Quantitative Analysis Service, Inc.

Summer 2016: Visualizing Unusual Rotation Inside All Asset Classes.
By: Steve Malinsky | 16 May 2016


Summer 2016: Visualizing Unusual Rotation Inside All Asset Classes.


“The World at a Glance”


It appears that the summer of 2016 is shaping up to be more challenging than the summer of 2015. According to our research, the individual segments of all asset classes are currently undergoing significant rotation. This phenomenon is clearly illustrated by the QAS ETF 100 HeatMap (Data as of 05/13/2016). This is one of the most popular features of the QAS ETF Strategist Online tool designed for a “high level” quick snapshot-analysis of 100 ETFs representing all asset classes and major segments within asset classes (equity sectors, equity broad-based, equity countries, commodities, fixed income, currencies).

For example, you can see that some equity sectors such as XLB, XLE, XLI, XLU, GDX (highlighted in green color) look a lot more attractive (lower risk – high upside potential) vs. XLV, XLF, SMH, XLK (highlighted in red and yellow colors), representing instruments with high risk – low upside potential.

We can also see that some country’s ETFs like China, Japan, Italy and Spain are currently highlighted as high risk equity segments to avoid.

There is an interesting situation inside commodities, where Gold, Silver and Softs formed a leadership group, while the Copper and Industrial Metals ETFs are lagging and showing a dangerous negative bias (yellow color).

While the fixed income section seems to be more uniform and currently presents a good investment opportunity across the board (treasury and investment grade corporate), the major currency ETFs show significant variation in market profile and risk configurations.

For example, FXE (Euro) ETF is presenting a better opportunity for investors (long strategy) vs. FXB (British Pound), which is currently showing high risk – low upside potential (long strategy).

The current wide spectrum of colors (risk levels) inside all asset classes represented in the QAS Top 100 ETF HeatMap is quite unusual. This means that investors are most likely revising their strategies and making adjustments to their portfolios, taking into consideration inter-market analysis and niche investment multi-asset opportunities going into the summer time. 

For more information about ETF Strategist Online / Top 100 ETF HeatMap please visit:

www.qas-service.com (institutional users only). 


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Summer 2016: Visualizing Unusual Rotation Inside All Asset Classes.
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