The ETFs (Exchange Traded Funds) Used by the ETF Systems

 

The following trading vehicles are used by the ETF trading systems. All of the systems are pure exchange traded funds or closed end mutual funds. All trade like stocks and represent specific industry segments or investment sectors.

The trading vehicles have been chosen to cover a broad spectrum of sectors that generally do not correspond in price movement or overlap too much. The theory of the ETF switching systems is that money always moves somewhere.

When one or more sectors begin to become out of favor moving their prices down, other sectors come into favor. The systems attempt to judge when to move to a new sector based on momentum and other factors using mechanical trading systems we developed.

The trading vehicles the ETF Systems 1-3 and 5 use are as follows:

QQQQ

QQQQ is now the PowerShares QQQ Trust, Series 1. Formerly called the NASDAQ-100 Trust. It is a typical exchange traded fund in that it is a unit investment trust that attempts to mimic the return and yield of the NASDAQ 100 index. The NASDAQ 100 index is heavily weighted in favor of technology stocks.

IWM

IWM tracks the Russell 2000 Index. The Index is a capitalization-weighted index of the approximately 2000 smallest companies in the Russell 3000 Index. Generally this is considered a good index to track the performance of small companies.

GLD

GLD is the StreetTracks Gold Trust. It holds gold bullion and tracks the price of the underlying asset (gold bullion.) Until late in 2004, the ETF systems use stock symbol ASA (GLD did not exist until then.) ASA is a closed end fund that tracks the performance of companies engaged in precious metal mining.

IEV

The iShares S&P Europe 350 Index Fund seeks investment results that matches the return in price and yield of the Standard & Poor’s Europe 350 Index. The Index measures the performance of the stocks of companies in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

ILF

ILF is the iShares S&P Latin America 40 Index Fund. If tracks the performance of the the Standard & Poor’s Latin America 40 Index which consists of highly liquid securities of companies from Mexico, Brazil, Argentina and Chile.

EWJ

This iShares fund tracks the MSCI Japan Index. This index measures performance of Japanese stocks.

EPP

The iShares MSCI Pacific ex-Japan Index Fund provides investment results that correspond generally to the return of stocks in the Australia, Hong Kong, New Zealand and Singapore markets.

EEM

This ETF tracks the performance of the MSCI Emerging Markets Index - it tracks international stocks in smaller markets.

LAQ

LAQ is the Latin America Equity Fund, Inc. (LAQ), a close-ended equity mutual fund that invests in companies across all market capitalization sizes in Mexico, Brazil, Chile, Argentina and other Latin American countries.

TLT

The investment seeks results that correspond generally to the price and yield performance of the long-term sector of the United States Treasury market.

XLE

XLE is a Select Sector Spdr Trust ETF that tracks stocks from the oil, gas, energy equipment and energy services sector.

System 4 uses the following ETF:

EFA

EFA is the iShares MSCI EAFE Index Fund which seeks to match the results of the MSCI EAFE Index. The index includes stocks from Europe, Australasia and the Far East.

System 6 uses all of the ETFs listed above plus the following:

AGG

AGG is the iShares Lehman Aggregate Bond Fund which seeks investment results that correspond generally to the price and yield performance of the total United States investment-grade bond market as defined by the Lehman Brothers U.S. Aggregate Index. The Index measures the performance of the United States investment-grade bond market, which includes investment-grade United States Treasury bonds, government-related bonds, investment-grade corporate bonds, mortgage pass-through securities, commercial mortgage-backed securities and asset-backed securities that are publicly offered for sale in the United States. The securities in the Index must have at least one year remaining to maturity

EWA

EWA is the iShares MSCI Australia Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Australian market, as measured by the MSCI Australia Index (the Index). The Index seeks to measure the performance of the Australian equity market.

EWC

EWC is the iShares MSCI Canada Index Fund which seeks to provide investment results that correspond to the price and yield performance of publicly traded securities in the aggregate in the Canadian market, as measured by the MSCI Canada Index

EWD

EWD is the iShares MSCI Sweden Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Swedish market, as measured by the MSCI Sweden Index.

EWG

EWG is the iShares MSCI Germany Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the German market, as measured by the MSCI Germany Index.

EWH

EWH is the iShares MSCI Hong Kong Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Hong Kong market, as measured by the MSCI Hong Kong Index.

EWM

EWM is the iShares MSCI Malaysia Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index.

FXI

FXI is the iShares FTSE/Xinhua China 25 Index Fund which seeks investment results that correspond generally to the price and yield performance of the FTSE/Xinhua China 25 Index. The Index is designed to represent the performance of the largest companies in the China equity market that are available to international investors.

DBA

The investment seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index - Optimum Yield Agriculture Excess Return. The index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities – corn, wheat, soy beans and sugar. The index is intended to reflect the performance of the agricultural sector. The fund is nondiversified.

EWO

EWO is the iShares MSCI Austria Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Austrian market, as measured by the MSCI Austria Index.

EWW

The investment seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Mexican market, as measured by the MSCI Mexico index. The fund normally invests at least 95% of assets in the securities of its underlying index and in ADRs based on the securities in its underlying index. It uses a representative sampling strategy to try to track the index. The index consists of stocks traded primarily on the Mexican Stock Exchange.

EWZ

EWZ is the iShares MSCI Brazil Index Fund which seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Brazilian market, as measured by the MSCI Brazil Index.

OIL

OIL is the iPath S&P GSCI Crude Oil Fund and is linked to the performance of the Goldman Sachs Crude Oil Return Index. The index is derived from the West Texas Intermediate (WTI) crude oil futures contract traded on the New York Mercantile Exchange.