ewm weekly update 52314 - endowmentwm.com · the barclays us aggregate bond index is a market...

Talking Points

• Among equities, large‐caps underperformed small‐caps, and growth stocks outperformed value‐oriented issues. Domestic stocks outperformed international equities. Developed markets underperformed emerging market stocks.

• Treasury prices fell modestly this week. The yield on the 10‐year T‐note was marginally higher.

• Commodity prices advanced on the week. Energy and metals climbed, but grains fell.

• The dollar was higher this week against a basket of currencies.

• Among economic data released this week, new home sales rose more than expected in April; existing‐home sales were in line with expectations; Germany’s gross domestic product (GDP) grew 0.8% in the first quarter, meeting forecasts; and initial jobless claims rose more than forecast in the latest week.

Weekly Highlights

• Domestic stock prices were strong this week. Equities marched higher on the week, with solid news on the housing front among the factors propelling the S&P 500 to near a record high. Home sales were spurred by a recent decline in mortgage rates. Small cap stocks also benefited from the overall market’s more positive tone this week after having declined almost 10% from their recent highs.

• Global markets were also mostly higher on the week.World markets advanced on better‐than‐expected manufacturing news from China, as well as an uptick in home sales in the U.S. European stocks posted their sixth consecutive weekly advance amid strong consumer confidence data in the region. Emerging markets stocks also climbed for the fourth straight week on expectations India’s new prime minister will spur growth.

• Treasury prices were lower for the week. The yield on the benchmark 10‐year U.S. Treasury rose modestly on the week, partly as a result of stronger economic data.

• Commodity indices gained ground on the week. Energy and industrial metals rose, but grains were weak.

Chart of the Week

May 23, 2014Weekly ReviewMay 23, 2014

Endowment Wealth ManagementWeekly Market Review‐May‐23‐2014

2

MARKET DASHBOARD

L

S

Source: B loomberg

YTD

Value Growth

2.59% 2.50% 2.43%

5.42% 3.41% 1.65%

‐4.92%‐3.48%‐1.99%

One Week

Value Growth

1.41% 1.83% 2.25%

0.91% 1.16% 1.41%

0.83% 1.17% 1.47%

% Wgt in

S&P 500

Week %

Chg. YTD % Chg.

Consumer Discretionary 12.0 1.94% ‐2.9%

Consumer Staples 9.7 0.00% 2.6%

Energy 10.5 0.85% 5.4%

Financials 16.0 1.17% 0.4%

Health Care 13.3 1.45% 6.1%

Industrials 10.7 0.74% 1.8%

Information Technology 18.8 2.02% 4.0%

Materials 3.5 1.31% 4.8%

Telecom Services 2.5 ‐1.45% 2.3%

Utilities 3.0 ‐0.70% 9.5%

Source: Bloomberg

Sector Performance: S&P/GICS Sectors

Last Price Change % Chg. YTD % Last Price Change % Chg. YTD %

S&P 500 1,900.53 21.46 1.14% 2.8% Russell Global EM 3,221.53 34.51 1.08% 3.7%

Dow Industrials 16,606.27 106.74 0.65% 0.1% 10‐Year US Treas. 2.54 2 bps NM NM

Nasdaq 4,185.81 87.32 2.13% 0.0% DJ UBS Comm. Idx. 135.71 0.44 0.33% 7.9%

Russell 2000 1,126.18 20.20 1.83% ‐3.5% Gold $1,292.72 ‐$1.51 ‐0.12% 7.5%

Euro Stoxx Index 341.76 2.77 0.82% 4.1% Crude Oil $104.38 $2.80 2.76% 8.2%

Shanghai Composite 2,034.57 8.07 0.40% ‐3.8% Dollar Index 80.37 0.31 0.39% 0.4%

Russell Global 1,733.71 15.96 0.93% 2.3% VIX Index 11.37 ‐0.87 ‐6.99% ‐15.7%Source: B loomberg; Index % change is based on price.

Tel. (920) 785‐6010 www.EndowmentWM.com Fax. (920) 227‐0521


3

A Macro View – Churning

It was another week in marketland characterized by churning but little else. Several major retailers including Target and Home Depot reported less than stellar earnings, as Walmart had earlier, and then proceeded to blame such weakness on the weather. We will see soon whether the weather was indeed the culprit, but such results only underscore that rather weak economic growth evidenced early in 2014.

Nonetheless, markets have held up, and aside from a brief spike in volatility late last week, trading has been decidedly range bound. The release of the Federal Reserve meeting minutes did not fundamentally alter the picture of gradual tapering of the Fed’s quantitative easing and bond buying program combined with highly accommodative interest rates. In fact, Reuters(among other new outlets) reported that in private (or not so private as the case may be) conversations, former Fed chair Ben Bernanke has been speculating that interest rates on the 10‐year Treasury may not see 4% again in his lifetime.

Meanwhile, in Europe, European Central Bank head Mario Draghi has made it clear that the challenge of deflation in the Eurozone will necessitate the ECB to undertake its own stimulus program, which means that the world is not about to see much of a liquidity challenge even as the Fed becomes slightly less active.

One of the most consequential market developments has little directly to do with markets, namely the stunning and sweeping victory of India’s Narendra Modi and his BJP party on a platform of economic reform. Most assumptions of future global economic growth assume an India that has been sputtering, but if the new government with its powerful mandate succeeds in unlocking the immense potential of India, those economic assumptions will prove to have significantly underestimated the future. One never knows, of course, but it is certainly possible that India could have the same transformative – and unexpected – effect on the global system in the decade to come that China has had in the decade past. Something to ponder, and watch carefully, as the year progresses.



4

THIS WEEK IN THE ECONOMY AND MARKETS



EUROZONE

5

Last Change % Chg. YTD % Last Change % Chg. YTD %

Germany 10‐Yr. Govt. 1.41 0 bps NM NM France 10‐Yr. Govt. 1.82 ‐3 bps NM NM

Greece 10‐Yr. Govt. 6.43 22 bps NM NM Ireland 10‐Yr. Govt. 2.76 ‐9 bps NM NM

Italy 10‐Yr. Govt. 3.15 ‐8 bps NM NM Portugal 10‐Yr. Govt. 3.75 ‐2 bps NM NM

Spain 10‐Yr. Govt. 2.98 ‐3 bps NM NM Netherlands 10‐Yr. Govt. 1.69 ‐4 bps NM NM

Belgium 10‐Yr. Govt. 1.97 ‐4 bps NM NM U.K. 10‐Yr. Govt. 2.63 ‐6 bps NM NM

Source: Bloomberg

SELECTED EUROPEAN SOVEREIGN YIELD PERFORMANCE



EQUITIES

6


S&P 500 1,900.53 21.46 1.14% 2.76% Swiss Market Index 8,703.84 20.22 0.23% 6.11%

Dow Industrials 16,606.27 106.74 0.65% 0.13% CAC 40 Index (France) 4,493.15 36.87 0.83% 4.59%

Nasdaq Composite 4,185.81 87.32 2.13% 0.03% DAX Index (Germany) 9,768.01 138.91 1.44% 2.26%

Russell Global 1,733.71 15.96 0.93% 2.3% Irish Overall Index 4,836.38 182.29 3.92% 6.54%

Russell Global EM 3,221.53 34.51 1.08% 3.7% Nikkei 225 14,462.17 365.58 2.59% ‐11.23%

S&P/TSX (Canada) 14,705.99 177.55 1.22% 7.86% Hang Seng Index 22,965.86 252.95 1.11% ‐1.46%

Mexico IPC 41,917.17 ‐48.19 ‐0.12% ‐2.05% Shanghai Composite 2,034.57 8.07 0.40% ‐3.85%

Brazil Bovespa 52,626.41 ‐1243.47 ‐2.30% 2.38% Kospi Index (S. Korea) 2,017.17 3.73 0.19% 0.29%

Euro Stoxx 600 341.76 2.77 0.82% 4.11% Taiwan Taiex Index 9,008.22 119.77 1.35% 4.61%

FTSE 100 6,815.75 ‐40.06 ‐0.58% 0.99% Tel Aviv 25 Index 1,389.31 11.04 0.80% 4.51%

IBEX 35 (Spain) 10,558.90 80.20 0.77% 6.48% MICEX Index (Russia) 1,438.98 46.68 3.35% ‐4.33%Source: B loomberg; Index % change is based on price.

WORLD MARKET PERFORMANCE



EQUITIES – EMERGING AND FRONTIER MARKETS

7


Mexico IPC 41,912.21 ‐48.19 ‐0.1% ‐2.1% Hang Seng Index 22,965.86 252.95 1.1% ‐1.5%

Brazil (Bovespa Index) 52,608.21 ‐1243.47 ‐2.3% 2.4% India (Sensex 30) 24,693.35 571.61 2.4% 16.6%

MICEX Index (Russia) 1,438.98 46.68 3.4% ‐4.3% Malaysia (KLCI Index) 1,869.22 ‐14.12 ‐0.7% 0.1%

Czech Republic (Prague) 997.52 11.06 1.1% 0.9% Singapore (Straits Times Index) 3,278.02 15.43 0.5% 3.5%

Turkey (Istanbul) 78,060.64 3051.33 4.1% 15.1% Thailand (SET Index) 1,396.84 ‐8.42 ‐0.6% 7.6%

Egypt (Hermes Index) 864.58 14.93 1.8% 28.0% Indonesia (Jakarta) 4,973.06 ‐58.51 ‐1.2% 16.4%

Kenya (Nairobi 20 Index) 4,925.58 ‐41.99 ‐0.8% 0.0% Pakistan (Karachi KSE 100) 28,756.00 ‐127.33 ‐0.4% 13.8%

Saudi Arabia (TASI Index) 9,750.90 ‐56.47 ‐0.6% 14.2% Vietnam (Ho Chi Minh) 541.49 12.00 2.3% 7.3%

Lebanon (Beirut BLOM Index) 1,200.40 0.31 0.0% 4.4% Sri Lanka (Colombo) 6,280.31 ‐34.88 ‐0.6% 6.2%

Palestine 506.17 ‐11.04 ‐2.1% ‐6.5% Cambodia (Laos) 1,304.44 23.20 1.8% 4.1%Source: Bloomberg; Index % change is based on price.

EMERGING AND FRONTIER MARKET PERFORMANCE



INTEREST RATES

YIELD CURVES

8


2‐Yr. U.S. Treasury 0.34% 0 bps NM NM Prime Rate 3.25% 0.00 NM NM

5‐Yr. U.S. Treasury 1.53% ‐2 bps NM NM Fed Funds Rate 0.25% 0.00 NM NM

10‐Yr. U.S. Treasury 2.54% 2 bps NM NM Discount Rate 0.75% 0.00 NM NM

30‐Yr. U.S. Treasury 3.40% 5 bps NM NM LIBOR (3 Mo.) 0.23% 0 bps NM NM

German 10‐Yr. Govt. 1.41% 0 bps NM NM Bond Buyer 40 Muni 4.06% ‐28 bps NM NM

France 10‐Yr. 1.82% ‐3 bps NM NM Bond Buyer 40 G.O. 4.28% NA NM NM

Italy 10‐Yr. 3.15% ‐8 bps NM NM Bond Buyer 40 Rev. 4.81% NA NM NM

Fed 5‐Yr Fwd BE Inf. 2.41% ‐2 bps NM NM

Source: Bloomberg

SELECTED INTEREST RATES

1M 1Y 3Y 5Y 8Y 10Y 15Y 20Y 30Y0.00

1.00

2.00

3.00

4.00

5.00

6.00

US Treasury Actives Curve 20140516

US Treasury Actives Curve 20140523

USD US Industrial (BB) BFV Cur 20140523

USD Composite (BBB) BFV Curve 20140523

Source: Bloomberg



CURRENCIES

9


Dollar Index 80.37 0.315 0.39% 0.40% Chinese Yuan 6.24 0.003 ‐0.04% ‐2.92%

Euro 1.36 ‐0.006 ‐0.45% ‐0.81% Swiss Franc 0.90 0.003 ‐0.31% ‐0.29%

Japanese Yen 101.97 0.420 ‐0.41% 3.33% New Zealand Dollar 0.85 ‐0.008 ‐0.93% 4.05%

British Pound 1.68 0.002 0.11% 1.65% Brazilian Real 2.22 0.009 ‐0.41% 6.21%

Canadian Dollar 1.09 0.001 ‐0.06% ‐2.25% Mexican Peso 12.85 ‐0.032 0.25% 1.29%

SELECTED CURRENCY PERFORMANCE

Source: Bloomberg



COMMODITIES

10


DJ UBS Comm. Idx. 135.71 0.44 0.33% 7.89% Platinum Spot $1,473.19 $8.31 0.57% 7.46%

Rogers Int. Comm. Idx. 3737.98 9.12 0.24% 5.12% Corn 478.00 ‐6.25 ‐1.29% 9.21%

Crude Oil $104.33 $2.80 2.76% 8.22% Wheat 652.50 ‐21.75 ‐3.23% 5.80%

Natural Gas $4.40 ‐$0.02 ‐0.45% 6.78% Soybeans 1,515.50 52.25 3.57% 19.99%

Gasoline ($/Gal.) $3.66 $0.01 0.25% 10.02% Sugar 17.37 0.00 0.00% 3.83%

Heating Oil 295.76 0.02 0.01% ‐2.34% Orange Juice 158.40 3.60 2.32% 11.64%

Gold Spot $1,293.18 ‐$1.51 ‐0.12% 7.52% Aluminum 1,796.00 26.50 1.50% ‐0.24%

Silver Spot $19.44 $0.03 0.17% ‐0.35% Copper 6,875.00 15.00 0.22% ‐6.59%

Source: Bloomberg; % change is based on price.

SELECTED COMMODITY MARKET PERFORMANCE



ALTERNATIVE INVESTMENTS

11


HFRX Global Hedge Fund Index 1223.54 1.48 0.12% ‐0.05% HFRX Distressed Index 1040.16 2.30 0.22% 3.63%

HFRX Equity Market Neutral 961.15 3.35 0.35% 1.23% HFRX Merger Arbitrage Index 1576.84 ‐2.19 ‐0.14% 0.52%

HFRX Equity Hedge Index 1145.81 4.73 0.41% ‐1.54% HFRX Convertible Arbitrage Index 778.53 4.47 0.58% 0.39%

HFRX Event‐Driven Index 1603.40 ‐0.01 0.00% 1.92% HFRX Macro CTA Index 1111.27 ‐1.27 ‐0.11% ‐2.08%

HFRX Absolute Return Index 995.86 1.05 0.11% 0.83% IQ Fixed Income Beta Arb Index 1352.29 4.70 0.35% 4.13%

Source: Bloomberg; Index % change is based on price.

SELECTED ALTERNATIVE INVESTMENT INDEX PERFORMANCE



12

PORTFOLIO CONSTRUCTION



13

The Relative Strength Matrix provides an indication of how the various asset classes have performed relative to one another over the past 30 days. A number greater than 1.0 indicates that the asset class in the far left column has outperformed the corresponding asset class in the top row over the past 30 days. A number below 1.0 means the asset class on the left has underperformed the asset class at the top. The green shading indicates outperformance, and the red shading indicates underperformance.

Source: Bloomberg

3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8 5/15 5/22

Large Cap

(R200)1.32% ‐1.58% 1.37% ‐1.04% 2.02% ‐2.82% 1.77% 0.69% 0.38% ‐0.41% ‐0.24% 1.19%

Small Cap

(R2000)1.40% ‐2.31% 1.89% ‐3.96% 2.58% ‐4.53% 0.91% 0.57% ‐1.61% ‐2.54% ‐0.13% 1.63%

MSCI EAFE 0.88% ‐2.62% ‐1.35% 1.55% 1.66% ‐0.23% ‐0.30% 0.69% 0.84% 0.06% ‐0.36% ‐0.16%

MSCI Em.

Mkts.0.73% ‐2.79% ‐0.26% 3.68% 2.55% 2.16% ‐1.23% ‐0.47% ‐0.84% 1.29% 2.01% 1.17%

BarCap Agg.

(AGG)‐0.52% 0.19% ‐0.50% 0.58% ‐0.57% 0.83% ‐0.13% 0.17% 0.17% 0.22% 0.49% ‐0.18%

High Yield

(JNK)‐0.51% ‐0.41% 0.27% 0.15% ‐0.17% 0.12% 0.05% 0.10% ‐0.19% 0.15% 0.32% 0.05%

DJ UBS Index 2.57% ‐1.60% ‐0.98% 1.00% ‐0.24% 2.01% 0.51% 0.34% ‐1.36% 0.00% ‐0.36% ‐0.14%

Hedge Funds

(HFRX Global)0.32% ‐0.70% 0.08% ‐0.28% 0.70% ‐0.85% ‐0.16% 0.40% ‐0.26% ‐0.37% ‐0.25% 0.11%

60/40* 0.50% ‐1.19% 0.22% ‐0.08% 1.03% ‐0.93% 0.47% 0.41% 0.09% ‐0.22% 0.15% 0.49%

48/32/20

(w/Alts.)**0.46% ‐1.09% 0.19% ‐0.12% 0.96% ‐0.91% 0.35% 0.41% 0.02% ‐0.25% 0.07% 0.41%

Source: Bloomberg; *60/40 portfolio = 30% Large Cap/10% Small Cap/15% EAFE/5% Emerging Markets/35% BarCap Agg./5% High Yield.

**48/32/20 portfolio = 24% Large Cap/8% Small Cap/12% EAFE/4% Emerging Markets/28% BarCap Agg./4% High Yield/20% HFRX Global Index.

WEEKLY ASSET CLASS PERFORMANCE (Prior 12 weeks ending Thursday)

Alternatives

Asset Allocation

Domestic

Equity

Int'l.

Equity

Fixed Income

Commodities

Equity

Large Cap

Core

Large Cap

Growth

Large Cap

Value

Mid Cap

Core

Mid Cap

Growth

Mid Cap

Value

Small Cap

Core

Small Cap

Growth

Small Cap

Value

Int'l.

Developed

Emerging

Markets REITs Comm. Int. Bond High Yield

Large Cap Core 1.00 1.00 1.00 1.06 1.07 1.03 1.19 1.20 1.17 1.04 0.87 0.94 1.07 0.91 1.00

Large Cap Growth 1.00 1.00 1.00 1.05 1.07 1.03 1.19 1.20 1.17 1.03 0.86 0.93 1.06 0.91 0.99

Large Cap Value 1.00 1.00 1.00 1.05 1.07 1.03 1.19 1.20 1.17 1.03 0.86 0.93 1.06 0.91 0.99

Mid Cap Core 0.95 0.95 0.95 1.00 1.02 0.98 1.13 1.14 1.11 0.98 0.82 0.89 1.01 0.86 0.94

Mid Cap Growth 0.93 0.93 0.93 0.98 1.00 0.96 1.11 1.12 1.09 0.96 0.81 0.87 0.99 0.85 0.93

Mid Cap Value 0.97 0.97 0.97 1.02 1.04 1.00 1.15 1.16 1.13 1.00 0.84 0.91 1.03 0.88 0.96

Small Cap Core 0.84 0.84 0.84 0.89 0.90 0.87 1.00 1.01 0.98 0.87 0.73 0.79 0.90 0.77 0.84

Small Cap Growth 0.83 0.83 0.83 0.88 0.89 0.86 0.99 1.00 0.97 0.86 0.72 0.78 0.89 0.76 0.83

Small Cap Value 0.85 0.86 0.86 0.90 0.92 0.88 1.02 1.03 1.00 0.88 0.74 0.80 0.91 0.78 0.85

Int'l . Developed 0.97 0.97 0.97 1.02 1.04 1.00 1.15 1.16 1.13 1.00 0.84 0.90 1.03 0.88 0.96

Emerging Markets 1.16 1.16 1.16 1.22 1.24 1.19 1.38 1.39 1.35 1.20 1.00 1.08 1.23 1.05 1.15

REITs 1.07 1.07 1.07 1.13 1.15 1.10 1.27 1.29 1.25 1.11 0.92 1.00 1.14 0.97 1.06

Commodities 0.94 0.94 0.94 0.99 1.01 0.97 1.12 1.13 1.10 0.97 0.81 0.88 1.00 0.85 0.93

Int. Bond 1.10 1.10 1.10 1.16 1.18 1.13 1.31 1.32 1.29 1.14 0.95 1.03 1.17 1.00 1.09

High Yield 1.00 1.01 1.01 1.06 1.08 1.04 1.20 1.21 1.18 1.04 0.87 0.94 1.07 0.91 1.00

RELATIVE STRENGTH MATRIX (BASED ON 30‐DAY RSI)



INDEX OVERVIEW The S&P 500 Index is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. The S&P/Case‐Shiller Home Price Indices measure the residential housing market, tracking changes in the value of the residential real estatemarket in 20 metropolitan regions across the United States. The MSCI EAFE Index represents 21 developed markets outside of North America. The MSCI EAFE Growth Index is an unmanaged index considered representative of growth stocks of Europe, Australasia and the Far East. The MSCI EAFE Value Index is an unmanaged index considered representative of value stocks of Europe, Australasia and the Far East. The MSCI EmergingMarkets Index is a free float‐adjusted market capitalization index that is designed to measure equity market performance in the global emergingmarkets. The MSCI Europe Index is an unmanaged index considered representative of stocks of developed European countries. The Barclays US Credit Index is an unmanaged index considered representative of publicly issued, SEC‐registered US corporate and specified foreign debentures and secured notes. The Barclays US Aggregate Bond Index is a market capitalization‐weighted index of investment‐grade, fixed‐rate debt issues, including government, corporate, asset‐backed, and mortgage‐backed securities, with maturities of at least one year. The Barclays US CorporateHigh Yield Index covers the USD‐denominated, non‐investment grade, fixed‐rate, taxable corporate bond market. Securities are classified as high‐yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. The index may include emerging market debt. The Barclays Capital Municipal Bond Index is an unmanaged index comprised of investment‐grade, fixed‐rate municipal securities representative of the tax‐exempt bond market in general. The Barclays US Treasury Total Return Index is an unmanaged index of public obligations of the US Treasury with aremaining maturity of one year or more. The Citigroup World Government Bond Index is a market capitalization weighted bond index consisting of the government bond markets of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. The DJ‐UBS Commodity Index Total ReturnSM measures the collateralized returns from a basket of 19 commodity futures contracts representing the energy,precious metals, industrial metals, grains, softs and livestock sectors. The Russell 1000 Index is a market capitalization‐weighted benchmark index made up of the 1000 largest U.S. companies in the Russell 3000 Index. The Russell 1000 Growth Index is an unmanaged index consideredrepresentative of large‐cap growth stocks. The Russell 1000 Value Index is an unmanaged index considered representative of large‐cap value stocks. The Russell 2000 Index is an unmanaged index considered representative of small‐cap stocks. The Russell 2000 Growth Index is an unmanaged index considered representative of small‐cap growth stocks. The Russell 2000 Growth Index is an unmanaged index considered representative of small‐cap value stocks. The Russell 3000 Index is an unmanaged index considered representative of the US stock market. TheRussell Midcap Index is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap Growth Index is an unmanaged index considered representative of mid‐cap growth stocks. The Russell Midcap Value Index is an unmanaged index considered representative of mid‐cap value stocks. The HFRX Indices are a series of benchmarks of hedge fund industry performance which are engineered to achieve representative performance of a larger universe of hedge fund strategies. Hedge Fund Research, Inc. employs the HFRX Methodology (UCITS compliant), a proprietary and highly quantitative process by whichhedge funds are selected as constituents for the HFRX Indices. The Consumer Price Index (CPI) measures the change in the cost of a fixed basket ofproducts and services. The Gross Domestic Product (GDP) rate is a measurement of the output of goods and services produced by labor and property located in the United States. The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this weekly review is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance overany period of time. An investor may experience loss of principal. Investment decisions should always be made based on the investor’s specific financial needs and objectives, goals, time horizon, and risk tolerance. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment advisor to determine the appropriate investment strategy. Past performance is not indicative of future results. Information obtained from third party sources are believed to be reliable but not guaranteed. Endowment Wealth Management makes no representation regarding the accuracy or completeness of information provided herein. All opinions and views constitute our judgments as of thedate of writing and are subject to change at any time without notice. Investments in smaller companies carry greater risk than is customarily associated with larger companies for various reasons such as volatility of earnings and prospects, higher failure rates, and limited markets, product lines or financial resources. Investing overseas involves special risks, including the volatility of currency exchange rates and, in some cases, limited geographic focus, political and economic instability, and relativelyilliquid markets. Income (bond) securities are subject to interest rate risk, which is the risk that debt securities in a portfolio will decline in value because of increases in market interest rates. Exchange Traded Funds (ETFs) are subject to risks similar to those of stocks, such as market risk. Investing in ETFs may bear indirect fees and expenses charged by ETFs in addition to its direct fees and expenses, as well as indirectly bearing the principal risks of those ETFs. ETFs may trade at a discount to their net asset value and are subject to the market fluctuations of their underlying investments. Investing in commodities can be volatile and can suffer from periods of prolonged decline in value and may not be suitable for all investors. Index Performance is presented for illustrative purposes only and does not represent the performance of any specific investment product or portfolio. An investment cannot be made directly into an index.

14Tel. (920) 785‐6010 www.EndowmentWM.com Fax. (920) 227‐0521


Alternative Investments may have complex terms and features that are not easily understood and are not suitable for all investors. You should conduct your own due diligence to ensure you understand the features of the product before investing. Alternative investment strategies may employ a variety of hedging techniques and non‐traditional instruments such as inverse and leveraged products. Certain hedging techniques include matched combinations that neutralize or offset individual risks such as merger arbitrage, long/short equity, convertible bond arbitrage and fixed‐income arbitrage. Leveraged products are those that employ financial derivatives and debt to try to achieve a multiple (for example two or three times) of the return or inverse return of a stated index or benchmark over the course of a single day. Inverse products utilize short selling, derivatives trading, and other leveraged investment techniques, such as futures trading to achieve their objectives, mainly to track the inverse of their benchmarks. As with all investments, there is no assurance that any investment strategies will achieve their objectives or protect against losses. Neither Endowment Wealth Management nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor. Copyright Endowment Wealth Management, Inc. All rights reserved

ABOUT Endowment Wealth Management, Inc. We are a Multi-Client Family Office whose sole mission is to provide wealth sustainability for individuals, families, retirement plans and institutions through the utilization of the Endowment Investment Philosophy. We manage our client’s financial wealth to enhance the human capital of their future generations. We work closely with our clients to develop an integrated long-term wealth plan that maximizes the benefit gained by integrating all of our individuals or families wealth producing assets. We are different from many other firms, in the way we build our portfolios on behalf of our clients. For more information on Endowment Wealth Management, Inc., please call (920) 785‐6010 and/or visit www.EndowmentWM.com.

15Tel. (920) 785‐6010 www.EndowmentWM.com Fax. (920) 227‐0521

ewm weekly update 52314 - endowmentwm.com · the barclays us aggregate bond index is a market...

Documents