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Capital Markets: Exchange Traded Funds, December 2015

PowerShares Water (12-2015)_FINALPowershares Water Resources

Powershares Water Resources (PHO) stock still stands at 36.2% below its expected price despite a sustained price increase since mid-September. Powershares price has decreased by 14.5% over the past 52 weeks.

PHO stock had been over performing relative to the returns forecasted by the Capital Asset Pricing Model by an annual rate of 2.9% from January 2006 through December 2012. Powershares price has generally followed the expected price forecasted by the Capital Asset Pricing Model adjusted by the historical over performance through the first quarter of 2013. Thereafter, its performance has lagged behind its expected price.

First Trust (12-2015)_FINALFirst Trust ISE Water

First Trust ISE Water (FIW) stock now stands at 29.7% below its expected price. First Trust’s price is down 8.5% over the past 52 weeks.

FIW stock has been over-performing relative to the returns forecasted by the Capital Asset Pricing Model by an annual rate of 6.4% from January 2006 through December 2012 and is the strongest performer of the four water ETF’s tracked by JOW. Despite this historical performance, First Trust’s actual price started falling behind the expected price forecasted by the Capital Asset Pricing Model (adjusted by the historical over performance) by the end of the first quarter 2013.

Guggenheim (12-2015)_FINALGuggenheim S&P Global Water

Guggenheim S&P Global Water (CGW) stock is 24.1% below its expected price. Guggenheim’s price is down 0.8% over the past 52 weeks.

CGW stock has been over-performing relative to the returns forecasted by the Capital Asset Pricing Model by an annual rate of 1.6% from January 2006 through December 2012. Guggenheim’s actual price started falling behind the expected price forecasted by the Capital Asset Pricing Model (adjusted by the historical over performance) by the end of the first quarter 2013.

PowerShares Global (12-2015)_FINALPowershares Global Water

Powershares Global Water (PIO) stock price now stands at 28.4% below its expected price. Powershares Global’s price is down 9.4% over the past 52 weeks.

PIO stock had been under-performing relative to the returns forecasted by the Capital Asset Pricing Model by an annual rate of 2.1% from January 2006 through December 2012. The actual price has generally followed the expected price forecasted by the Capital Asset Pricing Model (adjusted by this historical under-performance) over 2013. The actual stock price started running ahead of the expected price since last December.