Fire and Fury (TWTW – Aug 7-11, 2017)

Fire and Fury – Locked and Loaded … the rhetoric heated up significantly this past week, with President Trump signalling he wouldn’t tolerate North Korea making threats against US territory.  Not to be outdone (do we really need that? isn’t one potentially trigger happy leader enough?), North Korea’s leader Kim Jong Un responded by threatening Guam, where the US maintains a massive airbase home to B-1B nuclear capable bombers, which it deems a threat due to their frequent incursion in Korea’s airspace …

Latest Developments:

  • DoubleLine’s Jeffery Grundlach – Warns of overvaluation in Junk bonds and EM debt. “If you are waiting for a catalyst,  you will be selling at lower prices” – by week’s end, this looked rather prescient…
  • Inflation – or continued lack thereof a problem … not just in Canada, but also in the US.
  • Bridgewater Associates Founder Ray Dalio – Recommends investors allocate 5-10% to Gold in light of rising geopolitical tensions between US and N-Korea => Click HERE! 

“Two confrontational, nationalistic, and militaristic leaders playing chicken with each other, while the world is watching to see which one will be caught bluffing, or if there will be a hellacious war,” Dalio wrote.

  • Ten Years after … The onset of what would turn into the 2008/2009 Global Financial crisis crossed its 10th anniversary (the ECB extended emergency loans to banks on Aug 9, 2007), and in Canada, the ABCP market froze …
  • South Korea and Japan – warned North Korea against making good on its threat to fire missiles at Guam, while China expressed hopes that more would be done to alleviate the “tense situation and enhance mutual trust”. Presumably not “banking on that …” Japan has begun preparations to deploy Patriot Interceptors in Western regions – along the flight path of any missiles aimed toward Guam…
  • Valeant Pharma – Got hit following lowered revenue guidance for the year.

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 -1.52% PXG RAFI Global Fundamental -0.64% VCN FTSE Canada All Cap Index ETF -1.46%
XIC S&P/TSX Capped Composite -1.45% PXS RAFI US Fundamental Index -1.42% VCE FTSE Canada Index ETF -1.42%
CRQ RAFI CDN Fundamental -1.67% QQC/F NASDAQ 100 CAD Hedged -1.07% VUN CRSP US Total Market Index Unhedged -1.19%
XSP S&P 500 CAD Hedged -1.35% PZC RAFI CDN Small-Mid Fundam -0.40% VSP S&P 500 CAD Hedged -1.35%
XUS S&P500 -1.05% VXC FTSE All-World Ex Canada Index ETF -1.64%
XMU MSCI Min Vol US -0.35% XXM/b Morningstar US Value (Unh) -2.85% VEF FTSE Developed ex North-Am CAD H -2.55%
CLU RAFI US Fund 1000 CAD H -1.54% YXM/b Morningstar US Momentum (Unh) -0.32% VDU FTSE Developed ex North-America -1.80%
XSU Russell 2000 CAD Hedged -2.69% FXM Morningstar CDN Value -0.91% VE FTSE Developed Europe -2.00%
XIN MSCI EAFE CAD Hedged -2.71% WXM Morningstar CDN Momentum -1.39% VA FTSE Developed Asia Pacific -1.51%
XEH MSCI Europe IMI CAD H -2.76% VXM/b Morningstar Intl Value (Unh) -0.67% VEE FTSE Emerging Mkts -1.73%
XEC MSCI EM IMI -2.07% ZXM/b Morningstar Intl Momentum (Unh) -0.04% HAZ Active Global Dividends -0.70%
XMM MSCI Min Vol Emerging -1.14% RWE MSCI Europe Low Risk Weighted (H) -1.84% HHF Morningstar Hedge Fund Index -0.50%
CWO RAFI Broad Emerging -1.39% HMF Auspice Managed Futures 0.73%
CJP RAFI Fundam Japan CAD H -2.49% ZDJ Dow Jones CAD Hedged -0.85% HAC Seasonal Rotation 0.38%
CDZ CDN Div Aristocrats -1.20% ZEQ MSCI Europe High Quality CAD H -1.56% HPR Active Preferred Shares -1.79%
week of: Aug 7 – 11, 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 -1.67% VXM/b Morningstar Intl Value (Unh) -0.67% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF -1.20%
CLU RAFI US Fund 1000 CAD H -1.54% XXM/b Morningstar US Value (Unh) -2.85% XHU iShares US High Dividend Equity Index ETF -0.50%
CJP RAFI Fundam Japan CAD H -2.49% FXM Morningstar CDN Value -0.91% VGG Vanguard US Dividend Appreciation Index ETF -0.42%
CWO RAFI Broad Emerging -1.39% XCV iShares Canadian Value Index ETF -1.58% CUD iShares US Dividend Growers Index ETF CAD-Hedged -1.82%
PXG RAFI Global Fundamental -0.64% VVL Vanguard Global Value Factor Etf -2.43%
PZC RAFI CDN Small-Mid Fundam -0.40% Momentum:
YXM/b Morningstar US Momentum (Unh) -0.32%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) -0.04%
VVO Vanguard Global Minimum Volatility Etf -1.20% WXM Morningstar CDN Momentum -1.39% Multi-Factors:
XMW MSCI Min Vol World -0.19% VMO Vanguard Global Momentum Factor Etf -2.00% XFC iShares Edge MSCI Multifactor Canada Index ETF -1.53%
XMI MSCI Min Vol EAFE -1.10% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF -1.10%
XMM MSCI Min Vol Emerging -1.14% VLQ Vanguard Global Liquidity Factor Etf -1.55% XFI iShares Edge MSCI Multifactor EAFE Index ETF -0.22%
XMU MSCI Min Vol US -0.35% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada -1.32% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF -1.56% RWE First Asset MSCI Europe Low Risk Weighted ETF -1.84%
week of: Aug 7 – 11, 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 -0.09%
EXGG Excel Global Growth Asset Allocation Etf -0.66% HAC Horizons Seasonal Rotation ETF 0.38%
EXGB Excel Global Balanced Asset Allocation Etf -0.41% HRA Horizons Global Risk Parity ETF -0.50%
HHF Horizons Morningstar Hedge Fund Index ETF -0.50%
DWG PowerShares DWA Global Momentum Index ETF -1.35%
HMA #N/A #N/A
XTR iShares Diversified Monthly Income ETF -0.88% XGR iShares Growth Core Portfolio Builder Fund -0.32%
FIE iShares Canadian Financial Monthly Income ETF -1.66% XCR iShares Conservative Core Portfolio Builder Fund -0.34%
ZMI BMO Monthly Income ETF -0.68% XGC iShares Global Completion Portfolio Builder Fund -0.82%
CBD iShares Balanced Income CorePortfolio Index ETF -0.96% FUT First Asset US Tactical Sector Allocation Index ETF -1.08%
ETP First Trust Global Risk Managed Income Index ETF -0.31% PRP #N/A #N/A
CBN iShares Balanced Growth CorePortfolio Index ETF -1.63%
XAL iShares Alternatives Completion Portfolio Builder Fund -0.64%
week of: Aug 7 – 11, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

Brought to you by: 

iShares: Koesterich: Why investors are ignoring political dysfunction – for Now

Vanguard: 5 questions for Vanguard new CIO => Click HERE!

BMO ETFs: Dashboard as at July 31, 2017 => click HERE!

Announcement regarding Index Changes for 5 BMO ETFs => click HERE!

Horizons ETFs: Thackray’s Newsletter for August 2017: Risk still Exists … => click HERE!

WisdomTree: Adds “non-hedged” to European solutions toolkit => Click HERE!

First Asset – Sentry Select doesn’t have ETFs … but with CI Financial acquiring Sentry for $780MM in the quiet of summer … indirectly Sentry now does … have ETFs: First Asset’s!

and First Asset has got another avenue for AUM growth…

Will other Closed End fund shops be swallowed up? Will more conversions from CEFs to ETFs take place? If that were the case, it wouldn’t be too surprising – would it?

Other:

ETFinsight – Performance Highlights to Jul 31, 2017 => Click HERE!

Weekly Volumes History to August 11, 2017:

ETFinsight volumes week ending Aug 11, 2017

Top and Bottom performing ETFs for the week of Aug 7-11, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of Aug 7-11, 2017
HUV CN Equity BetaPro S&P 500 VIX Short-Term Futures ETF 23.18% $8.61 655,825 $5,772,796
ZJG CN Equity BMO Junior Gold Index ETF 4.74% $8.40 381,961 $3,209,175
SVR CN Equity iShares Silver Bullion ETF 4.58% $9.20 64,166 $591,171
HEP CN Equity Horizons Enhanced Income Gold Producers ETF 4.19% $24.56 41,821 $1,032,108
ZGD CN Equity BMO S&P/TSX Equal Weight Global Gold Index ETF 4.00% $9.41 138,885 $1,323,132
XGD CN Equity iShares S&P/TSX Global Gold Index ETF 3.49% $12.22 6,726,872 $82,634,962
HUG CN Equity Horizons Gold ETF 2.67% $11.75 862,447 $10,251,987
CGL CN Equity iShares Gold Bullion ETF 2.65% $11.08 1,071,800 $11,947,412
CGL/C CN Equity iShares Gold Bullion ETF 2.63% $14.24 35,038 $500,757
ZRR CN Equity BMO Real Return Bond Index ETF 1.89% $17.14 131,121 $2,237,955
Bottom Performers
EHE CN Equity Wisdomtree Europe Hedged Equity Index ETF -2.97% $24.92 363,460 $9,189,865
FHB CN Equity First Asset European Bank ETF -3.12% $9.49 700,518 $6,702,086
ZEO CN Equity BMO S&P/TSX Equal Weight Oil & Gas Index ETF -3.15% $10.33 1,921,291 $19,914,175
XIT CN Equity iShares S&P/TSX Capped Information Technology Index ETF -3.84% $14.72 197,806 $2,874,096
ZBK CN Equity BMO Equal Weight US Banks Index ETF -3.87% $23.67 250,718 $5,939,262
ZID CN Equity BMO India Equity Index ETF -4.00% $22.63 180,589 $4,126,775
ZUB CN Equity BMO Equal Weight US Banks Hedged to CAD Index ETF -4.06% $26.38 623,078 $16,503,069
XID CN Equity iShares India Index ETF -4.15% $34.15 52,256 $1,776,982
ZJO CN Equity BMO Junior Oil Index ETF -4.70% $11.33 26,628 $303,177
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF -6.48% $8.74 633,770 $5,557,055

Top Performing ETFs – And just as apparently some were returning to the being long the Inverse Volatility tools … Vol spiked rather spectacularly, courtesy heated rhetoric between the US and N-Korea. On the volume-front, the 2X Bull+ on the short term VIX led the leveraged ETFs trading volumes by a wide margin, while oil on the week remained relatively close to where it left off a week prior. As for Ray Dalio’s comment above – looking at the week’s top performers, they all – save for HUV and ZRR – have one thing in common: Gold. Will that continue?

Bottom Performing ETFs –Uncertainty on the Cannabis front, with the TMX’s Canada Depositary for Securities examining the subject of risks associated with settling trades in the burgeoning sector didn’t do HMMJ any favor this past week. The fear relates to Canadian listed stocks in the space with US operations, and what would happen, should the “Cole Memorandum” that has thus far dictated the relationship between the US Feds and individual States no longer prevails …

Elsewhere, evidently the prior week’s enthusiasm for US Bank stocks (in the wake of a stronger NFP print) has receeded this week, alongside prices in Energy stock ETFs. Will that prove temporary? Or is the lack of sufficient inflation – translating into reduced odds of further rake hikes – going to remain too much of a headwind for now for the “expanding NIM (Net Interest Margin) trade?

Last week’s Sector Performance:

ETFinsight sector performance to Aug 11, 2017

 

 

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