The World Country Developed strategy is a sub-strategy that picksÂ the top country of the specified region. It is part of the World Top 4 investment strategy.

SPYÂ SPDR S&P 500 ETF

DIAÂ SPDR Dow Jones Industrial Average ETF

EIRL iShares MSCI Ireland Capped

EIS iShares MSCI Israel

ENZL iShares MSCI New Zealand Investable Market

EPOL iShares MSCI Poland 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

EWU iShares MSCI United Kingdom Index

NORW Global X FTSE Norway 30 ETF

QQQ PowerShares Nasdaq-100 Index

From the HEDGE strategy:

GLDÂ â€“Â SPDR Gold Shares

TLTâ€“Â iShares Barclays Long-Term Treasuries (15-18yr)

Short Sectors:

SMN - ProShares UltraShort Basic Materials

ERY - Direxion Daily Energy Bear 3X ETF

SKF - ProShares UltraShort Financials

SIJ - ProShares UltraShort Industrial

REW - ProShares UltraShort Technology

RXD - ProShares UltraShort Health Car

SCC - ProShares UltraShort Consumer Service

SDP - ProShares UltraShort Utilities

SZK - ProShares UltraShort Consumer Goods

'The total return on a portfolio of investments takes into account not only the capital appreciation on the portfolio, but also the income received on the portfolio. The income typically consists of interest, dividends, and securities lending fees. This contrasts with the price return, which takes into account only the capital gain on an investment.'

Applying this definition to our asset in some examples:- The total return over 5 years of World Countries Developed is 172.2%, which is larger, thus better compared to the benchmark SPY (80%) in the same period.
- Compared with SPY (31.8%) in the period of the last 3 years, the total return of 72.8% is greater, thus better.

'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:- Looking at the compounded annual growth rate (CAGR) of 22.2% in the last 5 years of World Countries Developed, we see it is relatively greater, thus better in comparison to the benchmark SPY (12.5%)
- During the last 3 years, the annual return (CAGR) is 20%, which is greater, thus better than the value of 9.7% from the benchmark.

'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.'

Using this definition on our asset we see for example:- Looking at the volatility of 21.7% in the last 5 years of World Countries Developed, we see it is relatively higher, thus worse in comparison to the benchmark SPY (21.3%)
- During the last 3 years, the volatility is 17.9%, which is greater, thus worse than the value of 17.6% from the benchmark.

'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:- The downside deviation over 5 years of World Countries Developed is 15.2%, which is lower, thus better compared to the benchmark SPY (15.3%) in the same period.
- During the last 3 years, the downside risk is 12.1%, which is smaller, thus better than the value of 12.3% from the benchmark.

'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.'

Applying this definition to our asset in some examples:- The risk / return profile (Sharpe) over 5 years of World Countries Developed is 0.91, which is greater, thus better compared to the benchmark SPY (0.47) in the same period.
- Compared with SPY (0.41) in the period of the last 3 years, the Sharpe Ratio of 0.98 is larger, thus better.

'The Sortino ratio improves upon the Sharpe ratio by isolating downside volatility from total volatility by dividing excess return by the downside deviation. The Sortino ratio is a variation of the Sharpe ratio that differentiates harmful volatility from total overall volatility by using the asset's standard deviation of negative asset returns, called downside deviation. The Sortino ratio takes the asset's return and subtracts the risk-free rate, and then divides that amount by the asset's downside deviation. The ratio was named after Frank A. Sortino.'

Applying this definition to our asset in some examples:- Compared with the benchmark SPY (0.66) in the period of the last 5 years, the ratio of annual return and downside deviation of 1.3 of World Countries Developed is higher, thus better.
- Compared with SPY (0.58) in the period of the last 3 years, the excess return divided by the downside deviation of 1.44 is larger, thus better.

'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:- The Downside risk index over 5 years of World Countries Developed is 6.69 , which is lower, thus better compared to the benchmark SPY (9.43 ) in the same period.
- Looking at Ulcer Index in of 6.61 in the period of the last 3 years, we see it is relatively smaller, thus better in comparison to SPY (10 ).

'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:- Looking at the maximum drop from peak to valley of -28.6 days in the last 5 years of World Countries Developed, we see it is relatively greater, thus better in comparison to the benchmark SPY (-33.7 days)
- Compared with SPY (-24.5 days) in the period of the last 3 years, the maximum DrawDown of -17.3 days is greater, thus better.

'The Maximum 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. It is the length of time the account was in the Max Drawdown. A Max Drawdown measures a retrenchment from when an equity curve reaches a new high. It’s the maximum an account lost during that retrenchment. This method is applied because a valley can’t be measured until a new high occurs. Once the new high is reached, the percentage change from the old high to the bottom of the largest trough is recorded.'

Which means for our asset as example:- Compared with the benchmark SPY (480 days) in the period of the last 5 years, the maximum time in days below previous high water mark of 263 days of World Countries Developed is smaller, thus better.
- Compared with SPY (480 days) in the period of the last 3 years, the maximum days below previous high of 263 days is lower, thus better.

'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.'

Using this definition on our asset we see for example:- The average days below previous high over 5 years of World Countries Developed is 52 days, which is lower, thus better compared to the benchmark SPY (119 days) in the same period.
- During the last 3 years, the average time in days below previous high water mark is 64 days, which is lower, thus better than the value of 174 days from the benchmark.

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 Countries Developed 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.