News Mentions & Press Releases

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…

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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.

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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.

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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.

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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.

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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.

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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.

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Marc Pfeffer on Money Life with Chuck Jaffe

January 10, 2019
Chuck Jaffe — Money Life

CLS Chief Investment Strategist Marc Pfeffer sits down as the Big Interview guest on Money Life with Chuck Jaffe. Marc discusses why investors should continue to take a long-term outlook despite the recent market decline. Plus, impacts of the ongoing trade war and other political tensions.

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CLS Investments Combines TAMP Business With Newly Acquired FTJ FundChoice

December 21, 2018
Diana Britton — WealthManagement.com

FTJ CEO Dean Cook will lead the initiative to bring the businesses together. The move will allow CLS to focus on investment management, which will be led by Rusty Vanneman, president and chief investment officer at CLS. CLS CEO Ryan Beach will transition to FTJ as president.

Advisors on the CLS platform will now have access to FTJ’s lineup of investment strategists.

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OMAHA, Neb.–(BUSINESS WIRE)–FTJ FundChoice, an open architecture TAMP based in Cincinnati, together with CLS Investments, LLC (“CLS”), a third-party money manager and a leading manager of exchange-traded fund (“ETF”) portfolios, today announces plans to unify their TAMP businesses under the direction of FTJ FundChoice CEO, Dean Cook. The move, which will take effect in early 2019, aligns the resources of two NorthStar Financial Services Group (“NorthStar”) subsidiaries serving a similar audience in ways that will enable each to provide a deeper and more meaningful service and solution experience.

Since NorthStar’s acquisition of FTJ FundChoice earlier this year, the two companies, which will combine to have over $14 billion in TAMP assets and an additional $4 billion in platform and privately managed assets, have worked to realign their collective resources in order to provide advisors with a unified platform dedicated to delivering access to a wide range of managers and strategies. With FTJ FundChoice adding depth and resources to its TAMP offering sales team, sister company CLS will, in turn, focus on its core competency of providing investment management.

“When we joined NorthStar, we realized that there was an opportunity to examine our resources and create better service options for FTJ FundChoice, CLS, and the greater advisor community,” said Dean Cook, CEO of FTJ FundChoice. “Now, we’re operationalizing a plan that will enable our TAMP to springboard the competition and deliver a more complete experience to our combined client base.”

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