By ETF Global

  • Investment strategists are predicting a tough time for the dollar in 2020, but our Quant Models show something different.
  • Investors continue to favor long U.S. equity funds versus international or EM ETFs.
  • Those looking to take advantage of a weakening dollar should skip Asia and check out Latin America, specifically the iShares MSCI Chile ETF instead.

It’s that most wonderful time of the year, when our inboxes are stuffed full of missives from every money manager under the sun with their predictions for 2020. Whether it’s the “Three Sectors to Watch” or “Top Ten Trades for a New Decade,” everyone has a point of view for the coming year, and investors can’t help but eat it up. Given that most CIOs and strategists are really in the sales and marketing business, the actual value of these articles is debatable, not to mention that if only four or five of their “Top Ten Forecasts for 2020” come true, they can say they at least are batting five hundred.

We’re not really in the business of making forecasts, but our ETFG models, most noticeably our Behavioral Quant Report, can be a good way to watch whether investors are shifting their portfolios in line with those 2020 forecasts. The most common forecast for the new year may have been the continuing downfall of the U.S. dollar, with the usual advice on ways to play this new trade typically favoring international equity ETFs, gold or other commodity funds. But for all the ink spent on predictions and forecasts, our Behavioral models have yet to show any sustained shift away from U.S. equity funds – although a clear divide between the different parts of our model could signify a shift coming later in 2020.

And what’s our top pick for 2020? Investors might be focus on underperforming Asian ETFs along with precious metal miners, but we’d suggest looking south, way south, of the border, where rising metal prices could give new life to country-specific funds hurt by political instability and weak commodity prices.

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