ETF Action: Research

8.9.2021

A brief overview of performance, flows, and highlights of the ETF All-Stars Thematic Indexes and the thematic landscape:

• Net outflows keep mounting for Evolving Consumer segment over the past week (-$67 million); $572 million net out over past three months
• Global X Lithium & Battery Tech ETF (LIT) tops category net inflows over past week with +$103 million
• Sustainability Index falls 3.95% over past month and is lone All-Stars Thematic Index down year-to-date (-7.97%)
• MicroStrategy Incorporated (MSTR-US) best performing All-Stars Thematic Composite holding over past month, up 19.6%

8.3.2021

A brief overview of performance, flows, and highlights of the ETF All-Stars Thematic Indexes and the thematic landscape:

• ETF All-Stars Industrial Revolution Index best performer in the month of July (+3.29%)
• Nearly $400 million in net outflows over past week; Sustainability only segment with net inflows over past 3 months (+$562 million)
• VanEck Vectors Rare Earth/Strategic Metals ETF by far best thematic ETF performer over past month, up 27%
• Top performing All-Stars Thematic Composite holding over past week? ON Semiconductor Corporation (ON-US +11.73%)
• Worst performing All-Stars Thematic Composite holding over past week? Sunnova Energy International Inc (NOVA-US -4.99%)

5.5.2021

Top 10 Online Retail Stocks

By and large online retailers have outperformed traditional brick and mortar retail over the last several years as technology adoption has increased, particularly amid the pandemic. Then came February 2021. Yes, the world was continuing to open up in February but we began to see the upward trend in yields which effectively compressed stretched valuation multiples on a number of tech focused strategies. Today we look at what those strategies look like and what companies they hold.

While there are only a few ETFs that cover the space, it is growing quickly in assets and may stand to benefit from the strong secular trend still. Hence, we explore the ETFs and the companies that make up ETF All-Stars Online Retail Select Top 10 List.

Let's begin by looking at the current Online Retail ETF landscape...keep in mind, we only are looking at ETFs that are globally focused and not country or region specific ETFs (ie: China consumer ETFs).

4.19.2021

Since the last rebalance in November, the U.S. Factor AIM Portfolio has returned 20.31%, outpacing the S&P 500 by nearly 300 basis points. The rebalance across all of the AIM portfolios in November was specific to positioning for a cyclical recovery which proved to be beneficial.  While we believe the cyclical recovery is still underway, this week's rebalance is focused specifically on three things:

1. Lowering the portfolio valuation multiple
2. Increasing value characteristics to stay aligned with ongoing cyclical recovery
3. Increased financials exposure and size tilt

4.14.2021

Top 10 Advanced Materials Stocks: A Great Place To Start Upstream

Over the last several weeks we have discussed the potential multi-trillion dollar infrastructure bill in the works in Washington and the impact that may have for investments in 5G/Connectivity and NextGen Transportation. The Biden administration has already come out and said it plans to jump start the electrification of America's roads by offering nationwide charging station infrastructure, tax incentives for electric vehicle buyers, and money to boost domestic supply of materials. That's exactly why this week we thought we would look further upstream from the NextGen Transportation segment into Advanced Materials.

While there are only a few ETFs that cover the space, it is growing quickly in assets and may stand to benefit from strong battery demand over the next decade and onward.  Hence, we explore the companies that make up ETF All-Stars® Advanced Materials Select Top 10 List.

4.12.2021

Short preview of this week's Monday Morning QB:

• Winners & Losers: Return to the New Normal?
• Follow the Flows: Are Themes the New Sectors?
• Thematic Spotlight: Exploring the Great Unknown (ARKX)
• Weekly Rant: "Never confuse genius with luck and a bull market." John C Bogle

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4.9.2021

This Week In ETFs
Week of April 5-9, 2021

• Latin America ETFs Continue to Rebound
• Energy Falters, XLE Close to Correction Territory
• Flows Remain Positive
• Chart of the Week: Strong Market Breadth

4.7.2021

What Kind Of Company Is Tesla?

How do you classify Tesla within a classification system? According to GICS classification, Tesla falls within the automobile industry in the consumer discretionary sector. But what else is it? Is it a clean energy company because it is the posterchild for creating a network of vehicles that reduces carbon emissions? Or is it a robotics & AI company because most of its production lines are automated…by robots?

Or is it an advanced materials company because it is exploring and developing new battery technologies? I could go on and on but the point here is that when it comes to thematic investing, classifying companies into specific buckets can be difficult.

This leads to the problem in thematic investing that we here at ETF Action call the Security Selection Paradox. Growth in thematic investing has been nothing short of explosive over the past several years and the Security Selection Paradox is the expectation that ETFs with similarly stated investment objectives that aim to capture the same narrow thematic segment will have a high overlap in common holdings. However, oftentimes this does not hold true across the thematic ETF landscape. This leaves investors with choices that don’t necessarily align with their true investment objective. Let’s explore…

4.5.2021

With an infrastructure bill front and center in Washington, the following changes will be made to the ETF Action U.S. Sector & Industry Active Index Model (AIM) Portfolio and the ETF Action Global Thematic AIM Portfolio. These changes will be made using closing prices as of April 8, 2021.

• Global Thematic AIM Portfolio: New position in Defiance Next Gen Connectivity ETF (FIVG)
  • Lowers portfolio valuation multiple; particularly in disruptive tech segment
  • Increases semiconductor exposure
  • Introduces new names not currently held in the portfolio

• U.S. Sector & Industry AIM Portfolio: New position in Global X U.S. Infrastructure Development ETF (PAVE)
  
  • Increased cyclical exposure from industrial and materials sectors
  • Above average tilt to mid and small-caps positioned well during current phase of recovery
  • PAVE adds new companies to portfolio exhibiting positive momentum

3.31.2021

Top 10 NextGen Transportation Stocks:
Infrastructure Part Deux

Last week we discussed the new administration's desire to pass a massive infrastructure bill with not only a focus on upgrading roads, bridges, and waterways, but also digital infrastructure and clean energy initiatives. That led to our highlighting of the 5G/Connectivity All-Star Select 10 stocks.

In the multi-trillion Dollar plan, details out this week show a $174 billion plan to jumpstart development and adoption of electric vehicles.  This includes incentives for building out a nationwide charging infrastructure, tax incentives for EV buyers, and money to boost domestic supply of materials needed and factory updates. Tesla has long been the posterchild for the electric vehicle revolution but a closer look at NextGen Transportation ETFs shows other companies that are also common among these strategies. That's why this week we felt it appropriate to highlight the ETF All-Stars® NextGen Transportation Select Top 10 List.