2Q 2021 – ETF Global Dynamic Model Portfolio Rebalance

Wednesday, April 7, 2021 – While the COVID-19
pandemic remains far from over, key elements to a transition to normalcy began
to either take root or accelerate in the first quarter of 2021. Domestically,
the outlook brightened considerably with supportive fiscal and monetary stimulus
and a promising vaccination rollout. By the end of the quarter, the federal
government had authorized, and was in the process of deploying, another $1.9
trillion in COVID-19 relief, bringing the total fiscal support to nearly $5
trillion since the onset of the pandemic in March 2020. The optimism sparked by
this new, sizeable relief package was bolstered by the Federal Reserve’s pledge
to continue to hold interest rates near zero and a vaccination campaign that
has yielded around one-third of all U.S. adults receiving at least one vaccine
dose as of the end of March. It is against this backdrop that we present our ETF Global Dynamic Model
quarterly update.

While the composition of our equity fund allocations
changed noticeably from Q1 to Q2, several factors remained in favor by our
model. The size and value factors continued to score well. This orientation
towards the size and value factors first emerged towards the end of 2020, as
investors began to look beyond high-flying technology companies and towards
beaten-down sectors that would benefit from a post-COVID economic reopening.

In our domestic equity allocation, the size factor
figured prominently. Three of our four domestic equity positions are either mid
or small cap funds, with our top ranked fund being the iShares S&P Mid-Cap
400 Growth ETF (IJK). This replaced the iShares S&P Small-Cap 600 Value ETF
(IJS), which moved down to our third ranked spot. As in the first quarter,
value remained in favor by our model, occupying two of the four funds in our
domestic equity allocation. However, in a reversal from past quarters, our model
now sees merit in the growth factor, with our first and fourth ranked domestic
equity funds having growth tilts. After being outperformed by value stocks on a
year-to-date basis by the widest margin since 2001, our model indicates that
the growth sell-off may have been overdone and there are some attractive
opportunities within the space.

Internationally, our two single country positions held
steady. However, there was an interesting shakeup in the regional and factor
orientations of our other two positions. Occupying the top spot, the Pacer
Trendpilot European Index ETF (PTEU) supplanted the WisdomTree International
Multifactor Fund (DWMF). In the second position, the Schwab Fundamental
International Large Company Index ETF (FNDF) replaced First Trust Developed
Markets ex-US AlphaDEX Fund (FDT). Last quarter, our model favored broad
regional and factor exposures. Now, there has been a shift towards more
targeted exposures, with emphases on developed European equities and the value
factor. This shift captures a key trend in our model that previously
out-of-favor groups appear poised to benefit as vaccinations and economic
re-openings gather pace.

Echoing our other regional equity allocations, the value
factor held primacy within our emerging markets allocation with the Schwab
Fundamental Emerging Markets Large Company Index ETF (FNDE) ranking as our top
fund. As with our international allocation, there was a similar Q1 to Q2 shift
from multifactor to value and broad-based to regional funds.

Thank you for following the ETF Global Dynamic Model
Portfolios, you can find an overview and performance information at http://www.etfg.com/about-model-portfolios.  To learn more about our ETFG Model Portfolio
strategy, please email us at [email protected]
or call us at (212) 223-ETFG (3834).

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


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
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

This publication has been prepared for general
guidance on matters of interest only and does not constitute professional
advice. You should not act upon the information contained in this publication
without obtaining specific professional advice. No representation or warranty
(express or implied) is given as to the accuracy or completeness of the
information contained in this publication, and, to the extent permitted by law,
ETF Global does not accept or assume any liability, responsibility or duty of
care for any consequences of you or anyone else acting, or refraining to act,
in reliance on the information contained in this publication or for any
decision based on it.

Sponsored Financial Content