Boulder, CO (PRWEB) February 7, 2008
Today 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.
Though most global sectors contain a basket of more than 200 companies weighted by market value, performance can be volatile. One example was the information technology boom and subsequent bust in 2000. In 1998, the global information technology sector was up 69% and in 1999 it was up 94%. However, in 2000 it fell 40% while the global healthcare sector was up 31%.
The pullback in the global financial sector earlier this year is another case where an investor could outperform by underweighting this sector which accounts for 23% of the total index and overweighting more defensive global sectors such as global utilities or global healthcare. In the last ten days, investors reversed course by charging back into what it perceived as undervalued bank stocks while some defensive sectors pulled back.
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 (RXI)
iShares S&P Global Consumer Staples (KXI)
iShares S&P Global Health Care (IXJ)
iShares S&P Global Energy (IXC)
iShares S&P Global Industrials (EXI)
iShares S&P Global Technology (IXN)
iShares S&P Global Telecommunications (IXP)
iShares S&P Global Utilities (JXI)
iShares S&P Global Materials (MXI)
iShares S&P Global Financials (IXG)
ChartwellETF.com publishes the ETF advisory website and newsletter Chartwell ETF Advisor. Carl Delfeld, Managing Director of Chartwell Partners, manages a Global Sector ETF Rotation portfolio which over weights global sectors on both ends of the spectrum; sectors with momentum and those that are out of favor. Carl is Forbes Asia columnist, was a consultant to the U.S. Treasury and U.S. Representative to the Asian Development Bank, and is author of "Think Global, Grow Rich", "The New Global Investor" and "ETF Investing Around the World".
To request a copy of Global Sector ETF Investing and for media inquiries, contact Carl Delfeld at 719.264.1503 or at firstname.lastname@example.org.