Rationale Exuberance (TWTW – Dec 11-15, 2017)

Rationale Exuberance – David Kostin, Chief U.S. Equity strategist at Goldman Sachs,  describing the stock market recently, in a tongue in cheek reference to the famous Alan Greenspan 1996 warning against Irrational Exuberance …

The fact that the bullmarket we’re in has repeatedly been described as the most hated in history has kept animal spirits – at least that is what we are told – in check means that while valuations may be elevated, there could be further upside to come still, the caveat being the lifting will have to come from earnings, all the while hoping further Central Banks’ normalization doesn’t throw a wrench in the whole thing…

Latest Developments:

  • Janet Yellen – In what will in all likelihood be her final act as far as hiking rates, moved FED funds up 25 bps, as per consensus. The FED’s leadership baton gets passed on to Jerome Powell in early February, and while there is a January FOMC meeting, expectations are that Janet’s FED won’t change anything – opting instead to let Jerome take it from there …
  • Aviso Wealth – Credible alternative to Canada’s big banks emerge on the wealth management front? the Globe Clare O’Hara on

    New wealth management firm sets sights on Canada’s big banks

Credential Financial Inc., Qtrade Canada Inc. and NEI Investments have joined forces to launch a new independent wealth management firm in Canada that will be able to compete more aggressively with some of Canada’s largest financial firms, including the Big Five banks.

Read More => Click HERE!

Alabama Elections results – Delivered Trump’s pick Roy Moore a defeat described as “stunning” => Click HERE! 

Disney – Goes for the big deal with 21st Century Fox – Intensifying fight with NETFLIX ahead?  

Outlook for Oil – Bloomberg hightlights a significant divergence in expectations as far as crude inventories in 2018, between OPEC’s on the producers’ side, and the IEA on the consumers’ side. The implication – that both can’t be right – bears watching as far as impact on prices next year … Closer to home, Western Canadian Crude has come under pressure, with production overwhelming pipeline capacity, and more increases set for 2018 …

Hunter Harrison – CSX CEO passed away over the week-end. News that the former CEO of both Canadian Railway and Canadian Pacific Railway, had gone on an unexpected leave hit CSX’s stock price Friday. The passing of  Hedge Fund Manager Bill Ackman’s point man on the CP investment pressured the shares further on Monday…

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 -0.41% PXG RAFI Global Fundamental 0.60% VCN FTSE Canada All Cap Index ETF -0.31%
XIC S&P/TSX Capped Composite -0.20% PXS RAFI US Fundamental Index 1.07% VCE FTSE Canada Index ETF -0.46%
CRQ RAFI CDN Fundamental -0.13% QQC/F NASDAQ 100 CAD Hedged 1.85% VUN CRSP US Total Market Index Unhedged 0.83%
XSP S&P 500 CAD Hedged 0.89% PZC RAFI CDN Small-Mid Fundam 0.24% VSP S&P 500 CAD Hedged 0.96%
XUS S&P500 1.00% VXC FTSE All-World Ex Canada Index ETF 0.72%
XMU MSCI Min Vol US 1.13% XXM/b Morningstar US Value (Unh) 0.00% VEF FTSE Developed ex North-Am CAD H -0.05%
CLU RAFI US Fund 1000 CAD H 0.69% YXM/b Morningstar US Momentum (Unh) 0.22% VDU FTSE Developed ex North-America 0.20%
XSU Russell 2000 CAD Hedged 0.62% FXM Morningstar CDN Value -0.26% VE FTSE Developed Europe -0.14%
XIN MSCI EAFE CAD Hedged 0.00% WXM Morningstar CDN Momentum 0.00% VA FTSE Developed Asia Pacific 0.97%
XEH MSCI Europe IMI CAD H -0.08% VXM/b Morningstar Intl Value (Unh) 0.31% VEE FTSE Emerging Mkts 0.76%
XEC MSCI EM IMI 0.72% ZXM/b Morningstar Intl Momentum (Unh) 0.39% HAZ Active Global Dividends 0.46%
XMM MSCI Min Vol Emerging 1.33% RWE MSCI Europe Low Risk Weighted (H) -0.15% HHF Morningstar Hedge Fund Index 1.39%
CWO RAFI Broad Emerging 0.91% HMF Auspice Managed Futures 0.12%
CJP RAFI Fundam Japan CAD H 0.24% ZDJ Dow Jones CAD Hedged 1.37% HAC Seasonal Rotation 0.00%
CDZ CDN Div Aristocrats -0.26% ZEQ MSCI Europe High Quality CAD H -0.25% HPR Active Preferred Shares 0.00%
week of: Dec 11-15, 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 -0.13% VXM/b Morningstar Intl Value (Unh) 0.31% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF -0.26%
CLU RAFI US Fund 1000 CAD H 0.69% XXM/b Morningstar US Value (Unh) 0.00% XHU iShares US High Dividend Equity Index ETF 1.10%
CJP RAFI Fundam Japan CAD H 0.24% FXM Morningstar CDN Value -0.26% VGG Vanguard US Dividend Appreciation Index ETF 0.88%
CWO RAFI Broad Emerging 0.91% XCV iShares Canadian Value Index ETF -0.48% CUD iShares US Dividend Growers Index ETF CAD-Hedged 0.15%
PXG RAFI Global Fundamental 0.60% VVL Vanguard Global Value Factor Etf 0.35% XDUH iShares Core MSCI US Quality Dividend Index ETF CAD-Hedged 1.07%
PZC RAFI CDN Small-Mid Fundam 0.24% Momentum: XDU iShares Core MSCI US Quality Dividend Index ETF 1.22%
YXM/b Morningstar US Momentum (Unh) 0.22%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) 0.39%
VVO Vanguard Global Minimum Volatility Etf -0.23% WXM Morningstar CDN Momentum 0.00% Multi-Factors:
XMW MSCI Min Vol World 0.80% VMO Vanguard Global Momentum Factor Etf 0.50% XFC iShares Edge MSCI Multifactor Canada Index ETF -0.21%
XMI MSCI Min Vol EAFE 0.11% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF 0.08%
XMM MSCI Min Vol Emerging 1.33% VLQ Vanguard Global Liquidity Factor Etf 0.15% XFI iShares Edge MSCI Multifactor EAFE Index ETF 0.41%
XMU MSCI Min Vol US 1.13% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada -0.33% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF -0.25% RWE First Asset MSCI Europe Low Risk Weighted ETF -0.15%
week of: Dec 11-15, 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 -0.18%
EXGG Excel Global Growth Asset Allocation Etf 0.24% HAC Horizons Seasonal Rotation ETF 0.00%
EXGB Excel Global Balanced Asset Allocation Etf 0.28% HRA Horizons Global Risk Parity ETF 0.88%
HHF Horizons Morningstar Hedge Fund Index ETF 1.39%
DWG PowerShares DWA Global Momentum Index ETF 0.38%
SID First Asset US Trendleaders Index Etf 0.59%
XTR iShares Diversified Monthly Income ETF -0.09%
FIE iShares Canadian Financial Monthly Income ETF -0.13%
ZMI BMO Monthly Income ETF 0.00%
CBD iShares Balanced Income CorePortfolio Index ETF 0.13% FUT First Asset US Tactical Sector Allocation Index ETF 0.72%
ETP First Trust Global Risk Managed Income Index ETF 0.21% PRP #N/A #N/A
CBN iShares Balanced Growth CorePortfolio Index ETF 0.66%
week of: Dec 11-15, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

Providers’ News:

iShares – Turnill: 3 key investing themes to know in 2018 => Click HERE!

Vanguard – Robots will build better jobs => Click HERE!

Horizons ETFs – Thackray’s December Newsletter => click HERE!

Purpose Investments / Redwood Asset Management – Switch Listing Venue for some CEFs and UTFs from TMX to NEO Exchange => Click HERE!

Part of the rationale? Simple economics – as in the benefit of having NEO apply the same fee schedule to Closed End Funds as that applied to ETFs => Click HERE!

WisdomTree – Exchange ratios announced for Questrade ETFs => Click HERE!

Other:

Sphere – Confirms approval of transaction with Evolve => Click HERE!

Weekly volume history to Dec 15, 2017:

volumes week ending dec 15, 2017

Top and Bottom performing ETFs for the week of Dec 11-15, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of Dec 11-15, 2017
CALL CN Equity Evolve US Banks Enhanced Yield ETF 6.27% $21.19 28,480 $603,597
XBM CN Equity iShares S&P/TSX Global Base Metals Index ETF 5.84% $13.20 234,865 $3,134,678
ZJG CN Equity BMO Junior Gold Index ETF 5.72% $8.48 234,239 $1,999,396
ZMT CN Equity BMO Equal Weight Global Base Metals Hedged to CAD Index ETF 4.03% $11.68 90,542 $1,060,819
XMA CN Equity iShares S&P/TSX Capped Materials Index ETF 3.35% $12.92 676,146 $8,748,095
CYBR CN Equity Evolve Cyber Security Index ETF 3.14% $20.81 11,727 $244,067
FLUS CN Equity Franklin Libertyqt US Equity Index Etf 3.07% $21.82 416,105 $9,087,651
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF 2.92% $15.15 4,782,293 $72,505,192
ZGD CN Equity BMO Equal Weight Global Gold Index ETF 2.83% $8.95 230,814 $2,055,762
MXF CN Equity First Asset Can-Materials Covered Call ETF 2.64% $14.22 60,534 $871,151
Bottom Performers
HEE CN Equity Horizons Enhanced Income Energy ETF -2.81% $11.70 41,001 $481,144
HXE CN Equity Horizons S&P/TSX Capped Energy Index ETF -3.36% $19.49 47,839 $943,116
OXF CN Equity First Asset Can-Energy Covered Call ETF -3.42% $8.70 25,939 $226,506
XEG CN Equity iShares S&P/TSX Capped Energy Index ETF -3.54% $11.74 15,618,001 $183,466,600
ZEO CN Equity BMO Equal Weight Oil & Gas Index ETF -3.73% $10.62 3,568,508 $37,980,551
HNY CN Equity Horizons Natural Gas Yield ETF -4.12% $10.74 39,648 $425,343
ZJO CN Equity BMO Junior Oil Index ETF -4.24% $12.30 89,461 $1,099,664
HUN CN Equity Horizons Natural Gas ETF -4.53% $5.63 192,673 $1,083,752
HUV CN Equity BetaPro S&P 500 VIX Short-Term Futures ETF -6.97% $5.12 121,513 $623,765
CCX CN Equity Auspice Canadian Crude Oil Index ETF -12.18% $8.46 190,429 $1,543,897

Top Performing ETFs for the week: Strength in Base Metals and Gold, alongside notable volumes in the Marijuana Life Sciences ETF on the + side.

Bottom Performing ETFs for the week: Energy under pressure – see the above comment in relation to Western crude. You can bet that BoC Governor Poloz is going to be keeping a very close eye on that Oil differential … which could become problematic as we roll into 2018 with further production increases coming online…

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