Pushing Through Record Highs

Monday, June 24, 2019 - U.S. stocks continued their record-setting pace for the month of June, following a dovish shift in the Federal Reserve's posture and signaling of its willingness to cut rates if warranted by economic conditions. Wednesday's accommodative stance by the Fed echoed a fresh commitment earlier in the week by the ECB to introduce further stimulus to head off rising economic risks and combat moribund growth and inflation. The dovish synchronization of global central bank policies was well received by investors this week and served as a bulwark against of host of concerns that threaten to derail global economic growth.

Despite a benign shift in global central bank policy and the brightening prospect of a U.S.-China trade deal, investors still have to contend with issues such as still unresolved trade disputes, sluggish economic data, Brexit uncertainty and escalating U.S.-Iranian military tensions. Any negative developments in these array of issues threaten to disrupt the delicate balance of factors that have currently favored rising equity prices.

Unaffected by these looming threats, stocks surged into record territory this week, with the DJIA, S&P 500, and NASDAQ rising 2.4%, 2.2.%, and 3.0% respectively. As of Friday, the DJIA is up 7.7.% for the month, which would mark its best monthly performance since October 2015 and best June since 1938. Meanwhile, the S&P 500 notched a record close on Thursday and its 7.2% monthly advance would be its best June performance since 1955. Adding to this banner month, NASDAQ's 7.8% gain would be its best June since the 2000 amid the dot-com euphoria.

These gains also coincided with a further decline in 10 year Treasury yields, which sank below 2.0% for the first time since 2016 before recovering to end the week at 2.04%. The continued decline of global government bond yields adds another mixed signal to the global economic picture and will be a dynamic worth monitoring in the coming weeks.

ETFG Quant Winners: The easing of global trade tensions helped fuel this week’s biggest Quant score gainers. From 1-5, this week's top gainers were the Global X MSCI China Communication Services ETF (CHIC), Bernstein Global Research Fund (BRGL), Franklin FTSE Hong Kong ETF (FLHK), Developed International Equity Select ETF (RNDM), and SPDR Solactive Canada ETF (ZCAN).

ETFG Quant Losers: The ETFs suffering the biggest Quant declines were more of a mixed bag this week. From 1-5, the top losers were First Trust India NIFTY 50 Equal Weight ETF (NFTY), iShares Morningstar Small-Cap ETF (JKJ), Principal Sustainable Momentum Index ETF (PMOM), iShares Russell 2000 Value ETF (IWN), and FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE).

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

Following an apparent breakthrough in U.S.-China trade talks we'd like to focus on the weekly changes amongst ETFs in the Asia-Pacific geographic group. With the exception of two ETFs swapping the 3rd and 4th spots, no changes occurred in the composition of our top 5 rated Asia-Pacific funds from last week to now. While progress in U.S.-China trade discussions served as a catalyst for this week's market action, our model is more forward-looking and long-term oriented in its outlook and is appreciably less sensitive to such short-term fluctuations. For long-term upside plays in the Asia-Pacific region, consider our top 5 rated ETFs, which may be better able to withstand ongoing global trade tensions - 1) First Trust Chindia ETF (FNI), 2) iShares MSCI South Korea ETF (EWY), 3) iShares MSCI Malaysia ETF (EWM), 4) iShares China Large-Cap ETF (FXI), and 5) WisdomTree Asia-Pacific ex-Japan Fund (AXJL).

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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.

Tensions Home and Abroad

Monday, June 17, 2019 - Amid conflicting economic signals and geopolitical flareups, U.S. stocks managed to inch higher for the week and continue their strong start to June. Stocks began the week on a positive note, as the U.S. and Mexico were able to stave off an escalating conflict over immigration and some high-profile M&A tie-ups between Salesforce and Tableau and UTC and Raytheon lifted investor sentiment. However, this burst of optimism ebbed as the week came to a close following a mixed bag of economic data and sharpening geopolitical tensions in the Middle East.

Positive consumer spending in May was counterbalanced by a muted CPI reading and record-low inflation expectations. Broadcom's downward revenue forecast revision and dim full-year outlook due to intensifying global trade tensions further depressed the mood in the markets. Lastly, the attack of two oil tankers in the Gulf of Oman, purportedly by Iran, sharply unsettled global energy markets and raised the specter of U.S.-Iranian military conflict. Despite the worrisome turn at the end of the week, the DJIA, S&P 500, and Nasdaq were able to register gains of 0.4%, 0.5%, and 0.7% respectively for the week.

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

ETFG Quant Winners: This week’s biggest winner was the Validea Market Legends ETF (VALX) rising 7.82 to boost its overall Quant Score to 51.91. Following VALX in the top 5 were Eaton Vance Stock NextShares (EVSTC), USAA MSCI USA Small Cap Value Momentum Blend Index ETF (USVM), Brandes Value Nextshares (BVNSC), and Aptus Fortified Value ETF (FTVA).

ETFG Quant Losers: Franklin FTSE Australia ETF (FLAU) suffered the biggest overall decline this week, falling 9.58 points to bring its overall Quant Score to 45.52. ProShares Decline of the Retail Store ETF (EMTY), Franklin FTSE Japan Hedged ETF (FLJH), Franklin FTSE Hong Kong ETF (FLHK), and Kraneshares MSCI All China Healthcare Index ETF (KURE) rounded out the rest of the top 5 biggest Quant losers for the week.

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

Given its heightened volatility this week, we'd like to focus on the weekly changes amongst ETFs in the energy sector. While the energy sector suffered a major shock this week, our top 5 rated energy ETFs were unchanged from last week. On the surface, this may come as a surprise. However, a look under the hood of these funds and review of their investment objectives reveals why our top was unaffected. Our top 5 energy sector ETFs consists entirely of funds that focus on energy services and infrastructure, making them less sensitive to funds tied directly to oil prices. Leading our top 5 is the VanEck Vectors Oil Service ETF (OIH). J.P. Morgan Alerian MLP Index ETN (AMJ), Invesco DWA Energy Momentum ETF (PXI), First Trust North American Energy Infrastructure Fund (EMLP), and Invesco Dynamic Oil & Gas Services ETF (PXJ) close out the rest of our top 5 energy ETFs. For energy-focused investors, this may be a dynamic to monitor going forward as the sector appears poised for continued disruptions.

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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.

Bounce Back

Monday, June 10, 2019 – Stocks registered a four day string of solid gains to put the finishing touches on the best week of 2019. The S&P 500 Index had its best week of the year, ending within 3% of its all-time high, while the Dow Jones Industrial Average escaped its longest weekly losing streak since 2011. Much of the week’s gains came Tuesday, which marked the best daily performance for the major benchmarks so far this year. The catalyst appeared to be remarks from Federal Reserve Chairman Jerome Powell at a central bank conference, in which he pledged that policymakers were paying close attention to the impact of trade tensions on the economy and would act as appropriate to sustain the expansion. This anticipation of the Fed cutting interest rates later this year helped stocks move higher at the end of the week. All major sectors rose on the week, led by a surge in Basic Materials and in Technology. The Dow Jones Industrial Average rose 263 points to 25,984, the S&P 500 Index increased 30 points to 2,873 and the Nasdaq Composite gained 127 points to 7,742.

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

ETFG Quant Winners: This week’s biggest winner was iShares U.S. Infrastructure ETF (IFRA) gaining 10.54 to finish with a Quant Score of 56.74. Hartford Global Impact NextShares Fund (HFGIC) finished a close second gaining 10.38 points to move up to a Quant Score of 55.66. Vanguard U.S. Quality Factor ETF (VFQY) moved to a Quant Score of 54.53 after posting a 9.89 increase. Rounding out the top five were Reality Shares DIVCON Dividend Guard ETF (GARD) and AAM S&P 500 High Dividend Value ETF (SPDV) gaining 9.77 and 9.50 respectively.

ETFG Quant Losers: This week’s biggest loser was Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF (ASHS) dropping 11.64 points to a Quant Score of 45.13. At a distant second and third were Pacer Trendpilot US Mid Cap ETF (PTMC) and VictoryShares US Discovery Enhanced Volatility Wtd ETF (CSF) down 7.82 and 7.75 respectively. iShares MSCI Emerging Markets Small Cap ETF (EEMS) fell 6.67 points to 41.29 and Invesco KBW Bank ETF (KBWB) rounded out the bottom five losing 6.32 points to move to a Quant Score of 41.20.

ETFG Weekly Select List - the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model. Because of the Sector’s success on the 1W Quant Rating of the ETFG Heat Map, we’d like to highlight some substantial movement in the Natural Resources Sector when comparing this week’s Select List to last. First Trust Index Global Natural Resources Income ETF (FTRI) fell from first to third making way for FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) and Global X U.S. Infrastructure Development ETF (PAVE) to take the top two spots in the Natural Resources Select List. DJ Brookfield Global Infrastructure ETF (TOLZ) dropped to the four spot while newcomer SPDR S&P North American Natural Resources ETF (NANR) rounded out the sector Select List. With the sector as a whole posting a strong week, investors should consider these ETFs when reviewing their portfolios.

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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.

A Drop in Yield...

Monday June 3, 2019 - With markets closed Monday in observance of Memorial Day, stocks declined for the fourth week in a row due to rising trade tensions and geopolitical uncertainty. The S&P 500 moved below its 200-day moving average while volatility, as measured by the Cboe Volatility Index (VIX), spiked on Friday but remained a bit below its highs earlier in the month. Investors who focused on this month’s stock market pullback may have missed the more unexpected drop in the 10-year Treasury rate to 2.13% at the end of May. That’s the lowest rate in almost two years and once again below the 2.29% rate on 3-month Treasury bills – an inverted yield curve.

Although historically an inverted yield curve has been a reliable recession signal, it hasn’t been very useful for investors: Stocks have risen over the following year about half the time. Recessions have followed, but the delay has ranged from six months to nearly three years. Low interest rates and beneficial Fed policies have been a key source of support for rising stock prices, so don’t let short-term recession fears prompt you to alter your long-term investment strategy. Summing up, the S&P 500 finished the week down 74 points, the DJIA fell 770.65 points and the NASDAQ Composite dropped 183.86 points.

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

ETFG Quant Winners: This week’s biggest winner was Global X MSCI China Consumer Discretionary ETF (CHIQ) gained 8 points to end the week with a Quant score of 48.33. iShares MSCI Global Silver Miners ETF (SLVP) rose 7.23 points to 58.81 while Franklin FTSE Brazil ETF (FLBR) finished in a close third, gaining 7.21 points to finish with a Quant score of 55.79. Rounding out the top five were SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and Global X DAX Germany ETF (DAX) gaining 6.84 and 6.80 points respectively.

ETFG Quant Losers: This week’s biggest loser was iShares U.S. Infrastructure ETF (IFRA) falling 9.42 points to a Quant score of 46.20. AdvisorShares DoubleLine Value Equity ETF (DBLV) dropped 8.49 points to 47.45. Rounding out the bottom five were AAM S&P 500 High Dividend Value ETF (SPDV) down 7.88 to 39.56, SPDR Portfolio Small Cap ETF (SPSM) down 7.82 to 46.67 and SPDR Portfolio Mid Cap ETF (SPMD) ending up at 47.29 down 7.73 from last week.

ETFG Weekly Select List - the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model. Because of the sectors success on the 1W Quant Rating of the ETFG Heat Map, we’d like to highlight some substantial movement in the Basic Materials Sector when comparing this week’s Select List to last. SPDR S&P Metals & Mining ETF (XME) fell from the top spot last week to fourth this week, while iShares MSCI Global Silver Miners ETF (SLVP) went from being unranked to the top spot. Global X Gold Explorers ETF (GOEX) retained the second spot on the select list while U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU) was bumped up one spot to third. Rounding out the Basic Materials Sector on this week’s list is newcomer ETFMG Prime Junior Silver ETF (SILJ). Seemingly in line with every time economic uncertainty arises, investors have turned to precious metal ETFs to pad their portfolios and hedge against the risk of recession losses.

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.