Most Read IRIS Articles of the Week: November 6-10

Most Read IRIS Articles of the Week: November 6-10

Here’s a look at the Top 11 Most Viewed Articles of the Week on, November 6-10, 2017

Click the headline to read the full article.  Enjoy!

1. The Crash of ’87 and What It Means for You

The New York stock market crash of 1987 happened 30 years ago when, on October 19, the Dow Jones Industrial Average (DJIA or the Dow) plunged by a then-record 508 points—a 22% decline in the index. — Brian Levitt

2. 5 Reasons Clients Leave Their Financial Advisors

As with a lot of things in life, being a financial advisor is more or less about doing things that shift the odds in your favor. I figure that if you can avoid making mistakes, you can greatly increase your chance of success. — James Pollard

3. Investing in Robotics? Follow These 5 Simple Rules

It seems everyone wants to jump on the robotics bandwagon these days. It’s no surprise. Robotics, automation, and artificial intelligence—or RAAI—includes many of the most exciting companies in today’s universe of emerging technologies. —  Richard Lightbound

4. Advisors and Clients Are Not Prepared for a Market Correction

If you were around in 2008-2010 as a financial advisor and a client, remember what the conversations were like and how long they took with people worried about their future. Because we have not seen a major correction since then, financial advisors forget how much time it took to have discussions, rebalance portfolios if necessary and manage future risks. — Grant Hicks

5. The #1 Marketing Tactic of Top Advisors

It's important when developing your brand and business to capitalize on small markets, whether its government employees, blue collar business owners, or adventure junkies, cartering your brand to your ideal clients is the best way to get them through the door. — Kirk Lowe and Matt Halloran

6. Is Courage Holding You Back From Making a Move? Think Again

We’ve all been there many times in our lives: The moment where you need to make a critical decision that can alter everything from that moment on. Your mind and heart race to the point where you feel like you’re about to explode. Then one of two things happens ... — Mindy Diamond

7. Your Financial Future Depends Upon Asking the Right Questions

Transitions between different phases of life often reveal more questions than answers. For high income earners, these transitions can be periods of opportunity but also present significant dangers if smart decisions aren’t made. — James E. Wilson

8. When Clients Cohabitate, It's Time For "The Money Talk"

Every advisor has seen it. A client announces the great news: he or she is moving in with a “significant other” and the couple can’t wait to begin a new life together. — Laura McCarron

9. The 7 Steps to Negotiating a New Car

We all know that uneasy feeling of going into the car dealership to purchase that brand new car. You’ve got your best game face on; you’re prepared for battle. You tell yourself you are not walking out of there unless you’ve got the best deal possible.  Then BAM! — Andrew Rosen

10. Don't Sell SRI Funds Until You Read This!

If you are already selling SRI funds or if you are considering it – good for you! But if your client base is mostly comprised of men – there is a good chance that it may be a harder sell. — Paulette Filion and Judy Paradi

11. 5 Tips to Help Your Clients Turn Business Travel “Lemons” into Lemonade

As an advisor, your goal is to help your clients become more financially secure. At the same time, you hope to give them peace of mind and, ultimately, make their lives better and easier every day. — Merriah Harkins

Douglas Heikkinen
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IRIS Co-Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues ... Click for full bio

An Emerging Theme In Thematic Investing

An Emerging Theme In Thematic Investing

Exchange traded funds (ETFs) are popular vehicles for market participants looking to engage in thematic investing. Thematic investing looks to take advantage of future growth trends, including disruptive technologies. Given that forward-looking approach, stock-picking in the thematic universe is equally as hard, if not harder, than in traditional market segments.

Go back to the late 1990s, before the bursting of the Internet/technology bubble. Back then, investors stood an equal chance of selecting E-Toys over Amazon or some no longer in existence networking equipment maker over Cisco.

“History is littered with examples of prospering industries with no indication of which company will come to dominate the industry,” according to Nasdaq. “This suggests that successful thematic investing is more about selecting baskets of investments rather than single securities.”1

The ALPS Disruptive Technologies ETF (DTEC) provides basket exposure to a broad swath of thematic investments. DTEC features exposure to not just one or two emerging technologies, but 10 such themes on an equal-weight basis.

Disruptive Efficiency

The 10 themes represented in DTEC are as follows: 3D printing, clean energy, cloud computing, cybersecurity, data and analytics, fintech, healthcare innovation, Internet of Things (IoT), mobile payments and robotics and artificial intelligence (AI).

Generally speaking, fund issuers have been quick to respond to disruptive and transformative technologies, bringing products to market to tap these themes. Prior to DTEC coming to market late last year, there were ETFs devoted exclusively to cloud computing, cybersecurity, robotics and other themes featured in DTEC. However, few use the basket approach to themes employed by DTEC.

Related: Getting Paid to Play The Energy Patch

February, a rough month for U.S. stocks, highlighted the advantages of DTEC's multi-theme methodology. Seven of the 10 themes found in the fund finished the month lower, but DTEC was able to outperform the S&P 500 on a monthly basis.

Focusing on individual themes can be rewarding over the long-term, but not all investors have the risk tolerance for such a strategy. Consider this: the Indxx Global Robotics & Artificial Intelligence Thematic Index jumped more than 48% in 2017. That type of performance is enough to seduce many investors, but that same benchmark slipped 7.60% in February, generating monthly volatility of 34.10%.Said another way, that robotics and AI index's February slide was more than triple the loss experienced by DTEC during the month.

More Advantages

While it probably is not accurate to call the indexes devoted to individual disruptive themes “old,” many use old school weighting methodologies. For example, the two largest components in the ISE Cloud Computing Index are Netflix, Inc. (NFLX) and Inc. (AMZN). Only two members of the S&P 500 have larger market values than Amazon while Netflix currently has a larger market cap than Wal-Mart (WMT) and McDonald's (MCD).

Holdings subject ot change as of 12/31/17

For its part, DTEC not only equally weights its 10 disruptive themes, but its 100 components as well, potentially reducing single stock risk in the process. As the chart below confirms, equally weighting stocks is rewarding across sectors and market capitalization segments.

Past performance does not guarantee future results

Annualized returns for the past 10 years show seven of the 11 S&P 500 sectors, when equally weighted, outperform cap-weighted equivalents, according to S&P. Three of those seven sectors – financial services, healthcare and technology – are prominent parts of DTEC's roster.

1 Source: Nasdaq Dec. 28, 2015

2 Source: ETF Replay data


An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus which contain this and other information call 866.675.2639 or visit Read the prospectus carefully before investing.

An investment in the ALPS Disruptive Technologies ETF (DTEC) may be subject to substantially greater risk and volatility than investments in larger and more mature technology companies.

There is no assurance that the market developments and sector growth based upon the themes discussed in the article will come to pass.

ALPS Disruptive Technologies ETF shares are not individually redeemable. Investors buy and sell shares of the ALPS Disruptive Technologies ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 50,000 shares.

ALPS Advisors, Inc. (AAI) has engaged IRIS Werks, LLC (IRIS) to produce analysis and commentary on ALPS-advised ETFs. IRIS currently has a compensated business relationship with AAI. AAI is not affiliated with IRIS.

The content and opinions expressed in this article are that of the author and not the views and opinions of AAI.  In addition, AAI assumes no responsibility to ensure the accuracy of the content written by the author.

There are risks involved with investing in ETFs including the loss of money. Additional information regarding the risks of this investment is available in the prospectus. Past Performance is not indicative of future results.

The fund is new and has limited operating history.

ALPS Portfolio Solutions Distributor, Inc. is the distributor for the ALPS Disruptive Technologies ETF. AAI is affiliated with ALPS Portfolio Solutions Distributor, Inc.

The author is not an investment professional and this article should not be considered investment advice. While the information and statistical data contained herein are based on sources believed to be reliable, the author takes no responsibility to ensure the accuracy of the content. Additionally, this article should not be relied on or be the basis for an investment decision. Information that is historical is not indicative of future results, and subject to change.

S&P 500®: A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

S&P SmallCap 600®: A capitalization-weighted index that measures the small-cap segment of the U.S. equity market.

S&P MidCap 400®: A capitalization-weighted index that measures the mid-cap segment of the U.S. equity market.

Indxx Global Robotics & Artifical Intelligence Thematic Index: The Indxx Global Robotics & Artificial Intelligence Thematic Index is designed to track the performance of companies listed in developed markets that are expected to benefit from the increased adoption and utilization of robotics and Artificial Intelligence ("AI"), including companies involved in Industrial Robotics and Automation, Non-Industrial Robots, Artificial Intelligence and Unmanned Vehicles.

Tom Lydon
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IRIS Co-Founder and Editor and proprietor of Tom is a frequent contributor to major print, radio and television media including Forbes, The Wall Street Jou ... Click for full bio