November 20, 2020 the Siren ETF Trust closed their acquisition of three ETFs from Reality Shares, the Nasdaq NextGen Economy ETF (NASDAQ:BLCN), DIVCON Dividend Defender ETF (CBOE:DFND) and DIVCON Leaders Dividend ETF (CBOE:LEAD) All three acquired funds began trading on the same exchanges as Siren ETFs at the open of trading on Monday November 23, 2020. This closed out a deal originally agreed upon on March 2, 2020 and we couldn’t be more excited to bring these funds under the Siren umbrella. Like Siren Large Cap Blend ETF (NASDAQ:SPQQ), Reality Shares will continue to be Index Provider for all four funds and SRN Advisors, LLC will manage the funds per the Reality Shares Index guidelines. With the acquisition it bring total Assets Under Management for the Siren ETF Trust to over $250 million, as of November 30, 2020. We now can offer investors exposure to approximately 74% of the Nasdaq 100, and 45% of the S&P 500 through the blended ETF of SPQQ, a Blockchain focused fund in BLCN, and both dividend growers (LEAD) as well as a long/short dividend focus in DFND. We look forward to expanding our marketing efforts for all four funds during the next year and feel that the acquisition will allow us to leverage many opportunities for both the Siren ETF Trust and our investors.
November 2020 saw the Siren Large Cap Blend ETF (NASDAQ:SPQQ), gain 13.02% versus the S&P 500 up 10.95%. We saw some carry through of earnings season in a few of our names, and some terrific tail winds in the market that allowed all 51 stocks in the portfolio to finish positive for the month, with 28 of those names being up double digits.
Tesla Inc (NADSAQ:TSLA) (1.66% weighting) was the largest percentage gainer for the fund with a whopping 46.27% move to the upside. We mentioned previously that TSLA now has shown four consecutive profitable quarters, so it is eligible for inclusion in the S&P 500, and that formal announcement came November 17, 2020. Because of the sheer size of the addition on December 21, there will probably be active managers and swing traders buying TSLA up into the addition waiting for Passive Indexers to put in their MOC orders on the 21st, generally creating more run up for the stock in front on inclusion
Boeing (NYSE:BA) (1.66% weighting) was the second largest percentage gainer in November with an eye popping 45.93% move higher. BA announced that the737 Max was finally cleared to fly again and that news coupled with the Covid vaccine news really shot the stock higher throughout the month after what has been a tumultuous year for the aircraft manufacturer that saw is shed almost 75% of its value between January 1 and March 20, but as of the close November 30 it was only down 35% for the year. Hope for a move from Work at Home to Recovery has also been pushing that whole sector slightly higher.
We also saw gains between 20.24% and 27.51% from Wells Fargo (WFC) at 27.511%(1.66% weighting), Chevron Inc (NYSE:CVX) at 25.44% (1.66% weighting), Booking.com (NASDAQ:BKNG)25.02% (1.66% weighting), Disney (NYSE:DIS)22.07% (1.66% weighting), T-Mobile (NASDAQ:TMUS) 21.33% (1.66% weighting), Fiserv (NASDAQ:FISV)20.65%(1.66% weighting),and JP Morgan (NYSE:JPM)20.24%(1.66% weighting),
While there were no losers for the month it is interesting to note that some of the smallest gainers were stocks that saw big moves behind the stay at home philosophy and Covid such as Proctor and Gamble NYSE:PG) 1.29%, Amgen Inc (NASDAQ:AMGN) 2.35%, Netflix (NASDAQ:NFLX) 3.14%, Home Depot (NYSE:HD) 4.01% and Gilead (NASDAQ:GILD) 4.33%.
November 2020 saw the Siren Divcon Leaders Dividend ETF (CBOE:LEAD), gain 10.37% versus the S&P 500 up 10.95%. Of the 55 stocks in the basket, only three had negative returns for the month, all of which were under 2%, while 52 stocks were up with 29 of those name increasing by more than 10%. LEAD is a very interesting product vis-à-vis its competitors. While LEAD has a slightly higher Expense Ratio at .43% and LEAD current Yield is around 1% , the performance numbers for YTD, 1 year and 3 years is greatly skewed in favor of LEAD. Using Bloomberg Data shows the following performance numbers:
|
|
LEAD
|
|
|
|
YTD
|
21.55%
|
|
|
|
1 YEAR
|
26.07%
|
|
|
|
3 YEARS
|
15.51%
|
|
|
While LEAD currently has just short of $39mm in AUM, its two largest competitors have over $40 Billion in AUM, with an almost identical fund around $8 Billion AUM. With a concentrated sales effort against just those shareholders alone, we believe that we can significantly increase the current AUM in LEAD.
American Express (NYSE:AXP) (1.44% weighting) was the best monthly performer with gains of 29.98%. Most of this can be attributed to the Covid-19 vaccine news, and the huge tailwinds that provides AXP. Specifically, when consumers run into financial difficulties (such as unemployment), they may have trouble paying their bills. This has the potential to cause a spike in loan delinquencies and eventual losses for banks, but the credit card lending industry tends to feel the pain worse than most. Think of it this way: If you were having trouble paying all of your bills, you’d probably make sure your mortgage or rent, your car loan, and other essentials were paid before your credit card bills. In fact, it’s not uncommon in tough times for credit card lenders to see default rates in the 10% or more range. The thought of putting the Covid crisis behind us in the next year leads to great hope fort AXP and other credit card companies to see delinquency rates fall and much higher pay rates on current inflated balances.
KLA Corp (NASDAQ:KLAC)( 2.24% weighting) KLA was the second best performer for the month with an impressive gain of 27.79%. November saw price targets raised multiple times for KLAC and broke above average analyst estimates multiple times during the month.
Ross Stores (NASDAQ:ROST)(1.47% weighting) and TJX Companies (NYSE:TJX)(1.53% weighting) were both large beneficiaries of the re-open trade with monthly gains of 26.24% and 25.02% respectively. These two off price retailers saw significant bumps with the vaccine news. ROST broke above analyst estimates early on November and continued its climb throughout the month. Both ROST and TJX appear set up to be early winners in a re-opening trade as off price retailers should see a bounce back before more expensive brands as consumers dig themselves out of the hole that 2020 put many people into.
Honeywell (NYSE:HON) (1.79% weighting) the Diversified Industrials company climbed 23.63% for the month, including an ex-div date during November. HON is a cash cow and continues to be a fiscally strong company giving us little fear of a dividend cut.
Skywork Solutions (NASDAQ:SWSK) (2.03% weighting) Skyworks was down -.08% for the month, following an earnings report early in November that destroyed expectations and guidance, but investors may have already been pricing in the busy holiday season for the prominent Apple supplier turning it into a “sell the news” scenario.
Rollins Inc (NYSE:ROL) (2.37% weighting) Rollins was down 1.16% for the month and completed a 3:2 stock split on November 10. The stock was a nice run into the split and a mild sell off after.
Baxter Intl (NYSE:BAX) (1.34% weighting) Baxter was the biggest loser for the fund during November shedding 1.93%. Baxter had announced a proposed $650mm Senior Notes Offering in late October and the stock has basically been treading water since. It currently has a gross yield of 1.29% and seems to be in a relatively flat trading pattern.
LEAD rebalances once a year, with the next rebalance occurring in December 2020.
Siren DIVCON Dividend Defender ETF (CBOE:DFND)was up 4.27% for the month of December. The fund allocates 75% long to securities which have a high probability of increasing their dividend and allocating 25% of the portfolio to shorting securities that have a high probability of decreasing their dividend. The fund is rebalanced once a year and the next rebalance will occur in December of 2020.
Three securities in LEAD, that overlap with DFND on the long side are Skywork Solutions (NASDAQ:SWSK) (2.80% weighting), Rollins Inc (NYSE:ROL) (3.28% weighting) and Baxter Intl (NYSE:BAX) (1.85% weighting) which were all marginally down for the month, while short positions such as NortonLifeLock Inc (NASDAQ:NLOK) (1.54% weighting) saw the stock drop 11.38% for the month, Avangrid Inc(NYSE:AGR) (2.10% weighting) was down 5.67% for the month and Progressive Corp (NYSE:PGR)(weighting 2.87%) was down 5.21% for the month resulting in unrealized gains for the fund.
Due to current monthly restructuring we will hold off on more discussions of DFND until later in the month.
November 2020 saw the Siren NASDAQ NexGen Economy ETF (NASDAQ:BLCN), gain 16.43% versus gains of 12.33% from the MSCI ACWI Net Total Return Index. BLCN has some impressive results since inception on January 17, 2018. As a Thematic fund focusing on companies in the global blockchain technology ecosystem BLCN is benchmarked to the MSCI ACWI Net Total Return Index as opposed to a large cap US Index like the S&P 500.
|
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BLCN
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MSCI ACWI
|
|
1 MONTH
|
16.43%
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12.33%
|
|
3 MONTH
|
7.97%
|
|
6.06%
|
|
6 MONTH
|
46.20%
|
|
22.29%
|
|
9 MONTH
|
60.98%
|
|
22.21%
|
|
YTD
|
51.49%
|
|
11.10%
|
|
1 YEAR
|
56.46%
|
|
15.01%
|
|
SINCE INCEPTION
|
65.75%
|
|
21.65%
|
The portfolio for BLCN is Passive and the index rebalances twice a year, giving the portfolio the ability to adjust twice a year to new entrants that score high enough on the Reality Shares Blockchain Economy Index, while negating a knee-jerk reaction to possible pseudo new entrants as a strategy with no restrictions may have.
For the month of November BLCN saw gains in 64 of the underlying stocks and losses in only 7 with the best performer in BLCN for the month of November being Caanan Inc (NYSE:CAN) (weighting:2.51%) CAN surged an unbelievable 129% for the month of November, it had been slowly trending up all month and really exploded as Bitcoin profits surged.
Banco Santander (NYSE:SAN)(weighting:1.70%) saw gains of 46.4% for the month on the back of the re-opening trade and its expanding international money transfer business.
Galaxy Digital Holdings (GLXY:CN)(weighting: 2.15%) saw gains of 43.75% for the month with releases of financial results for the three and nine month periods ending 9/30/2020, closed a $50mm PIPE deal and expanded its Crypto trading business with acquisitions of Drawbridge Lending and Blue Fire Capital.
ING Groep-ADR (NYSE:ING) (weighting:1.37%) was up 41.50% for November with strong results in early November and with increased fee income and continued operational cost control; net interest income declines due to liability margin pressure, subdued lending growth and negative foreign currency impact, and Result reflects significantly lower risk costs compared to 2Q2020, and impairments on our equity stake in TMB and on capitalized software.
Other gainers in the fund of over 35% for November include:
Signature Bank New York (NASDAQ:SBNY)(weighting:1.44%) up 38.95%
Square Inc (NYSE:SQ)(weighting:2.05%) up 36.21%
The biggest loser for the fund was Alibaba (NASDAQ:BABA)(weighting:1.36%) which crumbled 13.56% after the Ant Financial IPO was postponed and amid regulatory concerns in China. The bad news on the Ant Financial and regulatory front was too much even for another record Singles Day to keep BABA in the green for the month.
We are very excited to have the three new funds under the Siren ETF Trust umbrella and look forward to more actives updates on all four funds as we move forward. SPQQ Holdings are subject to change on a quarterly basis. BLCN holdings are subject to change on a semi-annual basis. DFND and LEAD holdings are subject to change on an annual basis. The mention of any security should not be construed as a recommendation to buy or sell a security.
Past performance is not an indication of future performance. All holdings are subject to change.
Shares of the Funds are bought and sold at market price (not NAV) throughout the day on the exchange. There can be no assurance that an active trading market for shares of a fund will develop or be maintained. Transactions in shares of ETFs could result in brokerage commissions and generate tax consequences.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus and summary prospectus. Please read the prospectus and summary prospectus carefully before you invest. To obtain a fund summary prospectus, if available, or prospectus, call 855-713-3837 or download and review the prospectus.
An investment in the Funds is subject to risk, including the possible loss of principal amount invested. The risks associated with each Fund include the risks associated with the underlying securities which can result in higher volatility, and are detailed in each Fund’s prospectus and on each Fund’s webpage. There is no guarantee that investment objectives will be achieved.
SRN Advisors, LLC is the Investment Advisor. FORESIDE FUNDS DISTRIBUTORS LLC is the distributor of the Fund and is not affiliated with SRN Advisors, LLC.
Market Commentary November 2020
November 20, 2020 the Siren ETF Trust closed their acquisition of three ETFs from Reality Shares, the Nasdaq NextGen Economy ETF (NASDAQ:BLCN), DIVCON Dividend Defender ETF (CBOE:DFND) and DIVCON Leaders Dividend ETF (CBOE:LEAD) All three acquired funds began trading on the same exchanges as Siren ETFs at the open of trading on Monday November 23, 2020. This closed out a deal originally agreed upon on March 2, 2020 and we couldn’t be more excited to bring these funds under the Siren umbrella. Like Siren Large Cap Blend ETF (NASDAQ:SPQQ), Reality Shares will continue to be Index Provider for all four funds and SRN Advisors, LLC will manage the funds per the Reality Shares Index guidelines. With the acquisition it bring total Assets Under Management for the Siren ETF Trust to over $250 million, as of November 30, 2020. We now can offer investors exposure to approximately 74% of the Nasdaq 100, and 45% of the S&P 500 through the blended ETF of SPQQ, a Blockchain focused fund in BLCN, and both dividend growers (LEAD) as well as a long/short dividend focus in DFND. We look forward to expanding our marketing efforts for all four funds during the next year and feel that the acquisition will allow us to leverage many opportunities for both the Siren ETF Trust and our investors.
November 2020 saw the Siren Large Cap Blend ETF (NASDAQ:SPQQ), gain 13.02% versus the S&P 500 up 10.95%. We saw some carry through of earnings season in a few of our names, and some terrific tail winds in the market that allowed all 51 stocks in the portfolio to finish positive for the month, with 28 of those names being up double digits.
Tesla Inc (NADSAQ:TSLA) (1.66% weighting) was the largest percentage gainer for the fund with a whopping 46.27% move to the upside. We mentioned previously that TSLA now has shown four consecutive profitable quarters, so it is eligible for inclusion in the S&P 500, and that formal announcement came November 17, 2020. Because of the sheer size of the addition on December 21, there will probably be active managers and swing traders buying TSLA up into the addition waiting for Passive Indexers to put in their MOC orders on the 21st, generally creating more run up for the stock in front on inclusion
Boeing (NYSE:BA) (1.66% weighting) was the second largest percentage gainer in November with an eye popping 45.93% move higher. BA announced that the737 Max was finally cleared to fly again and that news coupled with the Covid vaccine news really shot the stock higher throughout the month after what has been a tumultuous year for the aircraft manufacturer that saw is shed almost 75% of its value between January 1 and March 20, but as of the close November 30 it was only down 35% for the year. Hope for a move from Work at Home to Recovery has also been pushing that whole sector slightly higher.
We also saw gains between 20.24% and 27.51% from Wells Fargo (WFC) at 27.511%(1.66% weighting), Chevron Inc (NYSE:CVX) at 25.44% (1.66% weighting), Booking.com (NASDAQ:BKNG)25.02% (1.66% weighting), Disney (NYSE:DIS)22.07% (1.66% weighting), T-Mobile (NASDAQ:TMUS) 21.33% (1.66% weighting), Fiserv (NASDAQ:FISV)20.65%(1.66% weighting),and JP Morgan (NYSE:JPM)20.24%(1.66% weighting),
While there were no losers for the month it is interesting to note that some of the smallest gainers were stocks that saw big moves behind the stay at home philosophy and Covid such as Proctor and Gamble NYSE:PG) 1.29%, Amgen Inc (NASDAQ:AMGN) 2.35%, Netflix (NASDAQ:NFLX) 3.14%, Home Depot (NYSE:HD) 4.01% and Gilead (NASDAQ:GILD) 4.33%.
November 2020 saw the Siren Divcon Leaders Dividend ETF (CBOE:LEAD), gain 10.37% versus the S&P 500 up 10.95%. Of the 55 stocks in the basket, only three had negative returns for the month, all of which were under 2%, while 52 stocks were up with 29 of those name increasing by more than 10%. LEAD is a very interesting product vis-à-vis its competitors. While LEAD has a slightly higher Expense Ratio at .43% and LEAD current Yield is around 1% , the performance numbers for YTD, 1 year and 3 years is greatly skewed in favor of LEAD. Using Bloomberg Data shows the following performance numbers:
LEAD
YTD
21.55%
1 YEAR
26.07%
3 YEARS
15.51%
While LEAD currently has just short of $39mm in AUM, its two largest competitors have over $40 Billion in AUM, with an almost identical fund around $8 Billion AUM. With a concentrated sales effort against just those shareholders alone, we believe that we can significantly increase the current AUM in LEAD.
American Express (NYSE:AXP) (1.44% weighting) was the best monthly performer with gains of 29.98%. Most of this can be attributed to the Covid-19 vaccine news, and the huge tailwinds that provides AXP. Specifically, when consumers run into financial difficulties (such as unemployment), they may have trouble paying their bills. This has the potential to cause a spike in loan delinquencies and eventual losses for banks, but the credit card lending industry tends to feel the pain worse than most. Think of it this way: If you were having trouble paying all of your bills, you’d probably make sure your mortgage or rent, your car loan, and other essentials were paid before your credit card bills. In fact, it’s not uncommon in tough times for credit card lenders to see default rates in the 10% or more range. The thought of putting the Covid crisis behind us in the next year leads to great hope fort AXP and other credit card companies to see delinquency rates fall and much higher pay rates on current inflated balances.
KLA Corp (NASDAQ:KLAC)( 2.24% weighting) KLA was the second best performer for the month with an impressive gain of 27.79%. November saw price targets raised multiple times for KLAC and broke above average analyst estimates multiple times during the month.
Ross Stores (NASDAQ:ROST)(1.47% weighting) and TJX Companies (NYSE:TJX)(1.53% weighting) were both large beneficiaries of the re-open trade with monthly gains of 26.24% and 25.02% respectively. These two off price retailers saw significant bumps with the vaccine news. ROST broke above analyst estimates early on November and continued its climb throughout the month. Both ROST and TJX appear set up to be early winners in a re-opening trade as off price retailers should see a bounce back before more expensive brands as consumers dig themselves out of the hole that 2020 put many people into.
Honeywell (NYSE:HON) (1.79% weighting) the Diversified Industrials company climbed 23.63% for the month, including an ex-div date during November. HON is a cash cow and continues to be a fiscally strong company giving us little fear of a dividend cut.
Skywork Solutions (NASDAQ:SWSK) (2.03% weighting) Skyworks was down -.08% for the month, following an earnings report early in November that destroyed expectations and guidance, but investors may have already been pricing in the busy holiday season for the prominent Apple supplier turning it into a “sell the news” scenario.
Rollins Inc (NYSE:ROL) (2.37% weighting) Rollins was down 1.16% for the month and completed a 3:2 stock split on November 10. The stock was a nice run into the split and a mild sell off after.
Baxter Intl (NYSE:BAX) (1.34% weighting) Baxter was the biggest loser for the fund during November shedding 1.93%. Baxter had announced a proposed $650mm Senior Notes Offering in late October and the stock has basically been treading water since. It currently has a gross yield of 1.29% and seems to be in a relatively flat trading pattern.
LEAD rebalances once a year, with the next rebalance occurring in December 2020.
Siren DIVCON Dividend Defender ETF (CBOE:DFND)was up 4.27% for the month of December. The fund allocates 75% long to securities which have a high probability of increasing their dividend and allocating 25% of the portfolio to shorting securities that have a high probability of decreasing their dividend. The fund is rebalanced once a year and the next rebalance will occur in December of 2020.
Three securities in LEAD, that overlap with DFND on the long side are Skywork Solutions (NASDAQ:SWSK) (2.80% weighting), Rollins Inc (NYSE:ROL) (3.28% weighting) and Baxter Intl (NYSE:BAX) (1.85% weighting) which were all marginally down for the month, while short positions such as NortonLifeLock Inc (NASDAQ:NLOK) (1.54% weighting) saw the stock drop 11.38% for the month, Avangrid Inc(NYSE:AGR) (2.10% weighting) was down 5.67% for the month and Progressive Corp (NYSE:PGR)(weighting 2.87%) was down 5.21% for the month resulting in unrealized gains for the fund.
Due to current monthly restructuring we will hold off on more discussions of DFND until later in the month.
November 2020 saw the Siren NASDAQ NexGen Economy ETF (NASDAQ:BLCN), gain 16.43% versus gains of 12.33% from the MSCI ACWI Net Total Return Index. BLCN has some impressive results since inception on January 17, 2018. As a Thematic fund focusing on companies in the global blockchain technology ecosystem BLCN is benchmarked to the MSCI ACWI Net Total Return Index as opposed to a large cap US Index like the S&P 500.
BLCN
MSCI ACWI
1 MONTH
16.43%
12.33%
3 MONTH
7.97%
6.06%
6 MONTH
46.20%
22.29%
9 MONTH
60.98%
22.21%
YTD
51.49%
11.10%
1 YEAR
56.46%
15.01%
SINCE INCEPTION
65.75%
21.65%
The portfolio for BLCN is Passive and the index rebalances twice a year, giving the portfolio the ability to adjust twice a year to new entrants that score high enough on the Reality Shares Blockchain Economy Index, while negating a knee-jerk reaction to possible pseudo new entrants as a strategy with no restrictions may have.
For the month of November BLCN saw gains in 64 of the underlying stocks and losses in only 7 with the best performer in BLCN for the month of November being Caanan Inc (NYSE:CAN) (weighting:2.51%) CAN surged an unbelievable 129% for the month of November, it had been slowly trending up all month and really exploded as Bitcoin profits surged.
Banco Santander (NYSE:SAN)(weighting:1.70%) saw gains of 46.4% for the month on the back of the re-opening trade and its expanding international money transfer business.
Galaxy Digital Holdings (GLXY:CN)(weighting: 2.15%) saw gains of 43.75% for the month with releases of financial results for the three and nine month periods ending 9/30/2020, closed a $50mm PIPE deal and expanded its Crypto trading business with acquisitions of Drawbridge Lending and Blue Fire Capital.
ING Groep-ADR (NYSE:ING) (weighting:1.37%) was up 41.50% for November with strong results in early November and with increased fee income and continued operational cost control; net interest income declines due to liability margin pressure, subdued lending growth and negative foreign currency impact, and Result reflects significantly lower risk costs compared to 2Q2020, and impairments on our equity stake in TMB and on capitalized software.
Other gainers in the fund of over 35% for November include:
Signature Bank New York (NASDAQ:SBNY)(weighting:1.44%) up 38.95%
Square Inc (NYSE:SQ)(weighting:2.05%) up 36.21%
The biggest loser for the fund was Alibaba (NASDAQ:BABA)(weighting:1.36%) which crumbled 13.56% after the Ant Financial IPO was postponed and amid regulatory concerns in China. The bad news on the Ant Financial and regulatory front was too much even for another record Singles Day to keep BABA in the green for the month.
We are very excited to have the three new funds under the Siren ETF Trust umbrella and look forward to more actives updates on all four funds as we move forward. SPQQ Holdings are subject to change on a quarterly basis. BLCN holdings are subject to change on a semi-annual basis. DFND and LEAD holdings are subject to change on an annual basis. The mention of any security should not be construed as a recommendation to buy or sell a security.
Past performance is not an indication of future performance. All holdings are subject to change.
Shares of the Funds are bought and sold at market price (not NAV) throughout the day on the exchange. There can be no assurance that an active trading market for shares of a fund will develop or be maintained. Transactions in shares of ETFs could result in brokerage commissions and generate tax consequences.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus and summary prospectus. Please read the prospectus and summary prospectus carefully before you invest. To obtain a fund summary prospectus, if available, or prospectus, call 855-713-3837 or download and review the prospectus.
An investment in the Funds is subject to risk, including the possible loss of principal amount invested. The risks associated with each Fund include the risks associated with the underlying securities which can result in higher volatility, and are detailed in each Fund’s prospectus and on each Fund’s webpage. There is no guarantee that investment objectives will be achieved.
SRN Advisors, LLC is the Investment Advisor. FORESIDE FUNDS DISTRIBUTORS LLC is the distributor of the Fund and is not affiliated with SRN Advisors, LLC.
Don’t Stop Here
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Market Commentary August 2020
We saw some carry through of earnings season in a few of our names, but overall 16 of our names were up more than 10% and only 4 were down more than 1%, with 43 names gaining, 6 losing and one being dead flat.