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 is the amount of value an investor earns from a security over a specific period, typically one year, when all distributions are reinvested. Total return is expressed as a percentage of the amount invested. For example, a total return of 20% means the security increased by 20% of its original value due to a price increase, distribution of dividends (if a stock), coupons (if a bond) or capital gains (if a fund). Total return is a strong measure of an investment’s overall performance.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (54.4%) in the period of the last 5 years, the total return, or performance of 93.9% of World Top 4 Strategy is higher, thus better.
- Looking at total return in of 38.8% in the period of the last 3 years, we see it is relatively greater, thus better in comparison to ACWI (18.3%).

'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 return (CAGR) over 5 years of World Top 4 Strategy is 14.2%, which is greater, thus better compared to the benchmark ACWI (9.1%) in the same period.
- Looking at annual performance (CAGR) in of 11.6% in the period of the last 3 years, we see it is relatively higher, thus better in comparison to ACWI (5.8%).

'Volatility is a rate at which the price of a security increases or decreases for a given set of returns. Volatility is measured by calculating the standard deviation of the annualized returns over a given period of time. It shows the range to which the price of a security may increase or decrease. Volatility measures the risk of a security. It is used in option pricing formula to gauge the fluctuations in the returns of the underlying assets. Volatility indicates the pricing behavior of the security and helps estimate the fluctuations that may happen in a short period of time.'

Applying this definition to our asset in some examples:- Looking at the historical 30 days volatility of 8.1% in the last 5 years of World Top 4 Strategy, we see it is relatively lower, thus better in comparison to the benchmark ACWI (20.2%)
- Compared with ACWI (16.6%) in the period of the last 3 years, the volatility of 6.9% is smaller, thus better.

'Downside risk is the financial risk associated with losses. That is, it is the risk of the actual return being below the expected return, or the uncertainty about the magnitude of that difference. 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.'

Which means for our asset as example:- Compared with the benchmark ACWI (14.7%) in the period of the last 5 years, the downside volatility of 5.7% of World Top 4 Strategy is smaller, thus better.
- Compared with ACWI (11.6%) in the period of the last 3 years, the downside deviation of 4.5% is lower, thus better.

'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.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (0.33) in the period of the last 5 years, the risk / return profile (Sharpe) of 1.44 of World Top 4 Strategy is higher, thus better.
- During the last 3 years, the ratio of return and volatility (Sharpe) is 1.32, which is larger, thus better than the value of 0.2 from the benchmark.

'The Sortino ratio measures the risk-adjusted return of an investment asset, portfolio, or strategy. It is a modification of the Sharpe ratio but penalizes only those returns falling below a user-specified target or required rate of return, while the Sharpe ratio penalizes both upside and downside volatility equally. Though both ratios measure an investment's risk-adjusted return, they do so in significantly different ways that will frequently lead to differing conclusions as to the true nature of the investment's return-generating efficiency. The Sortino ratio is used as a way to compare the risk-adjusted performance of programs with differing risk and return profiles. In general, risk-adjusted returns seek to normalize the risk across programs and then see which has the higher return unit per risk.'

Which means for our asset as example:- Looking at the ratio of annual return and downside deviation of 2.04 in the last 5 years of World Top 4 Strategy, we see it is relatively larger, thus better in comparison to the benchmark ACWI (0.45)
- Looking at excess return divided by the downside deviation in of 2 in the period of the last 3 years, we see it is relatively greater, thus better in comparison to ACWI (0.28).

'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.'

Applying this definition to our asset in some examples:- Looking at the Ulcer Index of 2.69 in the last 5 years of World Top 4 Strategy, we see it is relatively lower, thus better in comparison to the benchmark ACWI (10 )
- During the last 3 years, the Ulcer Index is 2.84 , which is smaller, thus better than the value of 11 from the benchmark.

'Maximum drawdown measures the loss in any losing period during a fund’s investment record. It is defined as the percent retrenchment from a fund’s peak value to the fund’s valley value. The drawdown is in effect from the time the fund’s retrenchment begins until a new fund high is reached. The maximum drawdown encompasses both the period from the fund’s peak to the fund’s valley (length), and the time from the fund’s valley to a new fund high (recovery). It measures the largest percentage drawdown that has occurred in any fund’s data record.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (-33.5 days) in the period of the last 5 years, the maximum drop from peak to valley of -14.6 days of World Top 4 Strategy is greater, thus better.
- During the last 3 years, the maximum drop from peak to valley is -8.1 days, which is greater, thus better than the value of -26.4 days from the benchmark.

'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'

Applying this definition to our asset in some examples:- Looking at the maximum days below previous high of 247 days in the last 5 years of World Top 4 Strategy, we see it is relatively lower, thus better in comparison to the benchmark ACWI (480 days)
- During the last 3 years, the maximum time in days below previous high water mark is 247 days, which is lower, thus better than the value of 480 days from the benchmark.

'The Drawdown Duration is the length of any peak to peak period, or the time between new equity highs. 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.'

Which means for our asset as example:- Compared with the benchmark ACWI (118 days) in the period of the last 5 years, the average days below previous high of 44 days of World Top 4 Strategy is lower, thus better.
- Compared with ACWI (172 days) in the period of the last 3 years, the average days below previous high of 60 days is lower, thus better.

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.