News Mentions & Press Releases

Emerging Markets Are Poised to Rally Again

March 19, 2019
Craig Mellow — Barron's

After a hot January, emerging market stocks are now again underperforming their U.S. peers.

The iShares MSCI Emerging Markets exchange-traded fund (ticker: EEM) is up 9% year-to-date, against 12% for the S&P 500.

But conditions remain ripe for a further rally in emerging markets, investors say. The macro risks that have been frightening investors—from a Chinese hard landing to an escalating Washington-Beijing trade war—seem to be lessening. The U.S. economy is slowing to a “Goldilocks” pace from the standpoint of emerging markets: vigorous enough to support global growth, but measured enough to keep the Federal Reserve dovish. And valuations remain cheap by historical standards.

“Our central position is for positive outcomes on the big issues,” says Jorge Mariscal, chief investment officer for emerging markets at UBS Global Wealth Management. “We are overweight global emerging market equities.”

Read the Full Article

JPMorgan ETFs Are a Hit, But With Its Own Clients

March 11, 2019
Asjylyn Loder — The Wall Street Journal

JPMorgan Chase & Co. launched an exchange-traded fund last June that invests in Japanese stocks. The fund raised $1.7 billion in six weeks, making it one of the fastest ETFs ever to surpass $1 billion in assets.

The biggest buyers: JPMorgan’s clients.

(Subscription required)

Read the Full Article

8 Ways to Capture Momentum In Your Portfolio

March 8, 2019
Rebecca Lake — U.S. News & World Report

Buying stocks or other securities with high returns.

Momentum investing is designed to track market upticks. “This strategy aims to capture the swings of certain areas of the market when they’re hot, while avoiding the areas that are in a downtrend,” says Mike Windle, partner at C. Curtis Financial Group in Plymouth, Michigan. He touts exchange-traded funds, which operate similarly to mutual funds that trade like stocks, for this approach. “ETFs will give you far better diversity within an asset class or sector, but still allow the flexibility of intraday trading, so you can get out if the momentum swings,” he says. But stock and mutual funds picks can still capture momentum. Here are eight investments for putting a momentum strategy to work.

iShares Edge MSCI USA Momentum Factor ETF

MTUM offers exposure to more than 100 individual stocks, centered on large- and mid-cap U.S. companies. Shana Sissel, portfolio manager at CLS Investments says it’s a good pure-play option. “It’s giving you six and 12 months without mixing anything else like earned momentum or other factors to gain additional momentum exposure.” MTUM is one of the largest ETFs of its kind, and “from a trading, execution and liquidity standpoint, it’s an easy opportunity to gain exposure,” Sissel says. Performance-wise, the fund has a solid track record, producing an average annual total return of 13.7 percent since its inception in December 2014.

Read the Full Article

The Various Flavors of Quality ETFs

March 8, 2019
Kostya Etus, CFA — ETF Trends

Everyone loves high quality! How could they not? The word “quality” is synonymous with “good,” and in almost all fields of human endeavor, high quality is viewed more favorably than low quality. When you go looking for a new car, do you ask for a low-quality one?

But quality investments are particularly important during volatile and unpredictable markets. The reason is simple: higher-quality companies have more confident management, which may have a greater ability to weather market downturns. These companies typically provide increased stability and have the potential to outperform over time as they tend to have higher profitability, stronger balance sheets, and consistent earnings growth.

But don’t take my word for it. There is a lot of empirical evidence and many academic studies emphasizing the benefits of quality investments. Here are a few of my favorites…

Read the Full Article

U.S. Stocks Remain Unchanged on Economic Data

March 4, 2019
Jessica Menton — The Wall Street Journal

U.S. stocks rebounded Friday, propelled by a rise in energy shares as investors analyzed a batch of new economic data and waited for signs on U.S.-China trade talks.

(Subscription required)

Read the Full Article

Smart(er) Beta in the ETF Universe

February 21, 2019
Grant Engelbart, CFA, CAIA — ETF Trends

Smart beta has become synonymous with the ETF universe, soaring in popularity after the 2008 financial crisis. By Morningstar’s measure, there are almost 700 smart beta ETFs in the marketplace (30% of the total). With this explosion of launches and products (factor, multifactor, double factor, comprehensive factor, diversified; you get the point) the natural question is: do these products truly work? I don’t have a firm answer because of the sheer number of ways to measure “work” and the fact that time is needed to assess any product’s performance. However, I found some interesting results by reviewing the equity smart beta space in aggregate to see if more launches are adding or subtracting value.

This was definitely a crude attempt but an important assessment of the universe. I reviewed three different measures (you could look at infinitely more) that would be natural fits when observing performance. In each, I used the Morningstar category index, or the index assigned to a particular ETF, to measure performance. Note this is not the ETF’s underlying benchmark, nor is it the Morningstar category return.

Read the Full Article

Stocks edge higher as investors watch trade talks, await Fed minutes

February 20, 2019
Chris Matthews — MarketWatch

U.S. stocks rose modestly Wednesday, as investors kept an eye on U.S.-China trade talks in Washington and awaited minutes of the Federal Reserve’s January policy meeting later in the afternoon.

What are stock indexes doing?

The Dow Jones Industrial Average rose 15 points, or 0.1%, to 25,906, while the S&P 500 index rose 2 points, or 0.1%, to 2782. The Nasdaq Composite Index was up 20 points, or 0.3%, at 7,506.

What’s driving the market?

Trade remains in the spotlight despite few concrete developments. Stocks appeared to find some support Tuesday after President Donald Trump said there was nothing “magical” about a March 1 deadline for U.S.-China negotiations, which was taken as a sign that tariffs on imports of Chinese goods might not automatically be raised to 25% from 10% on that date if a formal deal hasn’t been completed.

Read the Full Article

More Active ETFs Are Coming to Market

February 13, 2019
Bernice Napach — ThinkAdvisor

There will be more actively managed and eventually even nontransparent ETFs coming to market in the future, but not every strategy lends itself to that structure.

That’s one of the main takeaways from a panel at the Inside ETFs conference in Hollywood, Florida.

Actively managed ETFs have a better risk profile in less efficient markets but don’t belong in funds focusing on alternatives, said Shana Sissel, portfolio manager at CLS Investments.

They provide more choice for investors, especially for taxable accounts, said Dodd Kittsley, national director at Davis Advisors funds, whose current ETF lineup includes active and passive funds.

Read the Full Article

The Snack You Know: Home-Country Investing Bias

February 6, 2019
Jackson Lee, CFA — ETF Trends

My wife and I were doing our grocery shopping at Costco recently, and while we were browsing the snack section, she spotted some pistachios. For anyone who has snacked on pistachios before, you probably know that they are far more expensive than many other nuts, such as almonds or peanuts. But as I reached for the house brand to save a few dollars, my wife stopped me and said she wanted to go with the more popular brand, even though it cost almost twice as much! Fortunately, Costco was offering some samples of the house brand that day, and after trying a few, my wife was persuaded.

I’m sure we can all relate to this classic consumer/domestic battle, and I must admit, I am also guilty of this irrational behavior. Humans tend to choose the product they know and are often willing to pay a premium for it, even when it’s identical to a cheaper brand. This irrational behavior can also be seen in investing. Investors like to stick with the stocks they know, and this often means investors are confined by a home-country bias.

Read the Full Article

Stocks Decline as Growth Concerns Resurface

January 29, 2019
Michael Wursthorn and Avantika Chilkoti — The Wall Street Journal

The Dow Jones Industrial Average fell more than 300 points Tuesday, the blue-chip index’s first decline in five trading sessions, as concerns over trade and global growth resurfaced.

Stocks opened the holiday-shortened week on shaky footing after the International Monetary Fund reduced its forecast for global economic growth in 2019, forcing investors to again confront the possibility that some major economies around the world, including China and Europe, are weakening faster than expected.

Read the Full Article