Wednesday ChartwellETF.com and Chartwell Partners Wealth Management released an executive summary of a white paper; Global Sector ETF Investing at the World Money Show in Orlando.
The white paper focuses on the S&P Global 1200 index and the ten global sectors it breaks down into, all available through exchange-traded funds, which offer investors and advisors a transparent, liquid, flexible and low cost approach to building a global portfolio.
Here are a few of the white paper's conclusions.
As economies and companies around the world become more interdependent, investors and advisors need to adapt their strategies to add value and increase the likelihood that they will outperform benchmarks. Where a company is domiciled is becoming less important, what industries and sectors it operates in is becoming more important.
Research shows that since the late 1990s, the importance of developed country factors as a factor in determining relative returns is declining and sector factors are increasing. For example, global sectors now account for roughly 40% of total global equity return dispersion, up from 15% in 1992.
A portfolio of the ten exchange-traded funds that track each global sector can be an effective tool to build a core global portfolio since it offers exposure to 70% of world equity markets. It is also a flexible strategy offering opportunities to rotate into global sectors with price momentum as well as undervalued sectors. Combining a global sector portfolio with stock picking - Chartwell's sector plus strategy - is also an option for investors and advisors.
The executive summary includes a profile of the ten global sector ETFs including their top ten holdings and weightings in the S&P Global 1200, sector performance over the past 90, 30 and 10 days, comparisons of the sector ETFs in terms of volatility, return and risk with other international ETFs, global sector exposure for single-country ETFs, plus some potential global sector investment strategies.
The ten global sector ETFs which are listed below have anywhere from 30% to 65% invested in U.S. companies:
iShares S&P Global Consumer Discretionary (NYSEARCA:RXI)
iShares S&P Global Consumer Staples (NYSEARCA:KXI)
iShares S&P Global Health Care (NYSEARCA:IXJ)
iShares S&P Global Energy (NYSEARCA:IXC)
iShares S&P Global Industrials (NYSEARCA:EXI)
iShares S&P Global Technology (NYSEARCA:IXN)
iShares S&P Global Telecommunications (NYSEARCA:IXP)
iShares S&P Global Utilities (NYSEARCA:JXI)
iShares S&P Global Materials (NYSEARCA:MXI)
iShares S&P Global Financials (NYSEARCA:IXG)