/Tensions Home and Abroad

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.

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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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.

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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.

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