Recap of ETFs YTD – Who’s on top, who’s on the bottom and why

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Large Cap Growth dominates the top tiers

While large cap growth ETFs have been hot for some time, they really accelerated their dominance since the market bottomed on March 23^rd. When sorted by YTD performance, it looks like a “who’s who” of large cap growth ETFs. Out of the 122 “style-box” ETFs on the list, the top nine are large cap growth.

It shouldn’t be a surprise to anyone to see who is king of the mountain. Of course, it’s QQQ. With a huge +31.25% YTD performance number, at a time when the S&P is only up 6%, the Nasdaq 100 has been the place to be. QQQ has a 45% technology allocation, which includes Apple, Microsoft, and Amazon taking up a whopping third of the portfolio. It’s almost as if COVID-19 had little impact on their upward trajectories.

Where you didn’t want to be so far this year is in any ETF that has the words “value” or “small” in it. The YTD bottom-feeder is S&P Small Cap Low Volatility (XSLV), with a whopping -28.49% YTD number. With its 25% weighting in financials and 23% in industrials, it did not have the low volatility investors were hoping for during the market plunge and subsequent snap back. In fact, the “best” small cap value ETF (VBR) is down -14.83% YTD. Additionally, due to continued money flows into mega cap stocks, even an equal-weighted S&P 500 ETF (RSP) is still negative for the year.

Of course, all of this is rear view mirror stuff. There could easily be a change of leadership if the economy continues to recover and we start to see some type of return to normalcy in the coming months. That’s asking a lot, however, because we have so many challenges laid out before us.

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Optimus Advisory Group manages liquid tactical and alternative investment strategies that meet the needs of our clients. We use a disciplined, quantitative methodology to build and manage our portfolios.

Over a full market cycle, these strategies are designed to provide superior risk-adjusted returns while maintaining a low-correlation to traditional market indices.

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Disclosures

The performance results shown include the reinvestment of dividends and other earnings. Comparison of the Optimus Advisory Group Programs to any other indices is for illustrative purposes only and the volatility of the indices used for comparison may be materially different from the volatility of the Optimus Advisory Group Programs due to varying degrees of diversification and/or other factors. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable. Optimus Advisory Group does not make any representation that the Optimus Advisory Group Programs will or are likely to achieve returns similar to those shown in the performance results in this presentation. Optimus Advisory Group reserves the right to trade different funds within their models.

The historical S&P performance results (and those of all other indices and index funds used as proxies for indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual client or prospective client in determining whether the performance of the Optimus' portfolio meets, or continues to meet, his/her investment objective(s). It should not be assumed that any Optimus portfolio holdings will correspond directly to any such comparative index.

Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investment strategies devised or undertaken by Optimus Advisory Group) will be profitable for a client's or prospective client's portfolio. All performance results have been compiled solely by Optimus Advisory Group and have not been independently verified.

Performance results reflect hypothetical results that were achieved by means of the retroactive application of a back-tested model and, as such, the corresponding results have inherent limitations, including: (1) the model results do not reflect the results of actual trading using client assets, but were achieved by means of the retroactive application of each of the above referenced models, certain aspects of which may have been designed with the benefit of hindsight; (2) back-tested performance may not reflect the impact that any material market or economic factors might have had on the adviser’s use of the model if the model had been used during the period to actually manage client assets; (3) for various reasons (including the reasons indicated above), clients may have experienced investment results during the corresponding time periods that were materially different from those portrayed in the model.

The Optimus performance results do not reflect the impact of taxes.

Advisory Services offered through Optimus Advisory Group, a Registered Investment Advisor.

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