I-Invest 2016 ETF Awards

Congratulations! Accuvest Global Advisors recently was reviewed by I-Invest and selected to receive a 2016 ETF Award.

The Accuvest Global Core Equity strategy was named as the “Best Diversified Global Equity Fund (3 Years)”.

Please see award and link below:

I-Invest ETF Awards

http://www.i-investintl.com/2016-accuvest-global-advisors-

 

 

Charts to Watch – Global Market Update – November 20, 2015

Please use the link below to access this week’s update on global financial conditions, fixed income markets, world equities, economic data, major currencies, and commodities.  Feel free to contact us with any questions or requests.

Charts to Watch – Global Market Update – Nov 20 2015

Best regards,

James

Disclosure: The opinions expressed in this Weekly Chart Book report are those of the author. The materials and commentary are strictly informational and should be used for research use only. This bulletin is not intended to provide investing or other advice or guidance with respect to the matters addressed in the bulletin. All relevant facts, including individual circumstances, need to be considered by the reader to arrive at investment conclusions that comply with matters addressed in this bulletin. Charts and information used in this report are sourced from Bloomberg

Europe Pt. 2: The Smart Beta Portfolio

In our last post we discussed the attractiveness of European equities in aggregate, and assessed the pros and cons of implementing this regional investment theme with a market capitalization weighted ETF (VGK – Vanguard). It was our conclusion that the most effective way to gain exposure to the expected advance in European equities was through a multi-factor “smart beta” portfolio. This intelligently constructed portfolio would dismiss market capitalizations (company and country size) and instead focus on systematically weighting developed European countries based upon country level fundamentals, momentum, risk, and valuations. This balanced, repeatable, multi-factor process exposes investors to some of the primary drivers of equity market returns – strong fundamentals, positive momentum, low risk, attractive valuations, and consequently, the size effect.

europt2.1

Entering April 2014, our overall assessment of Europe in aggregate was positive. However, with more than 70% of Developed Europe ETF assets allocated to only 4 countries, we set out to build a better portfolio and improve the implementation of this investment theme for our clients. Our research supports a balanced investment process that incorporates data from more than 40 indicators spread over 4 factor “buckets”. While a value focused investor may prefer Austria, and a momentum focused investor may prefer Italy, our research suggests integrating value and momentum, as well as fundamentals and risk, into the portfolio construction process. This data driven and disciplined investment process reveals that every country in Europe is different and the attractiveness of each country changes over time. Of course, there are some macro level factors, or systematic risks, that do impact all countries in Europe, but as those systematic risks dissipate the dispersion in country returns should increase and country selection should become the key to exploiting attractive risk adjusted returns from the region. As of April 2014, the attractiveness of France is very different from that of Spain, and the attractiveness of Switzerland is very different from that of Sweden. These variations between attractiveness and market capitalization are at the heart of the “smart beta” vs. market capitalization discussion.

europt2.2

From a multi-factor perspective, the most attractive countries in Europe include Germany, Spain, Sweden, Italy, and Denmark. After “x-raying” the VGK ETF and looking down into the underlying holdings, we found that only 29.3% of its assets are allocated to these five “most attractive” European countries. Conversely, our analysis suggests that Switzerland, Ireland, and France are the least attractive countries in the region, and these three countries command 29.7% of the VGK assets. Accordingly, we continue to advocate using portfolios that concentrate on allocating capital to the most attractive countries (on a multi-factor scale) rather than an index based portfolio that allocates capital based upon size and market capitalization.

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Disclosures: The opinions expressed in this report are those of the author. The materials and commentary are strictly informational and should be used for research use only. This brochure should not be construed as advertising material. The opinions expressed are not intended to provide investing or other advice or guidance with respect to the matters addressed in this brochure. All relevant facts, including individual circumstances, need to be considered by the reader to arrive at investment conclusions to comply with matters addressed in this brochure. Past performance is not indicative of future results. Remember that investing involves risks, as the value of your investment will fluctuate over time and you may gain or lose money. Investment risks are born solely by the investor and not by AGA. AGA is an independent investment advisor registered with the SEC. All disclosures, marketing brochures, and supplemental firm sheets are available upon request.

Charts and information used in this report are sourced from Accuvest Global Advisors. Commentary marked by “*” are sourced from Vanguard, Bloomberg, and Accuvest, respectively.

Our Q2 Big Picture View

It is important to note some broad highlights as we move into the Second Quarter of 2013; a) Growth in Europe has disappointed and the Euro Area remains in its second recession in five years; b) the most dramatic recent market development has been the sharp depreciation of the yen in the face of the new administration’s insistence on much more stimulative monetary policy; c) Chinese policy makers made modest tightening moves intended to take some steam out of the property markets and credit growth.  Neutral policy and relatively stable growth with inflation around 3% means China will stay an engine of growth.

These 2nd quarter highlights and more are discussed in our in-depth review of the last quarter and thoughts for moving forward through into 2013.

PDF image 2nd Quarter Big Picture View