The World Country Top 4 Strategy is a momentum driven strategy that invests in the top four single country ETFs. It will add geographic diversity to your portfolio with significant non-U.S. equity exposure.

The strategy consists of four sub-strategies. Each sub-strategy invests in the best country ETF in a specific geographic area (i.e., Africa, Asia, Latin America, etc). These strategies are then combined to yield four country ETFs that come from different geographic segments, thus avoiding overconcentration. So even if one region is outperforming all the other areas, this strategy will still diversify among three additional top performing regions.

Like our other equity-based strategies, this strategy is hedged with a sub-strategy (HEDGE) that includes, amongst others, safe heaven assets like treasuries and gold.

Country ETFs:

- AFK Market Vectors Africa Index
- ASHR Deutsche X-Trackers CSI 300 China A Shares
- ECH iShares MSCI Chile Fund
- EGPT Market Vectors Egypt Index
- EIDO iShares MSCI Indonesia Index
- EIRL iShares MSCI Ireland Capped
- EIS iShares MSCI Israel
- ENZL iShares MSCI New Zealand Investable Market
- EPHE iShares MSCI Philippines
- EPI WisdomTree India Earnings Index
- EPOL iShares MSCI Poland Index
- EPU iShares MSCI Peru Index
- EWA iShares MSCI Australia Index Fund
- EWC iShares MSCI Canada Index Fund
- EWD iShares MSCI Sweden Index
- EWG iShares MSCI Germany Index
- EWH iShares MSCI Hong Kong Index Fund
- EWI iShares MSCI Italy Index
- EWJ iShares MSCI Japan Index Fund
- EWK iShares MSCI Belgium Index
- EWL iShares MSCI Switzerland
- EWM iShares MSCI Malaysia Index Fund
- EWN iShares MSCI Netherlands Index
- EWO iShares MSCI Austria Index
- EWP iShares MSCI Spain Index
- EWQ iShares MSCI France
- EWS iShares MSCI Singapore Index
- EWT iShares MSCI Taiwan Index Fund
- EWU iShares MSCI United Kingdom Index
- EWW iShares MSCI Mexico Index Fund
- EWY iShares MSCI South Korea Index Fund
- EWZ iShares MSCI Brazil Index Fund
- EZA iShares MSCI South Africa Index
- FM iShares MSCI Frontier Markets ETF
- FRN Guggenheim BNY Mellon Frontier Mkts
- FXI iShares FTSE China 25 Index Fund
- GAF SPDR S&P E.M. Middle East & Africa
- GULF WisdomTree Middle East Dividend Index
- GREK Global X FTSE Greece 20
- GXG Global X Interbolsa FTSE Colombia 20
- IDX Market Vectors Indonesia
- MCHI iShares MSCI China Index
- MES Market Vectors DJ Gulf States (GCC) Titans
- NORW Global X FTSE Norway 30 ETF
- QQQ PowerShares Nasdaq-100 Index
- RSX Market Vectors DAXglobal Russia
- THD iShares MSCI Thailand Index
- TUR iShares MSCI Turkey
- VNM Market Vectors Vietnam

'Total return, when measuring performance, is the actual rate of return of an investment or a pool of investments over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realized over a given period of time. Total return accounts for two categories of return: income including interest paid by fixed-income investments, distributions or dividends and capital appreciation, representing the change in the market price of an asset.'

Which means for our asset as example:- The total return over 5 years of World Top 4 Strategy is 44.4%, which is lower, thus worse compared to the benchmark ACWI (94.2%) in the same period.
- During the last 3 years, the total return, or increase in value is 21.8%, which is lower, thus worse than the value of 48.3% from the benchmark.

'The compound annual growth rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period.'

Which means for our asset as example:- The annual performance (CAGR) over 5 years of World Top 4 Strategy is 7.6%, which is lower, thus worse compared to the benchmark ACWI (14.2%) in the same period.
- During the last 3 years, the annual return (CAGR) is 6.8%, which is lower, thus worse than the value of 14% from the benchmark.

'Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security. In the securities markets, volatility is often associated with big swings in either direction. For example, when the stock market rises and falls more than one percent over a sustained period of time, it is called a 'volatile' market.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (17.9%) in the period of the last 5 years, the historical 30 days volatility of 8.2% of World Top 4 Strategy is lower, thus better.
- Compared with ACWI (21.5%) in the period of the last 3 years, the 30 days standard deviation of 9.9% is smaller, thus better.

'Risk measures typically quantify the downside risk, whereas the standard deviation (an example of a deviation risk measure) measures both the upside and downside risk. Specifically, downside risk in our definition is the semi-deviation, that is the standard deviation of all negative returns.'

Applying this definition to our asset in some examples:- The downside volatility over 5 years of World Top 4 Strategy is 6%, which is smaller, thus better compared to the benchmark ACWI (13.2%) in the same period.
- During the last 3 years, the downside risk is 7.3%, which is lower, thus better than the value of 15.9% from the benchmark.

'The Sharpe ratio (also known as the Sharpe index, the Sharpe measure, and the reward-to-variability ratio) is a way to examine the performance of an investment by adjusting for its risk. The ratio measures the excess return (or risk premium) per unit of deviation in an investment asset or a trading strategy, typically referred to as risk, named after William F. Sharpe.'

Which means for our asset as example:- Compared with the benchmark ACWI (0.66) in the period of the last 5 years, the ratio of return and volatility (Sharpe) of 0.63 of World Top 4 Strategy is lower, thus worse.
- Looking at risk / return profile (Sharpe) in of 0.43 in the period of the last 3 years, we see it is relatively smaller, thus worse in comparison to ACWI (0.54).

'The Sortino ratio, a variation of the Sharpe ratio only factors in the downside, or negative volatility, rather than the total volatility used in calculating the Sharpe ratio. The theory behind the Sortino variation is that upside volatility is a plus for the investment, and it, therefore, should not be included in the risk calculation. Therefore, the Sortino ratio takes upside volatility out of the equation and uses only the downside standard deviation in its calculation instead of the total standard deviation that is used in calculating the Sharpe ratio.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (0.89) in the period of the last 5 years, the downside risk / excess return profile of 0.86 of World Top 4 Strategy is lower, thus worse.
- During the last 3 years, the downside risk / excess return profile is 0.59, which is lower, thus worse than the value of 0.73 from the benchmark.

'Ulcer Index is a method for measuring investment risk that addresses the real concerns of investors, unlike the widely used standard deviation of return. UI is a measure of the depth and duration of drawdowns in prices from earlier highs. Using Ulcer Index instead of standard deviation can lead to very different conclusions about investment risk and risk-adjusted return, especially when evaluating strategies that seek to avoid major declines in portfolio value (market timing, dynamic asset allocation, hedge funds, etc.). The Ulcer Index was originally developed in 1987. Since then, it has been widely recognized and adopted by the investment community. According to Nelson Freeburg, editor of Formula Research, Ulcer Index is “perhaps the most fully realized statistical portrait of risk there is.'

Which means for our asset as example:- Looking at the Downside risk index of 2.4 in the last 5 years of World Top 4 Strategy, we see it is relatively lower, thus better in comparison to the benchmark ACWI (6.26 )
- During the last 3 years, the Downside risk index is 2.97 , which is lower, thus better than the value of 7.08 from the benchmark.

'A maximum drawdown is the maximum loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum Drawdown is an indicator of downside risk over a specified time period. It can be used both as a stand-alone measure or as an input into other metrics such as 'Return over Maximum Drawdown' and the Calmar Ratio. Maximum Drawdown is expressed in percentage terms.'

Using this definition on our asset we see for example:- The maximum DrawDown over 5 years of World Top 4 Strategy is -17.1 days, which is higher, thus better compared to the benchmark ACWI (-33.5 days) in the same period.
- Compared with ACWI (-33.5 days) in the period of the last 3 years, the maximum DrawDown of -17.1 days is higher, thus better.

'The Drawdown Duration is the length of any peak to peak period, or the time between new equity highs. The Max Drawdown Duration is the worst (the maximum/longest) amount of time an investment has seen between peaks (equity highs). Many assume Max DD Duration is the length of time between new highs during which the Max DD (magnitude) occurred. But that isn’t always the case. The Max DD duration is the longest time between peaks, period. So it could be the time when the program also had its biggest peak to valley loss (and usually is, because the program needs a long time to recover from the largest loss), but it doesn’t have to be'

Which means for our asset as example:- The maximum days below previous high over 5 years of World Top 4 Strategy is 148 days, which is lower, thus better compared to the benchmark ACWI (373 days) in the same period.
- Compared with ACWI (138 days) in the period of the last 3 years, the maximum days under water of 100 days is lower, thus better.

'The Average Drawdown Duration is an extension of the Maximum Drawdown. However, this metric does not explain the drawdown in dollars or percentages, rather in days, weeks, or months. The Avg Drawdown Duration is the average amount of time an investment has seen between peaks (equity highs), or in other terms the average of time under water of all drawdowns. So in contrast to the Maximum duration it does not measure only one drawdown event but calculates the average of all.'

Applying this definition to our asset in some examples:- The average days under water over 5 years of World Top 4 Strategy is 34 days, which is smaller, thus better compared to the benchmark ACWI (81 days) in the same period.
- Looking at average time in days below previous high water mark in of 32 days in the period of the last 3 years, we see it is relatively lower, thus better in comparison to ACWI (37 days).

Historical returns have been extended using synthetic data.
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- Note that yearly returns do not equal the sum of monthly returns due to compounding.
- Performance results of World Top 4 Strategy are hypothetical, do not account for slippage, fees or taxes, and are based on backtesting, which has many inherent limitations, some of which are described in our Terms of Use.