Quantitative Analysis Service, Inc.

ETF Strategist - Kiwis, Mortgages and Russian Bears.
By: Steve Malinsky | 06 Mar 2015

Kiwis, Mortgages and Russian Bears.

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Global investing is like an adventure around the world: there is so much that can be learned. Different cultures, political regimes, economies, and most importantly, the people who drive those economies altogether make up the scope of our global investment interests.

There are no hard rules. There is one goal – making money on your investment. Following geo-political and economic news in different regions and countries become very important in this process. Understanding details like the differences in industrial sectors from country to country, and how businesses in emerging markets make money vs. their counterparts in developed countries is also very important.

The amount of information to be covered is enormous. Where is the best investment opportunity today: an internet stock in China, agricultural stock in Brazil or banking stock in Austria? The list goes on and on, expanding into different asset classes, regions, industrial sectors and more.

To be as effective as possible in this process, one would need a systematic approach. For example, if you have a one year investment horizon and you are looking to build a well-diversified globalexposure, where do you start?

Choosing an appropriate investment instrument is important in global investing. There are definitely many advantages in choosing index-based ETFs: from the convenience to do a macro analysis quickly to eliminating an individual security’s risks, along with great flexibility of the trade execution. The new trend is that a global investor becomes an ETF strategist.

Many ETF strategists use multiple sources of analysis to prepare their investment recommendation.

QAS has created an online tool to help ETF strategists do their job in identifying global opportunities. We deliver our quant-score driven opinion in a very comprehensive format. 

Our analysis is simple. The price cycle is subdivided into Seven Zones that carry specific risk and reward characteristics. Specifically, Zone 1 is low risk, high reward, while Zone 7 is high risk, low reward.

Following our example of a one year time horizon, we want to find those investments which recently switched from the worst Zone #7 and entered Zone #3, a zone that represents an early stabilization period.  It is a zone which is, according to QAS methodology, typically accompanied with low prices, but at the same time is signaling some major improvement.

As of February 27 a specific search based on the criteria above returned at least 10 names. Among others we identified an interesting mix of investments: ENZL, REM and RSXJ. All three satisfied our criteria of a long term investment that is showing improvement and could potentially deliver a high investment return within a one year period.

It’s an unusual but interesting mix because it is truly global and diversified by region, sector and market segment:  New Zealand Large Cap, US Mortgage REITs and Russian Small Cap.

            ENZL - iShares MSCI New Zealand Capped ETF®

REM - iShares Mortgage Real Estate Capped ETF®

RSXJ - Market Vectors® Russia Small-Cap ETF®

We believe that the QAS ETF Strategist search engine can be a good starting point for any global investment strategy research. Our quant-score-based Zone information is updated daily and available to our institutional clients as early as at 5:30 PM.

Try QAS ETF Strategist tool for yourself , or to find out more information about global ETF strategy analysis contact QAS at:




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ETF Strategist - Kiwis, Mortgages and Russian Bears.
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