Peak Uncertainty (TWTW – Jan 16-20, 2017)

Peak Uncertainty – Thus did Billionaire George Soros describe this point in history in a Bloomberg interview at the World Economic Forum in Davis, Switzerland. This, with Friday’s inauguration of Donald J Trump as 45th President of the United States. The Donald, of course, himself a Billionaire – though of the populist persuasion …

And now, with AMERICA FIRST the Leitmotiv of both the Trump campaign and his inaugural speech – the World awaits, as far as finding out exactly how much President Trump can extract from one and all, in his quest to look after America’s interests first and foremost, in all facets of his dealings with everyone and anyone…

Protectionism and anti-globalism? We’re about to find out in the not too distant future. After all, if your art is the art of the deal, why not get on with the task of striking deals left right and center as soon as possible, so as to get to the intended destination in the shortest order…

Recent Developments:

  • UK – British PM Theresa May looks to be pursuing a “Hard Brexit”, explaining that her aim is to achieve her wish list in the two years articlel 50 allows for in terms of negotiations – failing which she’d simply go for … “No deal at all”.
  • NATO  –  Again the object of Trump criticism, as he otherwise floats idea of a nuke deal with Russia’s Putin. The latter, in a rather bizarre statement of support for the US Pres elect, also commented on the quality of Russia’s … girls of a low social class – in passing deeming them the best in the world
  • China – Chinese President Xi Jinping spoke out against protectionism, stating: “Protectionism is like locking yourself in a dark room, which would seem to escape wind and rain, but also block out the sunshine”.
  • Bank of Canada  – Governor Stephen Poloz leaves rate cut possibility on the table to deal with downside risks to the economy – read uncertainty associated with the incumbent administration in the US (?). BUT – Vanguard, for its part, expects the BoC to follow the US lead later this year and raise rates as well…
  • Hedge Fund Manager Dahlio – Predicted the possible end of globalization
  • CSX – The stock rallies sharply as the earlier than earlier expected exit of CP’s CEO Hunter Harrison sees him partner with activist investor Paul Hilal to target the company.

Latest market numbers as seen through the ETFs providing exposure to the most commonly referred to benchmarks:

ticker name change ticker name change ticker name change
XIU S&P/TSX 60 0.52% PXG RAFI Global Fundamental 1.14% VCN FTSE Canada All Cap Index ETF 0.38%
XIC S&P/TSX Capped Composite 0.35% PXS RAFI US Fundamental Index 1.39% VCE FTSE Canada Index ETF 0.52%
CRQ RAFI CDN Fundamental -0.13% QQC NASDAQ 100 CAD Hedged #N/A VUN CRSP US Total Market Index Unhedged 1.22%
XSP S&P 500 CAD Hedged -0.12% PZC RAFI CDN Small-Mid Fundam 0.00% VSP S&P 500 CAD Hedged -0.10%
XUS S&P500 1.37% VXC FTSE All-World Ex Canada Index ETF 1.25%
XMU MSCI Min Vol US 1.65% XXM/b Morningstar US Value (Unh) 0.96% VEF FTSE Developed ex North-Am CAD H -0.75%
CLU RAFI US Fund 1000 CAD H -0.66% YXM/b Morningstar US Momentum (Unh) 0.39% VDU FTSE Developed ex North-America 0.99%
XSU Russell 2000 CAD Hedged -1.33% FXM Morningstar CDN Value -0.75% VE FTSE Developed Europe 1.27%
XIN MSCI EAFE CAD Hedged -0.84% WXM Morningstar CDN Momentum 0.60% VA FTSE Developed Asia Pacific 0.50%
XEH MSCI Europe IMI CAD H -0.63% VXM/b Morningstar Intl Value (Unh) 1.72% VEE FTSE Emerging Mkts 0.95%
XEC MSCI EM IMI 0.92% ZXM/b Morningstar Intl Momentum (Unh) 2.04% HAZ Active Global Dividends 1.51%
XMM MSCI Min Vol Emerging 1.00% RWE MSCI Europe Low Risk Weighted (H) -0.89% HHF Morningstar Hedge Fund Index 0.29%
CWO RAFI Broad Emerging 1.93% HMF Auspice Managed Futures -1.60%
CJP RAFI Fundam Japan CAD H -0.70% ZDJ Dow Jones CAD Hedged -0.29% HAC Seasonal Rotation 0.00%
CDZ CDN Div Aristocrats 0.15% ZEQ MSCI Europe High Quality CAD H -0.71% HPR Active Preferred Shares -0.11%
week of: Jan 16-20, 2017 Source: ETFinsight/Bloomberg

Weekly Volumes for the week of January 16-20, 2017:

weekly volume data:
Total Volume non-leveraged $5,491,743,003
top 10 Volume non leveraged $2,639,307,219
Total Volume leveraged $1,674,773,733
top 5 Volume leveraged $1,170,097,748
Total Volumes overall: $7,166,516,736
Top 10 + Top 5: $3,809,404,967
top 10 non leveraged % of total nl: 48.1%
top 5 leveraged % of total leveraged 69.9%
Top 10 + Top 5 as % of total traded: 53.2%

etfinsight volumes for week ending january 20, 2017

iShares – Small: “The Faces behind the ETF Growth Phenomenon”

Koesterich: “3 tell tale signs the Japan Rally may not be over”

Vanguard – Chairman and CEO’s perspective on the markets => Click HERE!

Horizons – More currency management / exposure / strategies solutions => Click HERE!

Caroline Escott: Horizons Preferred Shares ETFs update

Following a very challenging 2015, the preferred share market has seen strong performance over the past 12 months. There were a number of issues that weighed on preferred shares in 2015, namely declining rates and record levels of new issuance.  In addition, the first rate resets came up for renewal and were reset at lower rates, which put additional pressure on an already out of favor asset class.

Now, after strong performance in 2016, with the asset class up ~7.0%, where does that leave the outlook for 2017 for preferred shares?  Fiera Capital is the sub advisor for Horizon’s preferred class issues, Horizons Active Preferred Share (HPR) and Horizons Active Floating Rate Preferred (HFP). Nicholas Normandeau, manager of Horizons Preferred ETFs believes that the market remains attractive, although not as attractive as it was in early 2016.  

Nick and his team have delivered strong performance through active security selection and structure selection within the preferred share market.  As we all know, past performance is no guarantee of future performance, but HPR has outperformed the benchmark since inception and through various market environments. For reference, HPR delivered a total return of 9.6% in 2016.  In 2015 the S&P/TSX Preferred Share Index declined 15.0% while HPR fell less, down 12.1%.  If ones shares Nick’s views that the market remains attractive, buying some exposure to the expertise and track record HPR or HFP offers should be of interest.  

First Asset – Valuations of terminated ETFs => Click HERE! Latest as far as Momentum versus Value: Value ahead in US, but Momentum picking up in Canada and on International side. 

Other:

Kim Inglis – Revisiting TFSA => Click HERE!

Research Affiliates – “How not to get fired with Smart Beta Investing”

Barron’s – Time to invest in Alphabet … =? Time to add to Nasdaq 100 ETF exposure (?) seeing Alphabet second largest holding in that index?

Invesco PowerShares – more listings on NEO Exchange => Click HERE!

Top and Bottom performing ETFs for the week of January 16-20, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of (Jan 16-20, 2017)
XBZ CN Equity iShares MSCI Brazil Index ETF 3.85% $13.17 40,709 $532,878
SBT/B CN Equity Silver Bullion Trust 3.53% $12.44 29,661 $365,112
FHB CN Equity First Asset European Bank ETF 3.19% $7.89 61,689 $490,773
XGD CN Equity iShares S&P/TSX Global Gold Index ETF 3.04% $13.05 10,656,742 $139,211,481
ZLE CN Equity BMO Low Volatilty Emerging Markets Equity ETF 2.49% $19.87 180,366 $3,539,047
ZGD CN Equity BMO S&P/TSX Equal Weight Global Gold Index ETF 2.29% $10.63 154,588 $1,642,458
XHU CN Equity iShares US High Dividend Equity Index ETF 2.17% $22.31 77,967 $1,748,512
CGL/C CN Equity iShares Gold Bullion ETF 2.15% $14.11 246,325 $3,461,335
COW CN Equity iShares Global Agriculture Index ETF 2.09% $35.56 77,255 $2,741,910
ZXM/B CN Equity First Asset Morningstar International Momentum Index ETF 2.04% $24.67 16,990 $419,811
Bottom Performers
XSU CN Equity iShares U.S. Small Cap Index ETF (CAD-Hedged) -1.33% $29.03 1,106,399 $32,107,668
ZDH CN Equity BMO International Dividend Hedged to CAD ETF -1.34% $21.57 54,595 $1,176,181
HHL CN Equity Healthcare Leaders Income ETF -1.36% $8.07 1,525,382 $12,310,318
ZUH CN Equity BMO Equal Weight US Health Care Hedged to CAD Index ETF -1.41% $40.91 256,034 $10,488,851
XHC CN Equity iShares Global Healthcare Index ETF (CAD-Hedged) -1.55% $38.97 90,141 $3,511,662
HMF CN Equity Horizons Auspice Managed Futures Index ETF -1.60% $9.91 57,698 $574,592
ZUB CN Equity BMO Equal Weight US Banks Hedged to CAD Index ETF -2.23% $25.51 1,656,986 $42,102,499
HUV CN Equity BetaPro S&P 500 VIX Short-Term Futures ETF -3.43% $7.52 196,759 $1,471,037
HNY CN Equity Horizons Natural Gas Yield ETF -3.80% $15.63 39,830 $621,898
HUN CN Equity Horizons Natural Gas ETF -3.99% $7.20 38,542 $279,261

Top Performing ETFs – Gold and related ETFs continued to regain some of the ground lost since Trump’s election, with European banks gaining ground all the while US ones retreated (ZUB) …

Bottom Performing ETFs – Nat Gas ETFs eased off from the gains booked a week prior, US banks retreated modestly, yet volatility overall remained subdued – something which could change in the days ahead…

Sectors breakdown for the week:

sectors performance for the week of jan 20, 2017

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