“Surprise” Stephen … Well, one thing is for certain, markets didn’t see Stephen Poloz coming with his second 25bps hike, delivered this week. The consensus was – later aka October, likely – but September, nope, et pourtant – a second BoC hike materialized… CAD surged, and meanwhile, the odds of a further hike by year end are nearing certainty.
My take on this? I have seen some comments suggesting we may well end up “needing” QE next year. While that view is rather extreme, could it be the Bank of Canada Governor is reading too much into the strength of Canada’s current economic circumstances and strong rebound? Time will tell. If I had to bet, I’d have to say it is a risk not to be underestimated… After all – isn’t the strength in question meaningfully resting on what we keep hearing is unsustainable as far as Canadians’ spending?
- The Geopolitical Backdrop – continues to feature elevated risk of conflict, courtesy North Korea
- Hurricane (s)- Irma is hitting Florida this week-end after pounding St Martin and Aruba in particular, leaving both 95% devastated. Jose is up next …
- ECB – rates remained unchanged, with the ECB somewhat coy about the process of ending QE, respectively shifting toward normalization in terms of what “communication” / respectively changes to the current framework are required if any BEFORE altering its current modus operandi
- Toronto Housing Market – August’s data provided further evidence of the significant shift in sentiment (and price momentum…) that has taken place since the relatively recent Mar/Apr peaks…
- Oil – Disruption from Hurricane season – heightened volatility in both crude and gasoline …
Latest market numbers as seen through ETFs providing exposure to the most commonly referred to benchmarks:
|XIU||S&P/TSX 60||-1.21%||PXG||RAFI Global Fundamental||-1.62%||VCN||FTSE Canada All Cap Index ETF||-1.30%|
|XIC||S&P/TSX Capped Composite||-1.28%||PXS||RAFI US Fundamental Index||-2.65%||VCE||FTSE Canada Index ETF||-1.40%|
|CRQ||RAFI CDN Fundamental||-1.75%||QQC/F||NASDAQ 100 CAD Hedged||-1.31%||VUN||CRSP US Total Market Index Unhedged||-2.59%|
|XSP||S&P 500 CAD Hedged||-0.53%||PZC||RAFI CDN Small-Mid Fundam||1.79%||VSP||S&P 500 CAD Hedged||-0.59%|
|XUS||S&P500||-2.50%||VXC||FTSE All-World Ex Canada Index ETF||-2.07%|
|XMU||MSCI Min Vol US||-1.61%||XXM/b||Morningstar US Value (Unh)||-4.19%||VEF||FTSE Developed ex North-Am CAD H||-0.84%|
|CLU||RAFI US Fund 1000 CAD H||-0.93%||YXM/b||Morningstar US Momentum (Unh)||-2.16%||VDU||FTSE Developed ex North-America||-1.24%|
|XSU||Russell 2000 CAD Hedged||-0.96%||FXM||Morningstar CDN Value||-1.23%||VE||FTSE Developed Europe||-0.72%|
|XIN||MSCI EAFE CAD Hedged||-0.87%||WXM||Morningstar CDN Momentum||-1.23%||VA||FTSE Developed Asia Pacific||-1.83%|
|XEH||MSCI Europe IMI CAD H||-0.75%||VXM/b||Morningstar Intl Value (Unh)||-2.11%||VEE||FTSE Emerging Mkts||-2.20%|
|XEC||MSCI EM IMI||-2.36%||ZXM/b||Morningstar Intl Momentum (Unh)||-1.48%||HAZ||Active Global Dividends||-1.99%|
|XMM||MSCI Min Vol Emerging||-2.51%||RWE||MSCI Europe Low Risk Weighted (H)||-0.23%||HHF||Morningstar Hedge Fund Index||-0.28%|
|CWO||RAFI Broad Emerging||-3.25%||HMF||Auspice Managed Futures||-1.66%|
|CJP||RAFI Fundam Japan CAD H||-1.29%||ZDJ||Dow Jones CAD Hedged||-1.04%||HAC||Seasonal Rotation||0.21%|
|CDZ||CDN Div Aristocrats||-1.01%||ZEQ||MSCI Europe High Quality CAD H||-0.13%||HPR||Active Preferred Shares||0.54%|
|week of:||Sept 1-8, 2017||OVERALL||Source:||ETFinsight/Bloomberg|
Respectively through available “FACTORS” (Smart or Strategic Beta) ETFs:
|CRQ||RAFI CDN Fundamental||-1.75%||VXM/b||Morningstar Intl Value (Unh)||-2.11%||CDZ||iShares S&P/TSX Canadian Dividend Aristocrats Index ETF||-1.01%|
|CLU||RAFI US Fund 1000 CAD H||-0.93%||XXM/b||Morningstar US Value (Unh)||-4.19%||XHU||iShares US High Dividend Equity Index ETF||-2.66%|
|CJP||RAFI Fundam Japan CAD H||-1.29%||FXM||Morningstar CDN Value||-1.23%||VGG||Vanguard US Dividend Appreciation Index ETF||-1.94%|
|CWO||RAFI Broad Emerging||-3.25%||XCV||iShares Canadian Value Index ETF||-1.57%||CUD||iShares US Dividend Growers Index ETF CAD-Hedged||-0.08%|
|PXG||RAFI Global Fundamental||-1.62%||VVL||Vanguard Global Value Factor Etf||-3.19%|
|PZC||RAFI CDN Small-Mid Fundam||1.79%||Momentum:|
|YXM/b||Morningstar US Momentum (Unh)||-2.16%|
|Min Vol:||ZXM/b||Morningstar Intl Momentum (Unh)||-1.48%|
|VVO||Vanguard Global Minimum Volatility Etf||-0.55%||WXM||Morningstar CDN Momentum||-1.23%||Multi-Factors:|
|XMW||MSCI Min Vol World||-1.61%||VMO||Vanguard Global Momentum Factor Etf||-2.57%||XFC||iShares Edge MSCI Multifactor Canada Index ETF||-1.72%|
|XMI||MSCI Min Vol EAFE||-1.01%||Liquidity:||XFS||iShares Edge MSCI Multifactor USA Index ETF||-2.53%|
|XMM||MSCI Min Vol Emerging||-2.51%||VLQ||Vanguard Global Liquidity Factor Etf||-1.86%||XFI||iShares Edge MSCI Multifactor EAFE Index ETF||-1.37%|
|XMU||MSCI Min Vol US||-1.61%||Quality:||Low Risk Weighted:|
|XMV||MSCI Min Vol Canada||-1.05%||ZEQ||BMO MSCI Europe High Quality Hedged To CAD Index ETF||-0.13%||RWE||First Asset MSCI Europe Low Risk Weighted ETF||-0.23%|
|week of:||Sept 1-8, 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||-1.32%|
|EXGG||#N/A||#N/A||HAC||Horizons Seasonal Rotation ETF||0.21%|
|EXGB||#N/A||#N/A||HRA||Horizons Global Risk Parity ETF||0.79%|
|HHF||Horizons Morningstar Hedge Fund Index ETF||-0.28%|
|DWG||PowerShares DWA Global Momentum Index ETF||-2.93%|
|XTR||iShares Diversified Monthly Income ETF||-0.71%||XGR||iShares Growth Core Portfolio Builder Fund||-0.46%|
|FIE||iShares Canadian Financial Monthly Income ETF||-1.40%||XCR||iShares Conservative Core Portfolio Builder Fund||-0.47%|
|ZMI||BMO Monthly Income ETF||-0.69%||XGC||iShares Global Completion Portfolio Builder Fund||-0.53%|
|CBD||iShares Balanced Income CorePortfolio Index ETF||-0.83%||FUT||First Asset US Tactical Sector Allocation Index ETF||-0.36%|
|ETP||First Trust Global Risk Managed Income Index ETF||-0.57%||PRP||#N/A||#N/A|
|CBN||iShares Balanced Growth CorePortfolio Index ETF||-1.44%|
|XAL||iShares Alternatives Completion Portfolio Builder Fund||-0.42%|
|week of:||Sept 1-8, 2017||ETF Strategists & ETFs of ETFs||Source:||ETFinsight/Bloomberg|
Brought to you by:
iShares: Boivin: What low Volatility is and isn’t telling us => click HERE!
Vanguard: Kinniry: How clients view advisors => click HERE!
Sunlife: Is – effectively – backing into the ETF space via its Excel Funds deal => click HERE! What does this mean? I’d expect to see a) flows moving into EXGB and EXGG on the one hand, and in the not too distant future, b) a full fledged effort on the part of Sunlife to make its own push into the ETF space, presumably with launch of variety of ETFs – some of which … most likely of Smart Beta or even Active persuasion…
BMO ETFs: Files for several new ETFs – heading into the Value space (broadening Smart Beta offering beyond Quality and Low Vol), via MSCI based EAFE, US, and Canada Value ETFs.
Reminder: Mid-September is when 5 BMO ETFs migrate to different reference benchmarks => Click HERE!
Horizons ETFs: Better disclosure for ETFs => Click HERE!
First Asset – Rough week for value relative to momentum in the US … (More value now available?) other: Recently launched Covered Call Tech Giants (Unhedged) => click HERE!
ETFinsight – Perspectives September 2017: Seasonal Glitch?
Weekly Volumes History to September 8, 2017
Top and Bottom performing ETFs for the week of Sept 4-8, 2017:
|Ticker||Name||% Change||Avg Price||Weekly Volume||$ Volume traded|
|Top Performers||week of||Sept 4-8, 2017|
|HUV CN Equity||BetaPro S&P 500 VIX Short-Term Futures ETF||5.05%||$8.38||114,775||$973,069|
|CCX CN Equity||Auspice Canadian Crude Oil Index ETF||3.49%||$8.68||27,939||$241,122|
|SVR CN Equity||iShares Silver Bullion ETF||1.74%||$9.86||59,552||$587,756|
|HGY CN Equity||Horizons Gold Yield ETF||1.72%||$5.30||53,067||$280,425|
|CGL CN Equity||iShares Gold Bullion ETF||1.48%||$11.63||1,480,307||$17,203,479|
|HUG CN Equity||Horizons Gold ETF||1.47%||$12.34||64,037||$792,100|
|ZJG CN Equity||BMO Junior Gold Index ETF||1.45%||$9.82||423,147||$4,149,722|
|XBZ CN Equity||iShares MSCI Brazil Index ETF||1.44%||$14.06||68,929||$970,897|
|HHL CN Equity||Healthcare Leaders Income ETF||1.40%||$8.62||368,886||$3,185,695|
|ZUH CN Equity||BMO Equal Weight US Health Care Hedged to CAD Index ETF||1.08%||$48.16||337,329||$16,258,515|
|CWO CN Equity||iShares Emerging Markets Fundamental Index ETF||-3.25%||$35.68||13,933||$499,544|
|FHB CN Equity||First Asset European Bank ETF||-3.37%||$8.98||45,185||$408,258|
|ZJO CN Equity||BMO Junior Oil Index ETF||-3.56%||$10.89||53,755||$588,437|
|FLI CN Equity||First Asset U.S. & Canada Lifeco Income ETF||-4.08%||$12.17||93,372||$1,134,735|
|ZUB CN Equity||BMO Equal Weight US Banks Hedged to CAD Index ETF||-4.17%||$24.96||1,139,539||$28,433,855|
|XXM/B CN Equity||First Asset Morningstar US Value Index ETF||-4.19%||$15.16||73,156||$1,104,352|
|FHF CN Equity||First Trust AlphaDEX US Financial Sector Index ETF||-4.32%||$24.91||20,330||$509,013|
|ZMT CN Equity||BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF||-5.67%||$11.71||378,942||$4,365,095|
|XBM CN Equity||iShares S&P/TSX Global Base Metals Index ETF||-6.05%||$13.02||179,401||$2,330,957|
|ZBK CN Equity||BMO Equal Weight US Banks Index ETF||-6.18%||$21.62||1,397,648||$30,439,708|
Top Performing ETFs – Nothing speaking to strong sense of direction – as volatility continues on being elevated (relative to – granted – extremely depressed levels …) and combo of oil and precious metals / healthcare … In terms of US Banks – FED actions this month could trigger strong price action… will it be to the positive? Or is recent price action essentially a precursor to the FEDs having to walk back their tightening, respectively normalization efforts to a degree?
Bottom Performing ETFs – Cyclical “angle” taking a hit (Irma? Korea?) in terms of Financials (Banks) and Base Metals … Noteworthy is that the magnitude of the hit in % terms certainly more noticeable than on the “gainers” front … Buy the dip? Amass cash?
Last week’s Sector Performance: