Probable Termination – President Trump – at his finest “posturing” – this time with regards to #NAFTA, the renegotiations of which, naturally – MUST produce for him a tremendous SUCCESS … Hence his uttering the notion the agreement will probably have to be terminated as he otherwise doubts renegotiations will yield that for him …
- Impact on Energy? Hurricane Harvey pounding Texas, Houston in particular
- Jackson Hole – Janet Yellen speech, rather than speaking to “normalization” provided instead a review of the actions taken in the wake of Great Financial crisis. In so doing, and in essentially disagreeing with the wholesale deregulation Trump seems to favour, she may well have jeopardized any chances of seeing a second term … which my bet would be, she won’t, nor will care if she does or not…
- French President Macron – is suffering a sharp drop in popularity (already?) – with his approval rating dropping from 57% after his election in May, to 37% currently
- Roots – described by Bloomberg as “Iconic Canadian Retailer” is looking to go public
- Bank of America – sees gold moving to $1400 per/oz against a backdrop of low long term rates and continued Trump related uncertainty
- Canadian consumers – continue on … spending, spending, and … spending some more…
- Q3 Bank Results – topping expectations; dividend increases coming through …
- Barron’s – Questioning how much longer Canadian Tire can remain mostly immune from AMZN effect … AND – under the heading “Dump U.S. Stocks, Buy Emerging Markets”, profiles Rob Arnott suggesting US stocks are dead money from here, while EM should return 6.6% after inflation …
Latest market numbers as seen through ETFs providing exposure to the most commonly referred to benchmarks:
|XIU||S&P/TSX 60||-0.08%||PXG||RAFI Global Fundamental||0.28%||VCN||FTSE Canada All Cap Index ETF||0.69%|
|XIC||S&P/TSX Capped Composite||0.72%||PXS||RAFI US Fundamental Index||0.22%||VCE||FTSE Canada Index ETF||0.76%|
|CRQ||RAFI CDN Fundamental||0.89%||QQC/F||NASDAQ 100 CAD Hedged||0.54%||VUN||CRSP US Total Market Index Unhedged||0.02%|
|XSP||S&P 500 CAD Hedged||0.74%||PZC||RAFI CDN Small-Mid Fundam||-0.41%||VSP||S&P 500 CAD Hedged||0.84%|
|XUS||S&P500||-0.03%||VXC||FTSE All-World Ex Canada Index ETF||0.27%|
|XMU||MSCI Min Vol US||-0.09%||XXM/b||Morningstar US Value (Unh)||1.12%||VEF||FTSE Developed ex North-Am CAD H||0.44%|
|CLU||RAFI US Fund 1000 CAD H||0.95%||YXM/b||Morningstar US Momentum (Unh)||0.84%||VDU||FTSE Developed ex North-America||0.15%|
|XSU||Russell 2000 CAD Hedged||1.42%||FXM||Morningstar CDN Value||1.90%||VE||FTSE Developed Europe||0.43%|
|XIN||MSCI EAFE CAD Hedged||0.28%||WXM||Morningstar CDN Momentum||0.80%||VA||FTSE Developed Asia Pacific||-0.16%|
|XEH||MSCI Europe IMI CAD H||0.59%||VXM/b||Morningstar Intl Value (Unh)||0.30%||VEE||FTSE Emerging Mkts||1.87%|
|XEC||MSCI EM IMI||1.86%||ZXM/b||Morningstar Intl Momentum (Unh)||0.50%||HAZ||Active Global Dividends||0.05%|
|XMM||MSCI Min Vol Emerging||0.73%||RWE||MSCI Europe Low Risk Weighted (H)||0.04%||HHF||Morningstar Hedge Fund Index||0.87%|
|CWO||RAFI Broad Emerging||2.51%||HMF||Auspice Managed Futures||0.95%|
|CJP||RAFI Fundam Japan CAD H||-0.07%||ZDJ||Dow Jones CAD Hedged||0.81%||HAC||Seasonal Rotation||0.05%|
|CDZ||CDN Div Aristocrats||0.16%||ZEQ||MSCI Europe High Quality CAD H||0.41%||HPR||Active Preferred Shares||0.75%|
|week of:||Aug 21-25, 2017||OVERALL||Source:||ETFinsight/Bloomberg|
Respectively through available “FACTORS” (Smart or Strategic Beta) ETFs:
|CRQ||RAFI CDN Fundamental||0.89%||VXM/b||Morningstar Intl Value (Unh)||0.30%||CDZ||iShares S&P/TSX Canadian Dividend Aristocrats Index ETF||0.16%|
|CLU||RAFI US Fund 1000 CAD H||0.95%||XXM/b||Morningstar US Value (Unh)||1.12%||XHU||iShares US High Dividend Equity Index ETF||-0.28%|
|CJP||RAFI Fundam Japan CAD H||-0.07%||FXM||Morningstar CDN Value||1.90%||VGG||Vanguard US Dividend Appreciation Index ETF||-0.84%|
|CWO||RAFI Broad Emerging||2.51%||XCV||iShares Canadian Value Index ETF||0.57%||CUD||iShares US Dividend Growers Index ETF CAD-Hedged||0.66%|
|PXG||RAFI Global Fundamental||0.28%||VVL||Vanguard Global Value Factor Etf||0.49%|
|PZC||RAFI CDN Small-Mid Fundam||-0.41%||Momentum:|
|YXM/b||Morningstar US Momentum (Unh)||0.84%|
|Min Vol:||ZXM/b||Morningstar Intl Momentum (Unh)||0.50%|
|VVO||Vanguard Global Minimum Volatility Etf||0.76%||WXM||Morningstar CDN Momentum||0.80%||Multi-Factors:|
|XMW||MSCI Min Vol World||-0.08%||VMO||Vanguard Global Momentum Factor Etf||0.42%||XFC||iShares Edge MSCI Multifactor Canada Index ETF||0.80%|
|XMI||MSCI Min Vol EAFE||-0.18%||Liquidity:||XFS||iShares Edge MSCI Multifactor USA Index ETF||0.43%|
|XMM||MSCI Min Vol Emerging||0.73%||VLQ||Vanguard Global Liquidity Factor Etf||-0.61%||XFI||iShares Edge MSCI Multifactor EAFE Index ETF||-0.22%|
|XMU||MSCI Min Vol US||-0.09%||Quality:||Low Risk Weighted:|
|XMV||MSCI Min Vol Canada||0.78%||ZEQ||BMO MSCI Europe High Quality Hedged To CAD Index ETF||0.41%||RWE||First Asset MSCI Europe Low Risk Weighted ETF||0.04%|
|week of:||Aug 21-25, 2017||FACTORS / SMART BETA / STRATEGIC BETA||Source:||ETFinsight/Bloomberg|
Factors, Factors, and more Factors – including Multi Factors, and Single Factors on a Global basis.
Active, you say? – See below, which captures weekly performance for ETFs managed by Strategists, or wraps incorporating several ETFs into one to solve for Conservative, Balanced, or Growth objectives:
|HGM||Horizons Managed Global Opportunities ETF||0.76%|
|EXGG||Excel Global Growth Asset Allocation Etf||-0.78%||HAC||Horizons Seasonal Rotation ETF||0.05%|
|EXGB||Excel Global Balanced Asset Allocation Etf||-0.50%||HRA||Horizons Global Risk Parity ETF||0.30%|
|HHF||Horizons Morningstar Hedge Fund Index ETF||0.87%|
|DWG||PowerShares DWA Global Momentum Index ETF||0.71%|
|XTR||iShares Diversified Monthly Income ETF||-0.18%||XGR||iShares Growth Core Portfolio Builder Fund||0.32%|
|FIE||iShares Canadian Financial Monthly Income ETF||0.28%||XCR||iShares Conservative Core Portfolio Builder Fund||0.21%|
|ZMI||BMO Monthly Income ETF||0.19%||XGC||iShares Global Completion Portfolio Builder Fund||0.43%|
|CBD||iShares Balanced Income CorePortfolio Index ETF||-0.09%||FUT||First Asset US Tactical Sector Allocation Index ETF||0.54%|
|ETP||First Trust Global Risk Managed Income Index ETF||0.00%||PRP||Purpose Conservative Income Fund||-0.05%|
|CBN||iShares Balanced Growth CorePortfolio Index ETF||0.60%|
|XAL||iShares Alternatives Completion Portfolio Builder Fund||0.64%|
|week of:||Aug 21-25, 2017||ETF Strategists & ETFs of ETFs||Source:||ETFinsight/Bloomberg|
Brought to you by:
iShares: Koesterich: Gold shines as Washington stumbles
Vanguard: Answers to your clients’ questions on ETFs => Click HERE !
August 29th Webinar – Understanding and Implementing Dividend-oriented Strategies => Click HERE!
BMO ETFs: Mid-September is when 5 BMO ETFs migrate to different reference benchmarks => Click HERE!
Horizons ETFs: Horizons Managed Multi-Asset Momentum ETF => Final valuation upon termination => Click HERE!
RBC GAM ETFs: Moving up the ETFs ranks … From 7th in the industry as at the end of July, if the August numbers to 25.8 stand, RBC looks to have moved into 5th place, following Tier I players iShares; BMO ETFs; Vanguard; and Horizons. Getting RBC there: estimated net inflows to 25.8 of some $111 MM, with RBO; RPF; and RPD leading the charge in terms of net creates.
First Asset – Launches EAFE Low Risk weighted ETFs => Click HERE!
Caroline Escott – A robust Canadian economy is driving positive results for the Canadian banks in their Q3 reporting, which begun last week, with RY and CM the first of the Big Six to report, both delivering better than expected results, underpinned by strength in the domestic operations.
Optimism regarding a stronger Canadian economy and the rising rate environment is somewhat tempered by housing market concerns, the negative impact of a strengthening CAD and concerns regarding NAFTA renegotiations. The overall outlook remains positive, however, which results from RBC and CIBC reinforced.
While the benefit of rising rates will take some time to be realized (rate hikes came too late in the quarter, mid July, to make much of a difference), the yield curve has also steepened, which helps net interest margins – as it reflects the spread between what a bank earns on loans and what it pays on deposits. A steeper curve tends to be more profitable for banks.
Although further increases in rates risk adding further stress to the housing market, most analysts expect only modest effects on the banks loan books. Overall, credit quality is expected to remain resilient.
Adding to the positive impact of strong results, there is also the potential for dividend hikes from some of the Canadian banks. Both RY and CIBC announced dividend hikes. Scotiabank is also expected to announce an increase to its annual dividend. BNS is scheduled to report its results on August 29th.
There is a variety of ways to gain exposure to the Canadian banks, in addition to direct ownership. Below are a few plain vanilla options that we believe warrant consideration.
BMO Covered Call Canadian Banks (ZWB) – in case you are worried that housing market becomes a bigger issue, respectively one that caps the upside for banks in coming weeks, months, and possibly quarters …
BMO S&P/TSX Equal Weight Banks Index (ZEB) – affording you access to the big banks, with automatic rebalancing to equal weight positions on a pre-determined schedule, allowing for some gains realizations on the winners, and redeployment into the underperformers – a strategy that capitalizes on concept of mean reversion …
iShares S&P/TSX Capped Financials (XFN) – allowing you to partake in the broader financials space, including insurances cos, and money managers …
Weekly Volumes History to August 25, 2017
Top and Bottom performing ETFs for the week of Aug 21-25, 2017:
|Ticker||Name||% Change||Avg Price||Weekly Volume||$ Volume traded|
|Top Performers||week of||Aug 21-25, 2017|
|XBM CN Equity||iShares S&P/TSX Global Base Metals Index ETF||5.46%||$12.73||137,292||$1,753,739|
|ZMT CN Equity||BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF||5.43%||$11.24||738,546||$8,472,617|
|XCH CN Equity||iShares China Index ETF||4.84%||$26.06||31,734||$827,894|
|ZJG CN Equity||BMO Junior Gold Index ETF||3.53%||$8.89||566,164||$5,014,168|
|CBQ CN Equity||iShares BRIC Index ETF||2.57%||$25.06||82,728||$2,067,539|
|CWO CN Equity||iShares Emerging Markets Fundamental Index ETF||2.51%||$35.45||6,964||$247,110|
|XBZ CN Equity||iShares MSCI Brazil Index ETF||2.29%||$13.72||48,360||$666,921|
|HUN CN Equity||Horizons Natural Gas ETF||2.20%||$6.44||48,398||$306,469|
|XEM CN Equity||iShares MSCI Emerging Markets Index ETF||1.98%||$31.15||101,897||$3,171,542|
|ZEM CN Equity||BMO MSCI Emerging Markets Index ETF||1.93%||$19.45||2,408,814||$46,524,583|
|ZLC CN Equity||BMO Long Corporate Bond Index ETF||-0.65%||$18.38||106,888||$1,965,338|
|ZUP CN Equity||BMO US Preferred Share Index ETF||-0.69%||$24.69||17,027||$421,011|
|DLR CN Equity||Horizons US Dollar Currency ETF||-0.72%||$12.47||1,538,966||$19,195,972|
|VGG CN Equity||Vanguard US Dividend Appreciation Index ETF||-0.84%||$39.41||91,685||$3,621,283|
|XST CN Equity||iShares S&P/TSX Capped Consumer Staples Index ETF||-0.84%||$53.70||181,339||$9,749,315|
|ZRR CN Equity||BMO Real Return Bond Index ETF||-0.87%||$17.06||23,461||$400,836|
|HTB CN Equity||Horizons US 7-10 Year Treasury Bond ETF||-0.94%||$51.68||6,655||$343,782|
|ZHP CN Equity||BMO US Preferred Share Hedged to CAD Index ETF||-1.28%||$25.57||13,033||$333,273|
|FSF CN Equity||First Asset Global Financial Sector ETF||-2.05%||$18.58||16,420||$306,249|
|HUV CN Equity||BetaPro S&P 500 VIX Short-Term Futures ETF||-10.47%||$8.66||189,290||$1,677,694|
Top Performing ETFs – Cyclical “angle” still looking like “risk on” ie- Normalization risk notwithstanding, EM, Base Metals continuing to do well …
Bottom Performing ETFs –Further pullback on the part of “volatility”, and otherwise what could be seen as possible chink in armour – ie weaker financials? and slight decline in consumers staples, though so modest one wouldn’t want to read too much into that…
Last week’s Sector Performance: