Divergence (TWTW – Jul 31-Aug 4, 2017)

Divergence – While the Dow crossed the 22,000 level last week, Transports struggle, and as noted by pundits, many companies beating earnings and even guiding higher for 2017 aren’t being “rewarded” by the market post “beat”. A change of “fortunes” going forward? July Payrolls beat as well, and unemployment dipped to 4.3%. Room for further hikes by the FED this fall? That and the beginning of unwinding the Federal Reserve’s massive balance sheet could cause some hick-ups … I guess we’ll find out soon…

  • Devouring capitalism – really? Elliott Management founder Paul Singer – told his clients that ETFs are devouring capitalism => Click HERE! 

In case you are wondering, this seems to be along the same vein as the “ETFs are an instrument of Marxism” that came out last year. Personally, I prefer looking at every investment decision being an active decision – including going passive where it makes the most sense. And BTW – an awful lot of ETFs, nowadays are in fact not of the stripes Singer complains about, since with factors, ETF flows effectively go to stocks that “pass the test” of the Factors’ screens … Either way, yes, if everyone capitulated to the “let’s everyone be 100% passive 100% of the time” we would have a problem. But aren’t we rather some distance away from that?

  • Alan Greenspan – Former FED Chairman Greenspan opined that yes, there is a bubble … in the bond market … and when it bursts … watch out for its knock on effect on stocks, irrespective that … there isn’t a bubble in stocks (yet?)

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 1.23% PXG RAFI Global Fundamental 1.68% VCN FTSE Canada All Cap Index ETF 0.85%
XIC S&P/TSX Capped Composite 0.92% PXS RAFI US Fundamental Index 1.93% VCE FTSE Canada Index ETF 1.28%
CRQ RAFI CDN Fundamental 0.88% QQC/F NASDAQ 100 CAD Hedged -0.18% VUN CRSP US Total Market Index Unhedged 1.61%
XSP S&P 500 CAD Hedged 0.14% PZC RAFI CDN Small-Mid Fundam -0.15% VSP S&P 500 CAD Hedged 0.21%
XUS S&P500 1.90% VXC FTSE All-World Ex Canada Index ETF 2.19%
XMU MSCI Min Vol US 1.71% XXM/b Morningstar US Value (Unh) 0.06% VEF FTSE Developed ex North-Am CAD H 1.24%
CLU RAFI US Fund 1000 CAD H 0.26% YXM/b Morningstar US Momentum (Unh) 1.42% VDU FTSE Developed ex North-America 2.38%
XSU Russell 2000 CAD Hedged -1.25% FXM Morningstar CDN Value 0.56% VE FTSE Developed Europe 3.14%
XIN MSCI EAFE CAD Hedged 1.23% WXM Morningstar CDN Momentum 1.07% VA FTSE Developed Asia Pacific 2.37%
XEH MSCI Europe IMI CAD H 1.33% VXM/b Morningstar Intl Value (Unh) 2.40% VEE FTSE Emerging Mkts 2.46%
XEC MSCI EM IMI 2.07% ZXM/b Morningstar Intl Momentum (Unh) 2.02% HAZ Active Global Dividends 2.26%
XMM MSCI Min Vol Emerging 2.05% RWE MSCI Europe Low Risk Weighted (H) 1.80% HHF Morningstar Hedge Fund Index 1.09%
CWO RAFI Broad Emerging 1.93% HMF Auspice Managed Futures 0.00%
CJP RAFI Fundam Japan CAD H 1.30% ZDJ Dow Jones CAD Hedged 1.16% HAC Seasonal Rotation -0.05%
CDZ CDN Div Aristocrats 0.59% ZEQ MSCI Europe High Quality CAD H 1.48% HPR Active Preferred Shares 0.32%
week of: July 31-Aug 4, 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 0.88% VXM/b Morningstar Intl Value (Unh) 2.40% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF 0.59%
CLU RAFI US Fund 1000 CAD H 0.26% XXM/b Morningstar US Value (Unh) 0.06% XHU iShares US High Dividend Equity Index ETF 2.18%
CJP RAFI Fundam Japan CAD H 1.30% FXM Morningstar CDN Value 0.56% VGG Vanguard US Dividend Appreciation Index ETF 1.90%
CWO RAFI Broad Emerging 1.93% XCV iShares Canadian Value Index ETF 1.36% CUD iShares US Dividend Growers Index ETF CAD-Hedged 0.10%
PXG RAFI Global Fundamental 1.68% VVL Vanguard Global Value Factor Etf 2.07%
PZC RAFI CDN Small-Mid Fundam -0.15% Momentum:
YXM/b Morningstar US Momentum (Unh) 1.42%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) 2.02%
VVO Vanguard Global Minimum Volatility Etf 0.34% WXM Morningstar CDN Momentum 1.07% Multi-Factors:
XMW MSCI Min Vol World 2.01% VMO Vanguard Global Momentum Factor Etf 1.76% XFC iShares Edge MSCI Multifactor Canada Index ETF 0.18%
XMI MSCI Min Vol EAFE 2.74% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF 1.67%
XMM MSCI Min Vol Emerging 2.05% VLQ Vanguard Global Liquidity Factor Etf 1.37% XFI iShares Edge MSCI Multifactor EAFE Index ETF 2.31%
XMU MSCI Min Vol US 1.71% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada 1.02% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF 1.48% RWE First Asset MSCI Europe Low Risk Weighted ETF 1.80%
week of: July 31-Aug 4, 2017 FACTORS / SMART BETA / STRATEGIC BETA Source: ETFinsight/Bloomberg

Check out the above: 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 1.34%
EXGG Excel Global Growth Asset Allocation Etf 0.75% HAC Horizons Seasonal Rotation ETF -0.05%
EXGB Excel Global Balanced Asset Allocation Etf 0.71% HRA Horizons Global Risk Parity ETF 0.05%
HHF Horizons Morningstar Hedge Fund Index ETF 1.09%
DWG PowerShares DWA Global Momentum Index ETF 1.90%
HMA Horizons Managed Multi-Asset Momentum ETF 0.78%
XTR iShares Diversified Monthly Income ETF 0.53% XGR iShares Growth Core Portfolio Builder Fund 0.83%
FIE iShares Canadian Financial Monthly Income ETF 0.70% XCR iShares Conservative Core Portfolio Builder Fund 0.90%
ZMI BMO Monthly Income ETF 0.87% XGC iShares Global Completion Portfolio Builder Fund 0.86%
CBD iShares Balanced Income CorePortfolio Index ETF 0.69% FUT First Asset US Tactical Sector Allocation Index ETF 0.27%
ETP First Trust Global Risk Managed Income Index ETF 0.05% PRP Purpose Conservative Income Fund -0.30%
CBN iShares Balanced Growth CorePortfolio Index ETF 0.70%
XAL iShares Alternatives Completion Portfolio Builder Fund 0.64%
week of: July 31-Aug 4, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

Brought to you by: 

Weekly Volumes History to August 4, 2017:

volumes week ending August 4, 2017

iShares – Shores: Think Outside the Style Box

Vanguard –  Schlanger: Timing the Canadian Equity Market: a two-sided coin

Horizons – Q3 Advisor Survey: High level of Uncertainty but more bullish on Financials, respectively more guarded on Energy …

Reuters chat with CEO Steven Hawkins => Click HERE!

Top and Bottom performing ETFs for the week of July 31-August 4, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of Jul 31-Aug 4, 2017
XBZ CN Equity iShares MSCI Brazil Index ETF 4.36% $13.19 45,662 $600,953
ZBK CN Equity BMO Equal Weight US Banks Index ETF 4.26% $23.55 1,271,158 $29,686,709
FHB CN Equity First Asset European Bank ETF 3.67% $9.46 734,704 $7,016,295
ZID CN Equity BMO India Equity Index ETF 3.23% $22.83 167,743 $3,844,952
RPD CN Equity RBC Quant European Dividend Leaders ETF 3.18% $23.40 406,149 $9,399,377
VE CN Equity Vanguard FTSE Developed Europe All Cap Index ETF 3.14% $28.18 244,458 $6,895,929
HXX CN Equity Horizons Euro Stoxx 50 R Index Etf 3.10% $29.76 97,884 $2,915,873
ZDI CN Equity BMO International Dividend ETF 2.98% $22.51 325,511 $7,305,300
RID CN Equity RBC Quant EAFE Dividend Leaders ETF 2.89% $23.92 349,182 $8,267,051
XCH CN Equity iShares China Index ETF 2.84% $25.84 28,296 $725,437
Bottom Performers
XXM CN Equity First Asset Morningstar US Value Index ETF -1.84% $12.91 46,518 $599,131
HEP CN Equity Horizons Enhanced Income Gold Producers ETF -1.99% $24.52 130,297 $3,199,021
XCS CN Equity iShares S&P/TSX SmallCap Index ETF -2.19% $15.76 103,877 $1,643,190
SVR CN Equity iShares Silver Bullion ETF -2.29% $9.14 32,137 $292,828
ZGD CN Equity BMO S&P/TSX Equal Weight Global Gold Index ETF -2.43% $9.40 36,468 $344,393
HEE CN Equity Horizons Enhanced Income Energy ETF -2.53% $12.03 17,470 $207,962
ZJO CN Equity BMO Junior Oil Index ETF -2.58% $11.77 62,218 $734,112
ZJG CN Equity BMO Junior Gold Index ETF -3.63% $8.43 265,304 $2,240,546
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF -3.70% $9.21 628,527 $5,784,454
HNY CN Equity Horizons Natural Gas Yield ETF -4.53% $12.38 32,044 $394,283

Top Performing ETFs – Stronger than expected Payroll data likely provided a boost to US Banks, while also providing a reprieve to a USD that has been sagging rather badly of late. Seeing EM continue to do well, alongside Europe can be seen as reassuring if they are taking up the “baton” as far as leadership in the continuation of equity markets rallying since the March 2009 lows. That said, not everything can do well at the same time… IF US rates pick up, AND boost the USD, then EM which has benefited from benign conditions in 2017 could experience more turbulence… The remainder of 2017 could be bumpier than H1, IF balance sheet unwinding triggers any unexpected side effects…

Bottom Performing ETFs – Nat Gas – no love there this past week … Gold and related ETFs: ditto. As for HMMJ, which a week prior produced decent gains, this past week, it peeled some of these off. Volatility isn’t ominipresent, but it remains definitely a factor in the MJ square 🙂

Last week’s Sector Performance:

sector performance week ending august 4, 2017

Comments are closed.