the students that rounded out our Top 25 participants

Name
School
Return
Cristobal Gonzalez
Universidad EIA
20.4%
James Clark
University of Maine
19.9%
Naif Alhamed
California State University, Fullerton
19.8%
Tushar Verma
Rutgers University
19.8%
Malcolm Menezes
Xavier University
19.7%
Brian Toy
Binghamton University
19.5%
Chiaoyu Pai
University of Hong Kong
17.4%
Davide Brignoli
Università della Svizzera Italiana
17.4%
Alec Vanderloo
Loyola University Chicago
17.4%
Mariam Salla
ESSEC
17.1%
Joshua Warner
Plymouth State University
16.7%
Dylan Clark
Keuka College
16.4%
Tim Akin
Birkbeck, University of London 
16.4%
Sean Clarry
Rutgers University
16.3%
Juan Daniel Hincapie Herrera
Universidad EIA
15.9%
Abishek Dubey
ESSEC Business School
14.8%
Jeff Haegler
Keuka College
14.6%
Thien Nguyen
Washington University in St. Louis
14.5%
Paul Casse
ESSEC
14.2%

Since its inception in the Fall 2015, the ETF Global® Portfolio Challenge has attracted students from 6 continents and over 400 schools. As millennials continue to increase their usage of ETFs, we encourage all college students to take advantage of this opportunity and learn about this fast-growing investment vehicle before they enter the marketplace.

Registration for the Fall 2019 competition will open at the end of August.  For more information and to sign-up for the Challenge, please visit: www.etfportfoliochallenge.com.

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.

Wednesday, May 15, 2019

ESG & DICE - Employing U.S.Vets Conference - May 30th - NYC

Wednesday, May 15, 2019 - Our friends at The Expert Series are producing an incredible conference within the ESG space in two weeks - please see below for details........
===========================================

We are proud to invite you and your colleagues within the ESG and Diversity and Inclusion communities to the Employing U.S. Vets Conference on May 30th at the New York Athletic Club. The event – co-hosted by VETS Indexes and Military Times – will include discussions of best practices related to veteran employment, recognition of companies going above and beyond for Vets and their families and lots of opportunities to network.


Sign-up now to join panelists, speakers & attendees from these corporations, government agencies, non-profits, foundations, academia and more!


More than ever, current members and Veterans of our military are transitioning from the military and seeking civilian careers. There are about 27 million people in the military-connected community, including active duty personnel, reservists, military families and veterans.  This vast talent pool represents significant opportunities for organizations looking to hire qualified and hard-working employees and has become an integral segment of the Human Capital portion of the Social pillar within Environmental, Social & Governance (ESG). But to take advantage, companies need to know their stuff.

This one-day event features dynamic speakers and panel discussions with nationally recognized employers distinguished for strong track records in veterans’ employment. Military Times reporters and editors will help lead the discussions.

We look forward to seeing you on May 30th for what is sure to be an excellent event!
-----------------------------------------------------------------------------------

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.

Monday, May 13, 2019

Trading Bumps

Monday, May 13, 2019 - Trade fears hampered sentiment throughout the week as the U.S. raised tariffs to 25% on $200 billion in imports from China. In turn, China vowed to retaliate indicating an escalation in rhetoric and raising the odds of a breakdown in trade negotiations. Volatility, as measured by the Cboe Volatility Index (VIX), spiked to its highest level since January signaling an increase of uncertainty among investors.

Nevertheless, a Friday afternoon rally shielded the major indexes from their worst declines since late December. The technology-heavy Nasdaq Composite Index performed worst dipping more than 3% for the week. The Russell 2000 TR Index stood out for being the only major benchmark to temporarily move into correction territory, down over 10% from its all-time highs approximately a year ago.

Looking at the various sectors in the S&P 500, information technology shares performed worst, dragged lower in part by a decline in Apple (AAPL). Industrials and Materials were also weak as investors worried about rising trade barriers. The typically defensive Consumer Staples sector held best. The trading week was also notable for Friday’s initial public offering (IPO) of Uber (UBER), which valued the ride-sharing company at around $75 billion. The amount raised by the offering, totaling approximately $8.1 billion, made it one of the 10 largest IPOs in history and the biggest since Chinese Internet giant Alibaba’s IPO debut in 2014.

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

ETFG Quant Winners: The top five gainers in Quant Total Score in order were Principal International Multi-Factor Index ETF (PXUS), iShares U.S. Basic Materials ETF (IYM), Vanguard Dividend Appreciation ETF (VIG), ETRACS Alerian MLP Index ETN Series B (AMUB) and Cushing 30 MLP Index ETNs (PPLN). Evident behavioral factors were the primary drivers for the increased growth (over 10%) in each fund’s Total Quant Score.

ETFG Quant Losers: Honorable mentions in the loser category were Barclays Return on Disability ETN (RODI), Vanguard US Multifactor ETF (VFMF), Reality Shares DIVCON Dividend Guard ETF (GARD), IQ 50 Percent Hedged FTSE Japan ETF (HFXJ) and Global X MSCI China Consumer Discretionary ETF (CHIQ). The reasons for the ETFG Quant score drop were driven by behavioral and global factors.

ETFG Weekly Select List - the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

We saw an interesting phenomena in the Strategy portion when comparing this week’s Select List to last week’s Select List – there was complete turnover in the Theme category. Pacer Military Times Best Employers ETF (VETS) snagged first place, proving that ESG factors, particularly in the S and G category, can perform well for investors in all market cycles. Global X Conscious Companies ETF (KRMA) claimed second followed by Legg Mason Global Infrastructure ETF (INFR), iShares MSCI USA ESG Select ETF (SUSA) and ARK Genomic Revolution Multi-Sector ETF (ARKG) in order from 3rd to 5th.

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