Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Neutral Outlook Is AppropriateMarket dynamics have deteriorated and we are cautious yet neutral overall.
Deteriorating Market Dynamics. Small-caps continue to underperform, growth is outperforming vs. value, cyclical value (Energy, Materials, Industrials, Financials) is underperforming defensives (Utilities, Staples, REITs, Health Care), U.S. (IWV) is outperforming foreign equities (ACWX) as the US dollar strengthens, high yield spreads are widening, the 10-year Treasury yield is below 1.40-1.45%, and breadth is weak. These are all reasons for a more cautious and neutral outlook. We recommend large-caps over small-caps, growth over value, defensives over cyclical value, and U.S. over foreign... see pages 2-3.
Sector Weighting Changes. We are upgrading Technology, Health Care, Staples, and Utilities to market weight, and we are downgrading Energy, Financials, Materials, and Industrials to market weight... see Sector comments on pages 4-9.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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