Brexit = Scots Out? (TWTW – Mar 27-31, 2017)

Brexit = Scots Out? With British PM Theresa May delivering the “letter” triggering article 50 of the Lisbon Treaty – the natural question is: What’s next? Other than an anticipated painful 2 years of negotiations between the EU and the UK?

In the meantime, will the UK itself face an existentialist moment as it faces possibly similar kind of dynamics with Scotland?  Naturally, while the British Government immediately poured cold water on Scotland’s demand for a new independence referendum, it doesn’t deal with the fact that the Scots see it differently – as indeed they, alongside Northern Ireland, voted against BREXIT …

The world remains a very unhappy place indeed …


Latest Developments

  • BREXIT – is now underway, with British Prime Minister Theresa May delivering on her earlier promise to kick the timeline for BREXIT negotiations by Mar 31, 2017
  • BlackRock – announced it is folding 11% of its active equity mutual funds into Smart Beta, resulting in several Portfolio Managers stepping down
  • Cenovus – piling on debt in the latest massive Oil Sands related deal seeing an effective repatriation of ownership to Canadian firms …
  • The USD – has by now wiped out most all post Trump election gains … as markets particularly post Healthcare legislation flop, view the implementation of his various initiatives/plans as challenged…
  • Bombardier – the company’s latest news as far as bonuses caused an uproar … Get Government bailout, check; raise bonuses for management, check. And one wonders about the resulting resentment …
  • Naughty Naughty – Encrypted messaging services like WhatsApp and Signal – are seen challenging Compliance on Wall Street … Read more => click HERE!

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 0.63% PXG RAFI Global Fundamental -0.36% VCN FTSE Canada All Cap Index ETF 0.83%
XIC S&P/TSX Capped Composite 0.83% PXS RAFI US Fundamental Index 0.21% VCE FTSE Canada Index ETF 0.83%
CRQ RAFI CDN Fundamental 0.79% QQC/F NASDAQ 100 CAD Hedged 1.28% VUN CRSP US Total Market Index Unhedged 0.34%
XSP S&P 500 CAD Hedged 0.82% PZC RAFI CDN Small-Mid Fundam VSP S&P 500 CAD Hedged 0.89%
XUS S&P500 0.26% VXC FTSE All-World Ex Canada Index ETF -0.15%
XMU MSCI Min Vol US -0.44% XXM/b Morningstar US Value (Unh) 1.71% VEF FTSE Developed ex North-Am CAD H 0.66%
CLU RAFI US Fund 1000 CAD H 1.02% YXM/b Morningstar US Momentum (Unh) 1.33% VDU FTSE Developed ex North-America -0.36%
XSU Russell 2000 CAD Hedged 2.35% FXM Morningstar CDN Value 0.34% VE FTSE Developed Europe -0.37%
XIN MSCI EAFE CAD Hedged 0.61% WXM Morningstar CDN Momentum 2.51% VA FTSE Developed Asia Pacific -0.66%
XEH MSCI Europe IMI CAD H 1.60% VXM/b Morningstar Intl Value (Unh) -0.90% VEE FTSE Emerging Mkts -1.82%
XEC MSCI EM IMI -1.59% ZXM/b Morningstar Intl Momentum (Unh) -0.86% HAZ Active Global Dividends -0.34%
XMM MSCI Min Vol Emerging -1.18% RWE MSCI Europe Low Risk Weighted (H) 0.32% HHF Morningstar Hedge Fund Index 0.80%
CWO RAFI Broad Emerging -1.27% HMF Auspice Managed Futures 0.86%
CJP RAFI Fundam Japan CAD H -0.78% ZDJ Dow Jones CAD Hedged -0.20% HAC Seasonal Rotation 0.92%
CDZ CDN Div Aristocrats 0.78% ZEQ MSCI Europe High Quality CAD H 0.36% HPR Active Preferred Shares 0.22%
week of: Mar 27-31, 2017 Source: ETFinsight/Bloomberg

Weekly Volumes for the week of Mar 27-31, 2017:


weekly volume data:
Total Volume non-leveraged $6,173,439,482
top 10 Volume non leveraged $3,061,308,452
Total Volume leveraged $1,602,293,017
top 5 Volume leveraged $1,044,388,880
Total Volumes overall: $7,775,732,499
Top 10 + Top 5: $4,105,697,332
top 10 non leveraged % of total nl: 49.6%
top 5 leveraged % of total leveraged 65.2%
Top 10 + Top 5 as % of total traded: 52.8%

Recent Volumes history:

volumes week ending mar 31, 2017

iShares – Richardson: Regional Banks – A league of their own?

Koesterich: the seesaw relationship of volatility and momentum stocks

Vanguard – Davis: Weathering a low growth investments outlook

BMO ETFs – Several members of the BMO ETFs team were on hand to open the market on Friday, to mark the firm’s launch of their latest ETFs in early February => Click HERE! The secret of the firm’s success in the past 7 years, as AUM reaches some $37 Billion? According to VP Kevin Prins: Listening to Advisors and Portfolio Managers, and delivering the solutions they were looking for to build better portfolios for investors…

Horizons ETFs – is poised to launch the world’s first Medicinal Marijuana Life Sciences ETF in the world next week => Read more=> click HERE! and … NOPE, the ticker isn’t POT; DOPE; or HASH … it is HMMJ!

Will it be a big Asset gatherer for Horizons? I asked as much last week when I tweeted about it, asking whether a) it would join the $ 1 Billion AUM ETF crowd (which actually in Canada isn’t a crowd in relation to the space, but rather an exclusive club…) or b) would find itself confined to the bin of essentially fringe ETFs doomed to “enjoy” (actually exactly the opposite of that…) less than $50MM of AUM ad aeternam… 

The lone answer I received – from Bloomberg ETF analyst Eric Balchunas – it could be a $200MM ETF at some point. What are your thoughts?

Mine? Nat Gas ETFs at one point had hundreds of million of dollars in them… We could be seeing a bubble in marijuana stocks, and so … the sky could conceivably be the limit. That said … Considering betting a beer with Eric that we won’t see $200MM within a year. $100MM would be very respectable already…

First Asset – No clear across the board Momentum versus Value dominance this past week – except in Canada, where differential tilted to momentum. A one off?

Other: MSCI – BREXIT analysis => Read More, Click HERE!

Principles for Responsible Investment / MSCI ESG – I attended an excellent luncheon panel discussion Friday, discussing the outlook for the next 10 years.

Important takeaways – Regulation has been coming out fast and furious. A link between regulation and its ultimate aims, which often appears to be missing must be clearly articulated up front, helping improve results, and accountability. Regulatory response and follow up to stakeholders inputs and moves ought to pick up speed.

Significantly: “The PRI’s analysis shows that companies in coutnries with mandatory, government-led comprehensive ESG reporting requirements have, on average , a 33% better MSCI ESG Rating score than those without. This scores indicates better  ESG risk management practices relative to risk exposure”.  

and … “We also tested the relationship between voluntary ESG disclosure requirements. We found a small positive relationship, but far less significant than when we looked at mandatory regulations”…

NEO Exchange – Keeps fighting the battle for market data access for Canadians:

“We’ve refocused the discussion at to highlight the central issue – Canadian investors require access to real-time consolidated market data in order to make informed decisions”.  

From the perspective of someone strongly supportive of ETFs amongst other things because of their Transparency – I can’t help but see fairness in data access and accessing said data in a fulsome fashion (as opposed to getting an incomplete picture) as critical in that respect as well. “Let there be light”!

Here is how to support NEO’s initiative on that front => click HERE!

Top and Bottom performing ETFs for the week of Mar 27-31, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of Mar 27-31, 2017
CCX CN Equity Auspice Canadian Crude Oil Index ETF 9.07% $7.99 53,782 $430,623
ZJO CN Equity BMO Junior Oil Index ETF 6.08% $15.11 600,035 $9,052,629
HUC CN Equity Horizons Crude Oil ETF 4.71% $11.47 85,114 $974,962
FHE CN Equity First Trust AlphaDEX US Energy Sector Index ETF 3.59% $12.97 39,537 $508,923
WXM CN Equity First Asset Morningstar Canada Momentum Index ETF 2.51% $15.35 215,396 $3,293,696
XXM CN Equity First Asset Morningstar US Value Index ETF 2.38% $13.16 291,108 $3,821,408
XSU CN Equity iShares U.S. Small Cap Index ETF (CAD-Hedged) 2.35% $29.30 2,114,952 $61,489,032
SVR CN Equity iShares Silver Bullion ETF 2.33% $10.03 68,575 $687,345
ZMT CN Equity BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF 1.85% $9.84 168,024 $1,647,359
HXE CN Equity Horizons S&P/TSX Capped Energy Index ETF 1.76% $20.70 47,124 $975,620
Bottom Performers
XEC CN Equity iShares Core MSCI Emerging Markets IMI Index ETF -1.59% $25.03 594,926 $14,866,824
ZEM CN Equity BMO MSCI Emerging Markets Index ETF -1.73% $18.42 193,837 $3,565,026
XGD CN Equity iShares S&P/TSX Global Gold Index ETF -1.74% $13.13 10,617,605 $139,201,115
XEM CN Equity iShares MSCI Emerging Markets Index ETF -1.74% $29.66 162,517 $4,810,004
VEE CN Equity Vanguard FTSE Emerging Markets All Cap Index ETF -1.82% $32.18 615,415 $19,822,826
HEP CN Equity Horizons Enhanced Income Gold Producers ETF -2.23% $25.67 89,495 $2,317,391
RXD CN Equity RBC Quant Emerging Markets Dividend Leaders ETF -2.38% $20.41 20,125 $410,127
XCH CN Equity iShares China Index ETF -2.41% $25.09 53,579 $1,342,344
FHB CN Equity First Asset European Bank ETF -2.96% $8.33 95,563 $793,125
HUV CN Equity BetaPro S&P 500 VIX Short-Term Futures ETF -6.11% $5.60 217,715 $1,278,828

Top Performing ETFs – Nat Gas and Oil ETFs topped gainers for the week, lifting Energy related ETFs in the process. Momentum, respectively Value had decent upticks in Canada respectively the States, and Small Caps (US) steadied.

Bottom Performing ETFs – EM ETFs found themselves at the losing end for the final week of the quarter. Some profit taking after an excellent relative first quarter (vs developed)? Or, a delayed reaction to the latest FED hike, respectively the two additional that are still poised to materialize?

Last week’s Sector Performance:

One lone sector in the red for the week: Materials … but very marginally so.

sector week ending mar 31, 2017

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