Sweet #MAGA (TWTW – July 17-21, 2017)

Sweet #MAGA – Or … Sweet Nothing, which seems to be what the Administration has accomplished thus far on numerous fronts… Oh well, at least a weaker USD provides a window for the FED to continue to hike rates, even if Janet Yellen remains a perma Dove, and US stocks continue to do rather well, overpriced or not …

  • Last week saw JPM’s Jamie Dimon rail against inertia on his bank’s earnings call with analyst – this week saw his competitors report theirs (BAC, GS, MS), also coming short on the trading side of the equation. Seems low volatility isn’t good for everyone …
  • GE – did better on revenues and earnings, but with guidance lowered to end of earlier eps range, the stock ended the week lower (and is off sharply thus far in 2017, while the S&P500 is up smartly … Not a great Immelt legacy!)
  • Canadian Finance Minister Bill Morneau – Suggested Warren Buffett’s investment in Home Capital Group was helped by discussion he and PM had with the Oracle of Omaha in June in Seattle…
  • Canadian Housing – The pullback continues, with June sales levels down further, and prices off as well. Transitory adjustment? Or beginning of something more fundamental? That, and the absence of meaningful inflation can be expected to come into the decision making process at the BoC regarding further hikes from here (although expecting a hike in  October – the removal of that earlier 2nd “insurance” cut, probably still makes sense…)
  • USD weakness – Since March estimated by economists at Morgan Stanley, to be equivalent to 100-125 bps of FED easing
  • Q2 EPS – with reporting season in the US in full swing, the numbers are coming in ahead of earlier lowered expectations – something which incidentally, the weaker USD can contribute to further assist with …
  • FED – The FOMC meets this coming week, with expectations at unchanged.
  • The Administration – President Trump is apparently studying the inner mechanics of “pardons”, all the while his press secretary Sean Spicer quit Friday, upset by the appointment of new communication director Anthony Scaramucci and the discussion in Washington now revolves around whether Trump will fire special prosecutor Mueller as the latter crosses the “red line” Trump has drawn in relation to what is and isn’t off limits for the investigation into possible Russian interference / Trump camp collusion with the Russians in last November’s elections.

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 0.13% PXG RAFI Global Fundamental -1.01% VCN FTSE Canada All Cap Index ETF 0.00%
XIC S&P/TSX Capped Composite 0.00% PXS RAFI US Fundamental Index -0.70% VCE FTSE Canada Index ETF 0.03%
CRQ RAFI CDN Fundamental 0.07% QQC/F NASDAQ 100 CAD Hedged 1.26% VUN CRSP US Total Market Index Unhedged -0.28%
XSP S&P 500 CAD Hedged 0.54% PZC RAFI CDN Small-Mid Fundam 0.72% VSP S&P 500 CAD Hedged 0.53%
XUS S&P500 -0.34% VXC FTSE All-World Ex Canada Index ETF -0.33%
XMU MSCI Min Vol US -0.12% XXM/b Morningstar US Value (Unh) -0.12% VEF FTSE Developed ex North-Am CAD H -0.43%
CLU RAFI US Fund 1000 CAD H 0.03% YXM/b Morningstar US Momentum (Unh) -0.38% VDU FTSE Developed ex North-America -0.54%
XSU Russell 2000 CAD Hedged 0.46% FXM Morningstar CDN Value -0.49% VE FTSE Developed Europe -1.03%
XIN MSCI EAFE CAD Hedged -0.63% WXM Morningstar CDN Momentum -0.60% VA FTSE Developed Asia Pacific 0.38%
XEH MSCI Europe IMI CAD H -0.87% VXM/b Morningstar Intl Value (Unh) -0.50% VEE FTSE Emerging Mkts -0.74%
XEC MSCI EM IMI -0.31% ZXM/b Morningstar Intl Momentum (Unh) 0.83% HAZ Active Global Dividends -0.55%
XMM MSCI Min Vol Emerging -0.72% RWE MSCI Europe Low Risk Weighted (H) -0.23% HHF Morningstar Hedge Fund Index 0.96%
CWO RAFI Broad Emerging -0.92% HMF Auspice Managed Futures 0.72%
CJP RAFI Fundam Japan CAD H 0.48% ZDJ Dow Jones CAD Hedged -0.46% HAC Seasonal Rotation 0.43%
CDZ CDN Div Aristocrats -0.27% ZEQ MSCI Europe High Quality CAD H -0.45% HPR Active Preferred Shares 0.11%
week of: July 17-21, 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 0.07% VXM/b Morningstar Intl Value (Unh) -0.50% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF -0.27%
CLU RAFI US Fund 1000 CAD H 0.03% XXM/b Morningstar US Value (Unh) -0.12% XHU iShares US High Dividend Equity Index ETF -0.78%
CJP RAFI Fundam Japan CAD H 0.48% FXM Morningstar CDN Value -0.49% VGG Vanguard US Dividend Appreciation Index ETF -0.87%
CWO RAFI Broad Emerging -0.92% XCV iShares Canadian Value Index ETF 0.04% CUD iShares US Dividend Growers Index ETF CAD-Hedged 0.70%
PXG RAFI Global Fundamental -1.01% VVL Vanguard Global Value Factor Etf -0.94%
PZC RAFI CDN Small-Mid Fundam 0.72% Momentum:
YXM/b Morningstar US Momentum (Unh) -0.38%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) 0.83%
VVO Vanguard Global Minimum Volatility Etf 0.65% WXM Morningstar CDN Momentum -0.60% Multi-Factors:
XMW MSCI Min Vol World 0.00% VMO Vanguard Global Momentum Factor Etf -0.34% XFC iShares Edge MSCI Multifactor Canada Index ETF -0.87%
XMI MSCI Min Vol EAFE 0.03% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF -0.34%
XMM MSCI Min Vol Emerging -0.72% VLQ Vanguard Global Liquidity Factor Etf -0.87% XFI iShares Edge MSCI Multifactor EAFE Index ETF -0.66%
XMU MSCI Min Vol US -0.12% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada -0.10% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF -0.45% RWE First Asset MSCI Europe Low Risk Weighted ETF -0.23%
week of: July 17-21, 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 -0.19%
EXGG Excel Global Growth Asset Allocation Etf -0.21% HAC Horizons Seasonal Rotation ETF 0.43%
EXGB Excel Global Balanced Asset Allocation Etf -0.04% HRA Horizons Global Risk Parity ETF 0.80%
HHF Horizons Morningstar Hedge Fund Index ETF 0.96%
DWG PowerShares DWA Global Momentum Index ETF -0.23%
HMA Horizons Managed Multi-Asset Momentum ETF 0.00%
XTR iShares Diversified Monthly Income ETF 0.18% XGR iShares Growth Core Portfolio Builder Fund 0.04%
FIE iShares Canadian Financial Monthly Income ETF -0.41% XCR iShares Conservative Core Portfolio Builder Fund 0.00%
ZMI BMO Monthly Income ETF -0.19% XGC iShares Global Completion Portfolio Builder Fund 0.26%
CBD iShares Balanced Income CorePortfolio Index ETF 0.27% FUT First Asset US Tactical Sector Allocation Index ETF 0.32%
ETP First Trust Global Risk Managed Income Index ETF 0.10% PRP Purpose Conservative Income Fund -1.12%
CBN iShares Balanced Growth CorePortfolio Index ETF -0.15%
XAL iShares Alternatives Completion Portfolio Builder Fund 0.25%
week of: July 17-21, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

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Weekly Volumes for the week of July 17-21, 2017:

weekly volume data:
Total Volume non-leveraged $4,566,921,400
top 10 Volume non leveraged $1,806,060,542
Total Volume leveraged $1,258,639,707
top 5 Volume leveraged $867,550,840
Total Volumes overall: $5,825,561,107
Top 10 + Top 5: $2,673,611,382
top 10 non leveraged % of total nl: 39.5%
top 5 leveraged % of total leveraged 68.9%
Top 10 + Top 5 as % of total traded: 45.9%

Recent volumes:

volumes week ending July 21, 2017

iShares – Mateos y Lago: The Central Bank with a different problem

BlackRock Institute: Mid-Year 2017 Investment Outlook => Click HERE!

Vanguard –  5 Questions for Vanguard’s new President => Click HERE!

Vanguard’s 5th annual Symposium Toronto – Investment Executive’s Jade Hemeon’s takeaways on the event => click HERE!

A few worthwhile takeaways for me:

  • US: review of post election results to present: bump has stuck in stock market level, but as far as economy getting a sustainable bump, don’t hold your breath
  • Spreads in Corporates are tight as they get, with future returns barely – if – in the positive = any episode of stock market volatility will see that transmitted to corporate bonds – particularly of the HY persuasion
  • Best predictor of performance – costs going in, and turnover – period

First Asset – Conversion to Common Class – the ratios associated with the conversion => Click HERE!

Horizons – Amazing to me that in a country where real estate markets are said to have been in part at least – Vancouver, Toronto – inflated by Chinese investors’ money, we are looking at a China Dividend ETF (HCN), a High Yield Dividend ETF at that (in an environment where – correct me if I am wrong, but folks have been piling into dividend ETF solutions … ) and this one, a year and a half in has less than CAD 6MM in AUM. Whaaat?

On another front though – of the MJ legalization kind – interestingly, it would appear that “shorts” have had a hand in getting the AUM levels to where they currently stand (which they reach in very short order post inception …). How so? It takes creations to be able to short. Why would anyone “short”such a promising “theme”? For those with skin in the game – aka future public cos involved in the space – it seems HMMJ has become a way to hedge their exposure, if, and when nervous about … valuations. Perhaps a way of seeking to solely be long their own firm’s alpha, while removing the sector’s beta market risk…

Evolve – Files for 5 additional ETFs => Click HERE! Gender diversity, Cyber security, automotive innovation, enhanced yield US banks and Global Healthcare, here we come … Could it be, with the 33% covered call on EW US Banks, Evolve is actually seeking to borrow a page from BMO’s playbook re: ZEB and ZWB? Will it gain traction? 

TMX – Marking the 500+ ETF listed point on the TSX => click HERE

ETFinsight – Mid-July 2017 flows: Summer Lulls … Flows were quasi non existent in the first half of July … => Click HERE!

10 ETFs I’d get rid of– and no, I don’t own any of them…

respectively a further 10 that we shouldn’t be too surprised to see disappear, if they did => Click HERE!

How will the various factors fare in H2? Which one will come to dominate?

BlackRock suggests favoring momentum as low volatility here to stay, which in a synchronized growth environment, should lend momentum further … momentum.

MSCI – Highlighted the fact that Quality was getting up there as far as the top in terms of valuations … => Click HERE!


Top and Bottom performing ETFs for the week of July 17-21 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of July 17-21, 2017
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF 3.85% $9.11 1,012,216 $9,225,475
HUZ CN Equity Horizons Silver ETF 3.24% $9.11 26,441 $239,972
SVR CN Equity iShares Silver Bullion ETF 2.82% $8.99 59,159 $529,365
FSR CN Equity First Trust Dorsey Wright U.S. Sector Rotation Index ETF CAD-Hedged 2.75% $21.27 23,766 $505,068
XGD CN Equity iShares S&P/TSX Global Gold Index ETF 2.39% $11.92 4,682,740 $55,963,297
HUG CN Equity Horizons Gold ETF 2.30% $11.45 38,778 $444,470
HEP CN Equity Horizons Enhanced Income Gold Producers ETF 2.15% $24.01 46,376 $1,111,791
MXF CN Equity First Asset Can-Materials Covered Call ETF 1.91% $13.84 20,607 $285,865
CGL CN Equity iShares Gold Bullion ETF 1.87% $10.81 309,600 $3,343,083
ZGD CN Equity BMO S&P/TSX Equal Weight Global Gold Index ETF 1.73% $9.38 51,643 $485,277
Bottom Performers
XGI CN Equity iShares S&P Global Industrials Index ETF CAD-Hedged -1.61% $30.90 14,613 $451,904
EUR CN Equity First Trust AlphaDEX European Dividend Index ETF CAD-Hedged -1.66% $22.75 119,476 $2,725,821
XID CN Equity iShares India Index ETF -1.78% $33.96 42,720 $1,452,982
ZUB CN Equity BMO Equal Weight US Banks Hedged to CAD Index ETF -2.03% $26.31 1,061,319 $27,898,327
ZIN CN Equity BMO S&P/TSX Equal Weight Industrials Index ETF -2.06% $23.97 34,312 $823,000
HUC CN Equity Horizons Crude Oil ETF -2.28% $10.51 51,857 $546,201
EHE CN Equity Wisdomtree Europe Hedged Equity Index ETF -2.31% $25.31 110,892 $2,819,490
ZBK CN Equity BMO Equal Weight US Banks Index ETF -3.03% $23.46 734,620 $17,193,290
DFU CN Equity Desjardins USA Multifactor-Controlled Volatility ETF -5.40% $19.64 155,503 $3,064,814
HUV CN Equity BetaPro S&P 500 VIX Short-Term Futures ETF -6.40% $8.12 77,009 $631,998

Top Performing ETFs – Seeing Gold and related Cos ETFs dominate the performance charts for the week – a combination of: benefiting from a weaker USD, respectively less perceived risk regarding the FED on the rate hike front? a rebound from earlier weakness, and/or an early entry into the seasonal Gold trade, which typically sees the sector far well in late August and September?

Bottom Performing ETFs – Notable further weakness on the part of US banks, alongside European ETFs, and Industrials, the latter negatively impacted by GE’s continued weakness and exceedingly poor relative performance …


Last week’s Sector Performance:

CDN banks outperforming US ones, Utes in the black; Energy and Materials slightly to the positive …

Negative:  industrials – a red flag?

sector performance week ending july 21, 2017


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