XTF Boosts Analysis for ‘Theme’ Investors

Exchange-traded fund data provider XTF is increasing the depth of content and analytics it makes available to clients and public investors who use its website, and is preparing to add more analysis next year in a bid to grow its business among registered investment advisors, officials say.

The vendor has just rolled out a “consumer sentiment indicator” on its website, which allows visitors to view anonymous statistics for all searches on xtf.com over the past seven or 30 days, or indefinitely, showing the top 10 trending ETFs, companies and investment objectives. Currently, XTF has defined around 100 investment objectives, which chief technology officer Richard Radnay says cover the vast majority of what people search for on the site, but adds that if someone searches for an objective that has not yet been defined by XTF, the vendor can easily add it to its database.

Users can click through from top objectives, companies or ETFs to more detailed pages of relevant ETF data. Some of the basic information is available for free, some is free but requires registration, while other data and capabilities—such as fund flows and trend analysis, or the ability to export data to spreadsheets—are only available via subscription packages, which cost $39 and $99 per month.

Like the sentiment indicator, XTF’s heatmap views—which use different color-coded geographical and industry-based maps to display ETF performance and fund flows information—are intended to allow users to invest based on themes, whereby they can generate investment ideas without having specific insights or knowledge of an industry or company, but by using the heatmaps to gauge past performance as well as what regions and industries money is moving into in real time.

The vendor’s main heatmap page features a global map covering 14 regions and around 30 countries, from where users can drill down by geography to asset class and industries and sectors. XTF creates the fund flows data by collecting the underlying holdings of all ETFs on a daily basis, and mapping them by geography, asset class, sector and industry using the vendor’s own classification methodology, which covers around 92 different industries.

“Then we aggregate them back up into 5,040 thematic indexes that we track on a daily basis, and the heatmaps are a visual representation of those indexes,” Radnay says. From the heatmaps, users can access tables of data to see which industries perform better in certain countries, for example, allowing them to decide whether to invest directly in an industry or region, or to invest in ETFs with exposure to that industry or region.

Radnay says what the vendor has built so far only represents the first phase of XTF’s development plans. “The next phase will be to leverage the fund flows into a trend analysis… and use a ‘push’ format to bring the cream of the crop to the surface and push that out to clients. Our algorithms will red-flag certain circumstances around inflows, and we’ll send an email to anyone who has registered an interest in that,” he says.

At present, parts of the global map in XTF’s heatmaps are depicted as a grey background, meaning that no US-listed ETFs are invested in those countries. However, the vendor plans to add more data from other regions. “Currently, we cover the US, Canada and Japan,” says chief executive Mel Herman. “When we add the rest of the world in 2012, users will be able to evaluate different ETFs in different countries and currencies following the same index, and decide which is the best investment for them.”

Herman also says other enhancements planned for next year include portfolio optimization tools. “The next stop in our development for 2012 will be a big push into the RIA community, for institutions to use our data internally and to distribute to their clients,” he says. Currently the vendor’s client base ranges from sophisticated retail investors to institutional investors. “But because of the trend analysis, this has tremendous applicability to high-end institutional users,” Herman adds.