Embracing Uncertainty (TWTW – Nov 13-17, 2017)

Embracing Uncertainty – In the Conduct of Monetary Policy” … Carolyn Wilkins, Senior Deputy Governor, Bank of Canada, speaking to Money Marketeers of New York University recently. In it, she spelled out the BoC’s desire to avoid a potentially costly policy reversal, while also suggesting that “caution has its limits”. Interesting times … on the one hand stronger growth than seen in quite some time … on the other – concerns about the real strength underneath it – perhaps? – as well as the impact of NAFTA negotiations increasingly expected to not end well, so long as the US maintains winner takes all objectives … oh, and still … this little Real Estate thingy too …

Latest Developments:

  •  GE – Yep, sure enough, the divi got chopped … Imagined … Reimagined … GE is 2017’s biggest dog as far as stocks go – AND at that, the company also succeeded in underwhelming analysts in terms of what it would (finally???) do about the mess it got itself into …
  • Halliburton … A GE Company – saw its stock hit in antipathy … I mean sympathy with GE, wishing likely that it … wasn’t. Some are suggesting the weakness is a buy opportunity
  • Airbus – Enjoyed a massive order, which it unveiled at the Dubai Airshow – click HERE!
  • Junk … High Yield – rebounded alongside equities late in the week, but some amongst other things continue to worry about the flattening of the yield curve … which they see as spelling trouble…
  • What’s next for ETFs – Barron’s week-end story about the future for ETFs, featuring Dave Nadig, Corey Hoffstein, Barry Ritholtz and Ben Fulton. Takes note of the slowdown in Smart Beta flows, as well as the existential question for Advisors, as articulated by Ritholtz: “The challenge for every advisor today is to explain what their value-add is, because the portfolios are, if not free, cheap“. Add Hoffstein’s observation that “Most of the industry agrees that we are entering a period of much lower returns for stocks and fixed income. That’s a problem for younger generations“. To that last one I’d add: and for all the other generations as well…
  • Goldman Sachs – Sees 4 FED hikes in 2018. Kind of makes me think … Maybe I don’t want any bonds at all … Never mind just reducing duration – cash vs bonds might be king going forward…
  • Tesla – Unveiling game changer Semi for Trucking industry, respectively insane sports car … Just in time to … get deposits on these great toys that should help it offset cash burn that … apparently is … rather quick itself …

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

ticker name change ticker name change ticker name change
XIU S&P/TSX 60 -0.02% PXG RAFI Global Fundamental 0.09% VCN FTSE Canada All Cap Index ETF -0.28%
XIC S&P/TSX Capped Composite -0.20% PXS RAFI US Fundamental Index 0.67% VCE FTSE Canada Index ETF -0.15%
CRQ RAFI CDN Fundamental -0.44% QQC/F NASDAQ 100 CAD Hedged 0.18% VUN CRSP US Total Market Index Unhedged 0.85%
XSP S&P 500 CAD Hedged -0.07% PZC RAFI CDN Small-Mid Fundam #N/A VSP S&P 500 CAD Hedged -0.07%
XUS S&P500 0.56% VXC FTSE All-World Ex Canada Index ETF 0.75%
XMU MSCI Min Vol US 0.74% XXM/b Morningstar US Value (Unh) 0.67% VEF FTSE Developed ex North-Am CAD H -0.96%
CLU RAFI US Fund 1000 CAD H -0.09% YXM/b Morningstar US Momentum (Unh) 2.33% VDU FTSE Developed ex North-America 0.26%
XSU Russell 2000 CAD Hedged 1.21% FXM Morningstar CDN Value 0.92% VE FTSE Developed Europe 0.59%
XIN MSCI EAFE CAD Hedged -1.09% WXM Morningstar CDN Momentum 0.56% VA FTSE Developed Asia Pacific 0.41%
XEH MSCI Europe IMI CAD H -0.84% VXM/b Morningstar Intl Value (Unh) -0.54% VEE FTSE Emerging Mkts 1.26%
XEC MSCI EM IMI 1.78% ZXM/b Morningstar Intl Momentum (Unh) 0.84% HAZ Active Global Dividends 0.62%
XMM MSCI Min Vol Emerging 1.50% RWE MSCI Europe Low Risk Weighted (H) -0.46% HHF Morningstar Hedge Fund Index -0.28%
CWO RAFI Broad Emerging 1.17% HMF Auspice Managed Futures -1.08%
CJP RAFI Fundam Japan CAD H -2.26% ZDJ Dow Jones CAD Hedged -0.20% HAC Seasonal Rotation 0.32%
CDZ CDN Div Aristocrats 0.23% ZEQ MSCI Europe High Quality CAD H -0.49% HPR Active Preferred Shares 0.36%
week of: Nov 13-17, 2017 OVERALL Source: ETFinsight/Bloomberg

Respectively through available “FACTORS” (Smart or Strategic Beta) ETFs:

ticker name change ticker name change
RAFI: Value: Yield:
CRQ RAFI CDN Fundamental -0.44% VXM/b Morningstar Intl Value (Unh) -0.54% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF 0.23%
CLU RAFI US Fund 1000 CAD H -0.09% XXM/b Morningstar US Value (Unh) 0.67% XHU iShares US High Dividend Equity Index ETF 0.58%
CJP RAFI Fundam Japan CAD H -2.26% FXM Morningstar CDN Value 0.92% VGG Vanguard US Dividend Appreciation Index ETF 1.02%
CWO RAFI Broad Emerging 1.17% XCV iShares Canadian Value Index ETF 0.07% CUD iShares US Dividend Growers Index ETF CAD-Hedged 0.68%
PXG RAFI Global Fundamental 0.09% VVL Vanguard Global Value Factor Etf 1.22%
PZC RAFI CDN Small-Mid Fundam #N/A Momentum:
YXM/b Morningstar US Momentum (Unh) 2.33%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) 0.84%
VVO Vanguard Global Minimum Volatility Etf -0.20% WXM Morningstar CDN Momentum 0.56% Multi-Factors:
XMW MSCI Min Vol World 0.77% VMO Vanguard Global Momentum Factor Etf 1.11% XFC iShares Edge MSCI Multifactor Canada Index ETF 0.42%
XMI MSCI Min Vol EAFE 0.52% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF 1.54%
XMM MSCI Min Vol Emerging 1.50% VLQ Vanguard Global Liquidity Factor Etf 0.92% XFI iShares Edge MSCI Multifactor EAFE Index ETF 0.34%
XMU MSCI Min Vol US 0.74% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada 0.00% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF -0.49% RWE First Asset MSCI Europe Low Risk Weighted ETF -0.46%
week of: Nov 13-17, 2017 FACTORS / SMART BETA / STRATEGIC BETA Source: ETFinsight/Bloomberg


Factors, Factors, and more Factors –  including Multi Factors, and Single Factors on a Global basis.

Active, you say? – See below, which captures weekly performance for ETFs managed by Strategists, or wraps incorporating several ETFs into one to solve for Conservative, Balanced, or Growth objectives:

ticker name change ticker name change ticker name change
HGM Horizons Managed Global Opportunities ETF 0.73%
EXGG Excel Global Growth Asset Allocation Etf 0.00% HAC Horizons Seasonal Rotation ETF 0.32%
EXGB Excel Global Balanced Asset Allocation Etf 0.00% HRA Horizons Global Risk Parity ETF 0.20%
HHF Horizons Morningstar Hedge Fund Index ETF -0.28%
DWG PowerShares DWA Global Momentum Index ETF 1.85%
SID First Asset US Trendleaders Index Etf 0.96%
XTR iShares Diversified Monthly Income ETF 0.35%
FIE iShares Canadian Financial Monthly Income ETF 1.32%
ZMI BMO Monthly Income ETF 0.06%
CBD iShares Balanced Income CorePortfolio Index ETF 0.09% FUT First Asset US Tactical Sector Allocation Index ETF -0.04%
ETP First Trust Global Risk Managed Income Index ETF 0.15% PRP Purpose Conservative Income Fund -0.19%
CBN iShares Balanced Growth CorePortfolio Index ETF 0.19%
week of: Nov 13-17, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

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Providers’ News:

iShares – Kron: What makes a successful Fiduciary relationship: Relationship and Service  

Vanguard: In pursuit of Alpha =>Click HERE!

BMO ETFs – Hosted their ETF Essential in TO, wrapping up their cross Canada tour. Amongst other things, several presenters spoke to implementation ideas with ETFs. One of the recurring themes … positioning for rising rates … with Prefs featuring prominently as go to solution … (ZPR; HPR; et al).

Horizons – Recently launched – Inovestor ETF => Click HERE!

Other – ETFinsight: Latest on the AUM front: up a tad, with market contribution slightly negative => Click HERE!

Weekly volume history to Nov 17, 2017:

volumes week ending nov 17, 2017

Top and Bottom performing ETFs for the week of November 13-17, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of Nov 13-17, 2017
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF 6.88% $12.67 6,121,215 $77,428,200
FHD CN Equity First Trust AlphaDEX US Consumer Discretionary Sector Index ETF 3.11% $23.72 24,254 $571,311
ZBK CN Equity BMO Equal Weight US Banks Index ETF 2.72% $24.75 605,261 $14,983,599
YXM/B CN Equity First Asset Morningstar US Momentum Index ETF 2.33% $17.39 89,247 $1,549,514
ZJG CN Equity BMO Junior Gold Index ETF 2.21% $8.58 200,184 $1,716,616
MEE CN Equity Mackenzie Maximum Diversification Emerging Markets Index Etf 2.02% $24.41 116,896 $2,834,358
ZID CN Equity BMO India Equity Index ETF 2.00% $23.55 230,370 $5,427,877
RXE CN Equity RBC Quant Emerging Markets Equity Leaders Etf 1.96% $25.64 19,451 $496,549
ZUB CN Equity BMO Equal Weight US Banks Hedged to CAD Index ETF 1.95% $27.47 1,668,800 $45,780,554
COW CN Equity iShares Global Agriculture Index ETF 1.94% $39.52 285,734 $11,225,891
Bottom Performers
CJP CN Equity iShares Japan Fundamental Index ETF CAD-Hedged -2.26% $16.17 134,468 $2,170,825
HNY CN Equity Horizons Natural Gas Yield ETF -2.40% $12.26 32,366 $400,579
XBM CN Equity iShares S&P/TSX Global Base Metals Index ETF -2.49% $12.95 194,338 $2,509,169
ZMT CN Equity BMO Equal Weight Global Base Metals Hedged to CAD Index ETF -2.62% $11.56 145,799 $1,666,708
HXE CN Equity Horizons S&P/TSX Capped Energy Index ETF -5.19% $20.44 67,392 $1,394,461
XEG CN Equity iShares S&P/TSX Capped Energy Index ETF -5.23% $12.37 19,263,657 $239,119,460
HEE CN Equity Horizons Enhanced Income Energy ETF -5.65% $12.43 50,971 $640,665
ZEO CN Equity BMO Equal Weight Oil & Gas Index ETF -5.73% $11.09 3,348,894 $37,283,202
ZJO CN Equity BMO Junior Oil Index ETF -5.76% $12.46 97,467 $1,203,617
OXF CN Equity First Asset Can-Energy Covered Call ETF -6.65% $9.35 34,794 $323,940

Top performing ETFs – Higher Highs (pun intended) for the Marijuana ETF ($HMMJ), bouncing back for US Banks (ZBK; ZUB); and notable weekly uptick in US Momentum…

Bottom line: yield curve flattening not great omen per se … performance of US Banks – will continue to hinge on … further hikes by the FED…

Bottom performing ETFs – In a nutshell Energy related, although Crude held its own…

Nov 30 meeting in Vienna – will OPEC “deliver” anything new? Is further weakness ahead if nothing of substance comes out of the meeting? On the other hand … with strength in Global backdrop … weakness opportunity to buy? oh, decisions, decisions …

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