Weekly Market Recap This week saw generally positive US data, with US unemployment holding at 5.3%. The level of unemployment is very close to what the Federal Reserve considers "full employment". However, despite this positive economic news, concerns about the Fed's actions and global growth has weighed on markets recently. As expected, Greece reached an agreement on reforms bringing it closer to its third bailout in recent history. Russian economic data showed that Russia fell into recession after its economy shrank in the first half of 2015. This is due primarily to a weaker currency and declining commodity prices. China devalued its currency this week, apparently to boost exports. When reading news headlines, which tend to focus on the bad news, it is helpful to remember the diversification we recommend in your portfolio and how it helps. For example, Russia's 2015 recession is driven, in part, by falling commodity prices such as oil. Yet, the same trend is reducing costs for importers of oil such as Japan and most of Europe and stock markets in these countries are performing well in 2015. Equally, China's currency, the yuan, fell this week, but this lead to a relatively pronounced rise in the value of the euro. As such, with an internationally diversified portfolio, trends are often balanced out across a portfolio. Generally, in 2015 we are seeing several trends that are detracting from emerging market performance, contributing to performance in developed markets. Recently, total assets in Exchange Traded Funds (ETFs) have exceeded the assets devoted to hedge funds on some estimates. Hedge funds typically charge very high fees, a typical hedge fund can charge both a 2% fixed fee and also 20% of performance. Conversely, ETFs can offer a low cost way to create a diversified portfolio. Many ETFs we use at FutureAdvisor are an order of magnitude lower in cost than even the fixed component of hedge fund fees. It is perhaps not surprising then that investors are becoming disillusioned with high cost hedge funds at the same time that growth in low cost ETFs appears to be accelerating. Assets in ETFs are now just under $3 trillion dollars across almost 5,000 different products according to ETFGI estimates. Another part of the value of ETFs in our view, is the tax efficiency due to in kind distributions. This enables ETFs to offset capital gains that would otherwise be passed on to investors as part of the ETF creation and redemption process. What it means for ETF investors is that ETFs are generally more tax efficient than similar instruments, such as mutual funds. This can help your after tax returns even before tax loss harvesting and the other services that we include in our Premium service. Disclaimer:
The views expressed herein are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Past performance is not indicative of future results. The tax loss harvesting strategy discussed should not be interpreted as tax advice and it does not represent in any manner that the tax consequences detailed will be obtained or that its tax loss harvesting strategy will result in any particular tax consequence. Clients should consult with their personal tax advisors regarding the tax consequences of investing. Your Portfolio Summary | $9,578.95 Your Total Assets | Ways To Improve Your Portfolio | 0 Accounts with Actions | Your portfolio has no recommended actions right now. We'll watch over your investments and alert you with an email when there are actions for you to complete. Sign in to see detailed steps  | | Sign in to see your full dashboard | | 
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