ECAM ETF Trading Strategy FAQ's
Below are some of the frequently asked questions. If you require more in-depth information it is recommended to consult an investment or tax professional in your home country and/or your country of residence.
Q: Could you just confirm – is this investment option for EK Provident Fund assets or is it intended as an additional investment option outside of the EK Provident fund?
A: No, this has nothing to do with Emirates/the Emirates Group Provident Scheme (EGPS). The impetus for us offering such a strategy has come from a number of our clients who have their own brokerage accounts and have requested an alternative trading strategy to augment/improve returns relative to their EGPS and other accounts they may have. As such, this type of strategy should only be used as part of a total portfolio management strategy.
Q: I use Interactive Brokers for my own investments, but try to invest in non-US domiciled ETFs. This reduces inheritance tax on US based assets over $60k. Can you use this program using European-domiciled UCITS instead of US based ETFs?
A: Yes, we have provided a list of alternative UCITS for those who wish to avoid investing in the US-domicile ETFs. Note the selected alternatives may not exactly match the performance of the underlying ETF strategy returns.
Q: Can you tell me the pros/cons of investing in US based ETFs as opposed to non-US UCITS
A: This is a very broad topic that spans residency, citizenship and country tax considerations. Likely the best way to understand the implications of investing in US-domiciled ETFs as a US non-citizen/non-resident is to use an Artificial Intelligence Agent (we typically use Grok) to get broad-based answers to the below questions (you can cut/paste the questions below into your chosen AI agent as necessary).
If in doubt, consult a tax professional in your chosen location.
Q: I had a query regarding how to invest in ETF's using this strategy; Do you sell all previously invested ETF's into the new trend leader, or is it only for future contributions?
A: There are no “future contributions”; only trades from one ETF to another ETF. Only the single top trend leader is selected within the Full model or the basic model.
Q: How do I handle additional funding into the ETF? Is there a specific rule with your system to when it is best to add funds, or can I setup a fixed recurrent monthly payment valid until you send us an email with the ETF leader change?
A: This is a trading program where 100% of the investment capital in the brokerage account is moved into the trend leader. There is no "dollar-cost-averaging". The selected trend leader could be in place for 1 day or 250 days; it entirely depends upon market conditions.
Q: When we receive the leader change, as today, we directly sell 100% of the present active ETF and right away purchase the 100% of the new suggested one?
A: Yes
Q: Or do we need to wait an additional email from your side to action the sell/buy?
A: No. When I send out an update, the new ETF is valid as of that day. There are no further updates.
Q: Some of the ticker symbols on the excel spreadsheet are not listed on your ECAM website as part of the ETF universe. Examples XLC, TLT, TYD. Are these tickers still part of the universe or no longer?
A: The tickers for the sector backstop are not shown on the main display. They reside as a sub-index within the "SSTOP Sector Backstop DD" to save space. If/when the SSTOP becomes the trend leader, it selects the trend leader within its sub-index. Below are the tickers. You will note QQQ is included in both the main ETF selections and the sector selections as it works well as a "transition" selection when going from the primary ETFs into the sector backup ETFs.
• XLB
• XLE
• XLK
• XLV
• XLY
• XLP
• IAU
• DBC
• IEI
• ICSH
• QQQ
• XLRE
The same principle applies to the bear market strategy if/when it becomes active. Below are the tickers within the strategy:
• IEF-
• GLD-
• SPY
• SPYG
• TOTL
• HYS
• BLV-
• CORP-
• SH-
• MYY-
• DOG-
• HYG-
Q: Some of the tickers have a minus symbol – after them in the spreadsheet such as QQQ-, SH-, HYG-. What does this signify?
A2: ETFs are a fairly new investment vehicle with varied data histories, so excluding "newer ETFs" can have a profound effect on examining longer term back tested results. For example, if you are modeling a trading strategy with the original 9 SPDR sector ETFs and you want to see if additional safety is afforded by adding either IEF or TLT (treasury fund ETFs) to the strategy, you will quickly note that neither of these ETFs has data that extends back past mid-2002 and thus they cannot model strategy performance during the 2000-2003 bear market.
To alleviate this issue and determine how the strategy would be performed before the 2000 tech-wreck (our dataset goes back to 1995), it is necessary to substitute the ETF performance with a closely aligned mutual fund that was in actually in place prior to the ETF. Below is the data for the backdated ETFs with the extension mutual fund/extension methodology shown in the right column.
A: No, this has nothing to do with Emirates/the Emirates Group Provident Scheme (EGPS). The impetus for us offering such a strategy has come from a number of our clients who have their own brokerage accounts and have requested an alternative trading strategy to augment/improve returns relative to their EGPS and other accounts they may have. As such, this type of strategy should only be used as part of a total portfolio management strategy.
Q: I use Interactive Brokers for my own investments, but try to invest in non-US domiciled ETFs. This reduces inheritance tax on US based assets over $60k. Can you use this program using European-domiciled UCITS instead of US based ETFs?
A: Yes, we have provided a list of alternative UCITS for those who wish to avoid investing in the US-domicile ETFs. Note the selected alternatives may not exactly match the performance of the underlying ETF strategy returns.
Q: Can you tell me the pros/cons of investing in US based ETFs as opposed to non-US UCITS
A: This is a very broad topic that spans residency, citizenship and country tax considerations. Likely the best way to understand the implications of investing in US-domiciled ETFs as a US non-citizen/non-resident is to use an Artificial Intelligence Agent (we typically use Grok) to get broad-based answers to the below questions (you can cut/paste the questions below into your chosen AI agent as necessary).
- I am a ________ citizen who currently resides in _________. Provide details on the tax implications of investing in US-domiciled ETFs.
- How is the estate tax calculated for non-US citizens who have ETF investments in the US?
- Is the amount of US estate tax reduced if the US domiciled ETFs are co-owned by my wife and I?
- What would be the US estate tax on my US owned ETFs if I was residing in my home country of ___________?
If in doubt, consult a tax professional in your chosen location.
Q: I had a query regarding how to invest in ETF's using this strategy; Do you sell all previously invested ETF's into the new trend leader, or is it only for future contributions?
A: There are no “future contributions”; only trades from one ETF to another ETF. Only the single top trend leader is selected within the Full model or the basic model.
Q: How do I handle additional funding into the ETF? Is there a specific rule with your system to when it is best to add funds, or can I setup a fixed recurrent monthly payment valid until you send us an email with the ETF leader change?
A: This is a trading program where 100% of the investment capital in the brokerage account is moved into the trend leader. There is no "dollar-cost-averaging". The selected trend leader could be in place for 1 day or 250 days; it entirely depends upon market conditions.
Q: When we receive the leader change, as today, we directly sell 100% of the present active ETF and right away purchase the 100% of the new suggested one?
A: Yes
Q: Or do we need to wait an additional email from your side to action the sell/buy?
A: No. When I send out an update, the new ETF is valid as of that day. There are no further updates.
Q: Some of the ticker symbols on the excel spreadsheet are not listed on your ECAM website as part of the ETF universe. Examples XLC, TLT, TYD. Are these tickers still part of the universe or no longer?
A: The tickers for the sector backstop are not shown on the main display. They reside as a sub-index within the "SSTOP Sector Backstop DD" to save space. If/when the SSTOP becomes the trend leader, it selects the trend leader within its sub-index. Below are the tickers. You will note QQQ is included in both the main ETF selections and the sector selections as it works well as a "transition" selection when going from the primary ETFs into the sector backup ETFs.
• XLB
• XLE
• XLK
• XLV
• XLY
• XLP
• IAU
• DBC
• IEI
• ICSH
• QQQ
• XLRE
The same principle applies to the bear market strategy if/when it becomes active. Below are the tickers within the strategy:
• IEF-
• GLD-
• SPY
• SPYG
• TOTL
• HYS
• BLV-
• CORP-
• SH-
• MYY-
• DOG-
• HYG-
Q: Some of the tickers have a minus symbol – after them in the spreadsheet such as QQQ-, SH-, HYG-. What does this signify?
A2: ETFs are a fairly new investment vehicle with varied data histories, so excluding "newer ETFs" can have a profound effect on examining longer term back tested results. For example, if you are modeling a trading strategy with the original 9 SPDR sector ETFs and you want to see if additional safety is afforded by adding either IEF or TLT (treasury fund ETFs) to the strategy, you will quickly note that neither of these ETFs has data that extends back past mid-2002 and thus they cannot model strategy performance during the 2000-2003 bear market.
To alleviate this issue and determine how the strategy would be performed before the 2000 tech-wreck (our dataset goes back to 1995), it is necessary to substitute the ETF performance with a closely aligned mutual fund that was in actually in place prior to the ETF. Below is the data for the backdated ETFs with the extension mutual fund/extension methodology shown in the right column.
Q: With regard to your ETF service, I’m just a little bit confused about how to allocate funds. Assuming I apply your full ECAM strategy, do I invest in EEM as it is the pick atm?
A: Yes, the last trend leader selection was EEM as of 19 November. The algorithm uses a number of inputs (including forward-walk progressive tuning which basically reviews past selections, learns how the selection performed, and then projects forward how the ETFs may perform in the future).
Q: And then when would i invest in the backstops? Would that be as directed by you?
A: No. The current single trend leader is chosen by reviewing the 6 main ETFs and the sector backstop (SSTOP Sector Backstop DD). It only chooses the single trend leader from this group. The SSTOP only becomes the trend leader if the other 6 core ETFs under-perform the SSTOP trend.
The tickers for the sector backstop are not shown on the main display. They reside as a sub-index within the "SSTOP Sector Backstop DD" to save space. If/when the SSTOP becomes the trend leader, it selects the trend leader within its sub-index. Below are the tickers. You will note QQQ is included in both the main ETF selections and the sector selections as it works well as a "transition" selection when going from the primary ETFs into the sector backup ETFs.
XLB
XLE
XLK
XLV
XLY
XLP
IAU
DBC
IEI
ICSH
QQQ
XLRE
Q: From what I understand, EEM, being a U.S.-domiciled ETF, distributes dividends that incur the standard 30% U.S. withholding tax. This is not an issue for capital gains, but it does affect dividend efficiency over time.
A: Correct. Non-US citizens/non-US residents who hold US brokerage accounts are required to file a W-8 BEN every 3 years to certify they are not US citizens and reside outside the US. Capital gains are tax-free but dividend/interest income are subject to a flat 30% withholding tax (subject to change if you reside in a country with a tax treaty).
This is not an issue for this type of trading program as the only focus is targeting capital gains; not dividend income. If by chance a distribution occurs during the period the ETF is being held, then that is a small inconvenient event. However, it must be pointed out any dividend typically paid on a growth ETF is typically quite low. As an example, the SPYG last quarterly dividend was $0.139/share. With the previous closing price of $104.58 prior to going ex-dividend, if this ETF were being held within a $500,000 account (4781 shares) , this would be a dividend of $665, of which $199 would be withheld and $465 paid out. It is really insignificant.
Q: Could you please clarify something? The system isn’t meant to add money regularly but only as a single 100% purchase into the new Leader when we receive your email information. After that, it remains unchanged until we switch to a new Leader and can add money again.
A1: Correct. It is always 100% invested in only the single trend leader within our ETF universe. If you were to add money to your brokerage account you could wait for the next signal change (which may take a lot of time; it entirely depends upon equity market performance and the trend leader) or invest in the trend leader.
Q: If that’s the case, where should I park the free cash, I allocate to this strategy until a new Leader switch is activated and I can add money to the system? Would a S&P500 be a good option? Or are there any other suggestions to optimize it?
A2: If you wanted to "park free cash" you should use a money market fund or short-term bond fund (the choice is up to you).
Q3: Do you offer separate long-term accumulation investment plans as part of your services? For example, I’d like to make monthly contributions to a system to complement my EK Provident fund, and as well as part of my daughter’s accumulation account.
A3: No, my plate is full. In addition to the ECAM service, I also provide investment consultancy services to corporate clients and have no further time to take on any more tasks.
A: Yes, the last trend leader selection was EEM as of 19 November. The algorithm uses a number of inputs (including forward-walk progressive tuning which basically reviews past selections, learns how the selection performed, and then projects forward how the ETFs may perform in the future).
Q: And then when would i invest in the backstops? Would that be as directed by you?
A: No. The current single trend leader is chosen by reviewing the 6 main ETFs and the sector backstop (SSTOP Sector Backstop DD). It only chooses the single trend leader from this group. The SSTOP only becomes the trend leader if the other 6 core ETFs under-perform the SSTOP trend.
The tickers for the sector backstop are not shown on the main display. They reside as a sub-index within the "SSTOP Sector Backstop DD" to save space. If/when the SSTOP becomes the trend leader, it selects the trend leader within its sub-index. Below are the tickers. You will note QQQ is included in both the main ETF selections and the sector selections as it works well as a "transition" selection when going from the primary ETFs into the sector backup ETFs.
XLB
XLE
XLK
XLV
XLY
XLP
IAU
DBC
IEI
ICSH
QQQ
XLRE
Q: From what I understand, EEM, being a U.S.-domiciled ETF, distributes dividends that incur the standard 30% U.S. withholding tax. This is not an issue for capital gains, but it does affect dividend efficiency over time.
A: Correct. Non-US citizens/non-US residents who hold US brokerage accounts are required to file a W-8 BEN every 3 years to certify they are not US citizens and reside outside the US. Capital gains are tax-free but dividend/interest income are subject to a flat 30% withholding tax (subject to change if you reside in a country with a tax treaty).
This is not an issue for this type of trading program as the only focus is targeting capital gains; not dividend income. If by chance a distribution occurs during the period the ETF is being held, then that is a small inconvenient event. However, it must be pointed out any dividend typically paid on a growth ETF is typically quite low. As an example, the SPYG last quarterly dividend was $0.139/share. With the previous closing price of $104.58 prior to going ex-dividend, if this ETF were being held within a $500,000 account (4781 shares) , this would be a dividend of $665, of which $199 would be withheld and $465 paid out. It is really insignificant.
Q: Could you please clarify something? The system isn’t meant to add money regularly but only as a single 100% purchase into the new Leader when we receive your email information. After that, it remains unchanged until we switch to a new Leader and can add money again.
A1: Correct. It is always 100% invested in only the single trend leader within our ETF universe. If you were to add money to your brokerage account you could wait for the next signal change (which may take a lot of time; it entirely depends upon equity market performance and the trend leader) or invest in the trend leader.
Q: If that’s the case, where should I park the free cash, I allocate to this strategy until a new Leader switch is activated and I can add money to the system? Would a S&P500 be a good option? Or are there any other suggestions to optimize it?
A2: If you wanted to "park free cash" you should use a money market fund or short-term bond fund (the choice is up to you).
Q3: Do you offer separate long-term accumulation investment plans as part of your services? For example, I’d like to make monthly contributions to a system to complement my EK Provident fund, and as well as part of my daughter’s accumulation account.
A3: No, my plate is full. In addition to the ECAM service, I also provide investment consultancy services to corporate clients and have no further time to take on any more tasks.