O’Canada (TWTW – June 26-30, 2017)

O’Canada – … And against the backdrop of a sharply ascending Loonie in June (+4.2% m/o/m vs the USD), Canada celebrates its 150th Birthday, eagerly anticipating what H2, 2017 will bring … which according to rising odds, first off entails a rate hike by the Bank of Canada.

This is a remarkable turn of events relative to previous expectations which had the Bank on hold for pretty much another year … Will Oil, which has had a rather painful June change the picture embraced by pundits, including David Rosenberg at Gluskin – that of an economy firming up further, respectively a domestic stock market poised to play catch-up?

And … Well said Bono: click HERE!

Recent Developments:

  • Oil – Are oil prices under pressure a threat to the earnings outlook?
  • Rates – Respectively is the fact that the yield curve has flattened a fair bit a concern regarding the growth outlook?
  • Activism – Targeted by an activist US shareholder, Nestle enacts massive share buyback ($27.4 Billion)
  • Regulatory – RBC will repay $21.8 Million to clients, in a no-contest settlement with the OSC, related to what amounts to double-dipping on fees
  • Crisis – Never again? “Would I say there will never, ever be another financial crisis? That would be going too far, but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be”. FED Chair Janet Yellen, speaking to risks of seeing a repeat of 2007-2009 Global Financial crisis.
  • Fine – EURO 2.42 Billion – the amount Google is being fined in Europe in relation to competition (or anti, rather) issues…
  • Healthy US Financials – 33 out of 34 banks – stress-tested in the US passed, leaving room for dividend increases, share buybacks, etc
  • Trade War? Postponed to Sept 25th – preliminary determination in case of Boeing versus Bombardier, arguing the latter has effectively dumped C Series in the US, damaging Boeing’s business.
  • Rate hike – Sharp rise (from 70-84)  – in the odds of seeing BoC Governor Stephen Poloz and his crew raise rates in July.
  • ETFs in Canada – AUM nearing CAD 131Billion, despite CAD strength as headwind for foreign exposure, with strong net inflows (+$3.1 Billion) overcoming negative market impact (-$1.85Billion) to contribute +$1.25 Billion to growth in the industry for June.

Latest market numbers as seen through ETFs providing exposure to the most commonly referred to benchmarks:

ticker name change ticker name change ticker name change
XIU S&P/TSX 60 -0.83% PXG RAFI Global Fundamental -0.63% VCN FTSE Canada All Cap Index ETF -0.71%
XIC S&P/TSX Capped Composite -0.78% PXS RAFI US Fundamental Index -2.26% VCE FTSE Canada Index ETF -0.65%
CRQ RAFI CDN Fundamental -0.27% QQC/F NASDAQ 100 CAD Hedged -2.63% VUN CRSP US Total Market Index Unhedged -2.71%
XSP S&P 500 CAD Hedged -0.65% PZC RAFI CDN Small-Mid Fundam 1.64% VSP S&P 500 CAD Hedged -0.53%
XUS S&P500 -2.90% VXC FTSE All-World Ex Canada Index ETF -2.42%
XMU MSCI Min Vol US -3.23% XXM/b Morningstar US Value (Unh) -1.72% VEF FTSE Developed ex North-Am CAD H -0.86%
CLU RAFI US Fund 1000 CAD H 0.39% YXM/b Morningstar US Momentum (Unh) -2.60% VDU FTSE Developed ex North-America -1.98%
XSU Russell 2000 CAD Hedged -0.03% FXM Morningstar CDN Value 0.71% VE FTSE Developed Europe -1.81%
XIN MSCI EAFE CAD Hedged -1.11% WXM Morningstar CDN Momentum -1.13% VA FTSE Developed Asia Pacific -2.33%
XEH MSCI Europe IMI CAD H -1.41% VXM/b Morningstar Intl Value (Unh) -0.98% VEE FTSE Emerging Mkts -2.12%
XEC MSCI EM IMI -2.39% ZXM/b Morningstar Intl Momentum (Unh) -2.66% HAZ Active Global Dividends -2.90%
XMM MSCI Min Vol Emerging -2.24% RWE MSCI Europe Low Risk Weighted (H) -2.57% HHF Morningstar Hedge Fund Index -1.96%
CWO RAFI Broad Emerging -1.59% HMF Auspice Managed Futures -3.70%
CJP RAFI Fundam Japan CAD H 0.75% ZDJ Dow Jones CAD Hedged -0.68% HAC Seasonal Rotation -0.64%
CDZ CDN Div Aristocrats -0.04% ZEQ MSCI Europe High Quality CAD H -2.82% HPR Active Preferred Shares 0.32%
week of: June 26-30, 2017 OVERALL Source: ETFinsight/Bloomberg

Respectively through available “FACTORS” (Smart or Strategic Beta) ETFs:

ticker name change ticker name change
RAFI: Value: Yield:
CRQ RAFI CDN Fundamental -0.27% VXM/b Morningstar Intl Value (Unh) -0.98% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF -0.04%
CLU RAFI US Fund 1000 CAD H 0.39% XXM/b Morningstar US Value (Unh) -1.72% XHU iShares US High Dividend Equity Index ETF -3.55%
CJP RAFI Fundam Japan CAD H 0.75% FXM Morningstar CDN Value 0.71% VGG Vanguard US Dividend Appreciation Index ETF -2.22%
CWO RAFI Broad Emerging -1.59% XCV iShares Canadian Value Index ETF -0.77% CUD iShares US Dividend Growers Index ETF CAD-Hedged -0.10%
PXG RAFI Global Fundamental -0.63% VVL Vanguard Global Value Factor Etf -0.16%
PZC RAFI CDN Small-Mid Fundam 1.64% Momentum:
YXM/b Morningstar US Momentum (Unh) -2.60%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) -2.66%
VVO Vanguard Global Minimum Volatility Etf -0.41% WXM Morningstar CDN Momentum -1.13% Multi-Factors:
XMW MSCI Min Vol World -3.45% VMO Vanguard Global Momentum Factor Etf -2.47% XFC iShares Edge MSCI Multifactor Canada Index ETF -0.30%
XMI MSCI Min Vol EAFE -2.99% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF -1.18%
XMM MSCI Min Vol Emerging -2.24% VLQ Vanguard Global Liquidity Factor Etf -1.68% XFI iShares Edge MSCI Multifactor EAFE Index ETF -1.89%
XMU MSCI Min Vol US -3.23% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada -0.90% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF -2.82% RWE First Asset MSCI Europe Low Risk Weighted ETF -2.57%
week of: June 26-30, 2017 FACTORS / SMART BETA / STRATEGIC BETA Source: ETFinsight/Bloomberg

Check out the above table: More Factors, including Multi Factors, as well as Individual Factors on a Global basis, with more individual ETF solutions presented.

As well as the table below – which captures the latest as far as weekly performance for ETFs managed by Strategists, respectively wrapping several ETFs in one to solve for Conservative, Balanced, or Growth objectives:

ticker name change ticker name change ticker name change
HGM Horizons Managed Global Opportunities ETF -2.96%
EXGG Excel Global Growth Asset Allocation Etf -2.13% HAC Horizons Seasonal Rotation ETF -0.64%
EXGB Excel Global Balanced Asset Allocation Etf -1.97% HRA Horizons Global Risk Parity ETF -1.48%
HHF Horizons Morningstar Hedge Fund Index ETF -1.96%
DWG PowerShares DWA Global Momentum Index ETF -2.60%
HMA Horizons Managed Multi-Asset Momentum ETF -1.91%
XTR iShares Diversified Monthly Income ETF -0.44% XGR iShares Growth Core Portfolio Builder Fund -1.16%
FIE iShares Canadian Financial Monthly Income ETF 0.28% XCR iShares Conservative Core Portfolio Builder Fund -1.92%
ZMI BMO Monthly Income ETF -1.45% XGC iShares Global Completion Portfolio Builder Fund -1.11%
CBD iShares Balanced Income CorePortfolio Index ETF -0.90% FUT First Asset US Tactical Sector Allocation Index ETF -1.89%
ETP First Trust Global Risk Managed Income Index ETF -0.81% PRP Purpose Conservative Income Fund -1.21%
CBN iShares Balanced Growth CorePortfolio Index ETF -0.74%
XAL iShares Alternatives Completion Portfolio Builder Fund -1.09%
week of: June 26-30, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

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Weekly Volumes for the week of June 26-30, 2017:

weekly volume data:
Total Volume non-leveraged $6,854,205,268
top 10 Volume non leveraged $3,324,087,564
Total Volume leveraged $1,705,053,754
top 5 Volume leveraged $1,147,992,880
Total Volumes overall: $8,559,259,022
Top 10 + Top 5: $4,472,080,444
top 10 non leveraged % of total nl: 48.5%
top 5 leveraged % of total leveraged 67.3%
Top 10 + Top 5 as % of total traded: 52.2%

volumes week ending june 30, 2017

iShares – Tucker: A few Reasons why many Financial Advisors love Bond ETFs.

Vanguard –  Analysis of Dividend-oriented strategies

First Asset – the A Series reaching their due date fairly soon …  see earlier press release (July 14th, 2007 targeted end date) => Click HERE

Horizons – HMMJ – confcall with Steven Hawkins: some notes from Caroline => Click HERE!

ETFinsight – Wisdom Tree: Moving away from … : More “Smart Beta” solutions for fixed income, at an aggressive price point which may explain the recent drop seen in XBB and XSB’s Management fees …

Aside from this, in terms of discussion with Kurt MacAlpine (head of global distribution for WisdomTree) – as WisdomTree nears the one year mark of their arrival in Canada – lots of ground work laid in terms of putting in place the necessary resources to support the strong growth his firm anticipates seeing here in Canada, with CRM2 amongst items noted as catalysts. Of interest for those looking at the currency-hedged versus unhedged side of the equation – WisdomTree has the next Gen version of what could be useful to you: Variably Hedged. What does that mean? A more dynamic element ie not a buy hedged or unhedged and forget about it, but rather an ETF where that decision to hedge or not is part of what the provider brings to you.

Evolve – preparing to enter an increasingly crowded ETF industry in our Great White North … For Globe and Mail article on Raj Lala’s latest venture, respectively comeback to the ETF space => Click HERE!

Top and Bottom performing ETFs for the week of June 26-30, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of June 26-30, 2017
CCX CN Equity Auspice Canadian Crude Oil Index ETF 10.24% $7.72 72,721 $570,370
HUC CN Equity Horizons Crude Oil ETF 5.82% $10.21 74,674 $763,966
ZUB CN Equity BMO Equal Weight US Banks Hedged to CAD Index ETF 4.03% $25.84 1,191,212 $30,915,633
ZMT CN Equity BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF 3.52% $9.54 106,025 $999,893
ZIC CN Equity BMO Mid-Term US IG Corporate Bond Index ETF 2.52% $19.15 1,920,938 $37,253,712
BANK CN Equity BMO Global Bank Hedged to CAD Index ETF 2.31% $20.22 36,073 $735,335
XBM CN Equity iShares S&P/TSX Global Base Metals Index ETF 2.07% $10.75 88,238 $948,542
HBG CN Equity Hamilton Capital Global Bank ETF 2.06% $21.07 35,539 $748,270
ZJO CN Equity BMO Junior Oil Index ETF 1.94% $11.96 110,362 $1,315,424
ZBK CN Equity BMO Equal Weight US Banks Index ETF 1.90% $23.92 369,508 $8,877,980
Bottom Performers
XIT CN Equity iShares S&P/TSX Capped Information Technology Index ETF -4.10% $15.26 291,935 $4,401,767
ZLI CN Equity BMO Low Volatility International Equity ETF -4.37% $23.27 181,712 $4,182,393
HXQ CN Equity Horizons NASDAQ 100 Index ETF -4.39% $41.62 8,802 $366,534
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF -4.63% $8.63 696,217 $6,039,277
ZGD CN Equity BMO S&P/TSX Equal Weight Global Gold Index ETF -4.83% $9.89 209,924 $2,105,793
FHQ CN Equity First Trust AlphaDEX US Technology Sector Index ETF -4.99% $28.84 21,431 $620,633
MXF CN Equity First Asset Can-Materials Covered Call ETF -5.02% $14.29 12,340 $174,409
HEP CN Equity Horizons Enhanced Income Gold Producers ETF -5.33% $24.81 48,858 $1,215,255
FHU CN Equity First Trust AlphaDEX US Utilities Sector Index ETF -5.41% $24.60 1,601 $39,608
XGD CN Equity iShares S&P/TSX Global Gold Index ETF -5.73% $12.51 6,750,671 $84,359,100

Top Performing ETFs – Decent gains in CCX, as oil capped an otherwise difficult period with a rebound. For the rest, US banks (better if hedged when CAD rises … ie ZUB outperforming ZBK) doing their on again off again performance gig – this time on the + side, likely hardened by the combination of passing stress tests, respectively rising rates …

Bottom Performing ETFs – On the Flipside, if unhedged CAD for Technology … losses look worse than they really were … and notably, several factors and sectors ETFs also saw their weekly performance detrimentally impacted by the Loonie’s new found strength…

Last week’s Sector Performance:

sector performance week ending june 30, 2017

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