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.'

Applying this definition to our asset in some examples:- Compared with the benchmark ACWI (72.1%) in the period of the last 5 years, the total return, or increase in value of 110% of World Top 4 Strategy is greater, thus better.
- Compared with ACWI (19.6%) in the period of the last 3 years, the total return of 27.4% is larger, thus better.

'Compound annual growth rate (CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period. CAGR is not an accounting term, but it is often used to describe some element of the business, for example revenue, units delivered, registered users, etc. CAGR dampens the effect of volatility of periodic returns that can render arithmetic means irrelevant. It is particularly useful to compare growth rates from various data sets of common domain such as revenue growth of companies in the same industry.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (11.5%) in the period of the last 5 years, the compounded annual growth rate (CAGR) of 16% of World Top 4 Strategy is larger, thus better.
- During the last 3 years, the annual performance (CAGR) is 8.4%, which is greater, thus better than the value of 6.1% 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:- The 30 days standard deviation over 5 years of World Top 4 Strategy is 8.2%, which is lower, thus better compared to the benchmark ACWI (19.9%) in the same period.
- Looking at volatility in of 6.8% in the period of the last 3 years, we see it is relatively smaller, thus better in comparison to ACWI (16.6%).

'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.'

Using this definition on our asset we see for example:- Compared with the benchmark ACWI (14.4%) in the period of the last 5 years, the downside volatility of 5.7% of World Top 4 Strategy is lower, thus better.
- Compared with ACWI (11.5%) in the period of the last 3 years, the downside risk of 4.6% is lower, thus better.

'The Sharpe ratio was developed by Nobel laureate William F. Sharpe, and is used to help investors understand the return of an investment compared to its risk. The ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk. Subtracting the risk-free rate from the mean return allows an investor to better isolate the profits associated with risk-taking activities. One intuition of this calculation is that a portfolio engaging in 'zero risk' investments, such as the purchase of U.S. Treasury bills (for which the expected return is the risk-free rate), has a Sharpe ratio of exactly zero. Generally, the greater the value of the Sharpe ratio, the more attractive the risk-adjusted return.'

Which means for our asset as example:- Looking at the risk / return profile (Sharpe) of 1.65 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 Sharpe Ratio in of 0.87 in the period of the last 3 years, we see it is relatively greater, thus better in comparison to ACWI (0.22).

'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.'

Which means for our asset as example:- Looking at the downside risk / excess return profile of 2.36 in the last 5 years of World Top 4 Strategy, we see it is relatively greater, thus better in comparison to the benchmark ACWI (0.62)
- During the last 3 years, the excess return divided by the downside deviation is 1.28, which is higher, thus better than the value of 0.32 from the benchmark.

'The Ulcer Index is a technical indicator that measures downside risk, in terms of both the depth and duration of price declines. The index increases in value as the price moves farther away from a recent high and falls as the price rises to new highs. The indicator is usually calculated over a 14-day period, with the Ulcer Index showing the percentage drawdown a trader can expect from the high over that period. The greater the value of the Ulcer Index, the longer it takes for a stock to get back to the former high.'

Which means for our asset as example:- The Ulcer Ratio over 5 years of World Top 4 Strategy is 2.68 , which is smaller, thus better compared to the benchmark ACWI (9.93 ) in the same period.
- Compared with ACWI (11 ) in the period of the last 3 years, the Downside risk index of 2.92 is smaller, thus better.

'Maximum drawdown is defined as the peak-to-trough decline of an investment during a specific period. It is usually quoted as a percentage of the peak value. The maximum drawdown can be calculated based on absolute returns, in order to identify strategies that suffer less during market downturns, such as low-volatility strategies. However, the maximum drawdown can also be calculated based on returns relative to a benchmark index, for identifying strategies that show steady outperformance over time.'

Applying this definition to our asset in some examples:- Compared with the benchmark ACWI (-33.5 days) in the period of the last 5 years, the maximum DrawDown 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'

Which means for our asset as example:- 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 (516 days)
- Looking at maximum days below previous high in of 247 days in the period of the last 3 years, we see it is relatively smaller, thus better in comparison to ACWI (516 days).

'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.'

Which means for our asset as example:- Looking at the average days below previous high of 44 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 (132 days)
- Compared with ACWI (191 days) in the period of the last 3 years, the average days below previous high of 61 days is lower, thus better.

Historical returns have been extended using synthetic data.
[Show Details]

Allocations and holdings shown below are delayed by one month.

Register now to get the current trading allocations.

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