A lot has happened in the markets in the first half of 2017. Now, as we enter the second half of the year, we asked two ETF strategists what pockets of the market they like, and what assets they are exiting—all through an ETF lens.
Their best ideas are as diverse as the opportunity set in the ETF market today. Here’s what they had to say.
Deborah Frame, President & Chief Investment Officer, Canada-based Frame Global Asset Management:
Looking to the second half of 2017, we’ve shifted more of our asset allocation to Europe with the iShares Core MSCI Europe ETF (IEUR), away from U.S. equities. In the fixed-income space, we’ve shifted from short to longer-duration Treasuries, adding the iShares 20+ Year Treasury Bond ETF (TLT).
We rebalanced the portfolio models in June to reflect our continued “Stagnation Outlook.” Across all models, we eliminated exposure to U.S. small-cap equity. We maintained the Canadian and European Equity exposure as well as the long-term U.S. Treasury bond.
As a result of a lack of evidence of inflation in the U.S., financial conditions appear more accommodative since late last year, in spite of the Fed hikes. Our shift in the direction of long bonds is a reflection of our view that this will not be reversing in the near term.
