This article is part of a regular series of thought leadership pieces from some of the more influential ETF strategists in the money management industry. Today's article is by Scott Kubie, chief strategist of Omaha, Nebraska-based CLS Investments.
Over the last two years, I’ve written 15 columns analyzing the ETF landscape and providing recommendations for ETF strategies. As we approach the turning of the calendar, it seems like the right time to revisit those ideas to see whether they worked out. More importantly, I’ve added a brief update on whether my recommendations still hold or my views have changed.
The articles have ranged from advocating sectors, regions, countries and factor ETFs. Of the 15 articles, seven produced positive results, four were negative (although the PowerShares QQQ (QQQ | A-64) article was more about index design), two were neutral and two were informational in nature.
I look forward to trying to match that record in the coming years.
Starting with the most recent article:
Sept. 24, 2015
Results: iShares U.S. Healthcare (IYH |A-95) lagged the Russell 3000 by 2.47%. (Positive)
Commentary: Price trends reversed and the potential for an interest rate hike weighed on the sector. On a relative basis, the move outperformed. Valuations and fundamental risk remain a challenge for health care. Continue to look elsewhere for value-added opportunities.
Aug. 24, 2015
Results: iShares MSCI India trailed iShares MSCI China (MCHI | B-20) by 5.95%. (Negative)
Commentary: India’s fundamentals remain positive. Reforms, while slower than desired, are real. India benefits from cheaper commodities, which should increase growth potential relative to inflation. Stick with India in the coming year.
June 3, 2015
Commentary: Japan continues to look favorable based on its reforms and valuations. Debt levels and demographics represent long-term challenges. Continue to modestly overweight Japan in global portfolios.
April 28, 2015
Results: The equal allocation to iShares MSCI EAFE Value (EFV | B-93) and PowerShares International BuyBack Achievers (IPKW | D-54) outperformed the iShares MSCI EAFE (EFA | A-93) 0.13%. (Neutral)
Commentary: EAFE Value lagged on concerns over global growth and a rotation toward growth sectors. International companies buying back their stock performed well. Continue to stick with the buyback story for international stocks. EAFE Value looks undervalued. Fundamentals lean the other way, so make sure portfolios don’t rely too heavily on stronger global growth.