Nothing in Return (TWTW – Oct 23-27, 2017)

Nothing in Return – Also known as “Winner Takes all” in Foreign Affairs Minister Chrystia Freeland parlance”, is what the US has in mind when in comes to the current NAFTA re-negotiations … That angle has been confirmed by US  Commerce Secretary Wilbur Ross in a CNBC interview in which he stated “But we’re trying to do a difficult thing. We’re asking two countries to give up some privileges that they have enjoyed for 22 years, and we’re not in a position to offer anything in return, so that’s a tough sell“.

This doesn’t sound much like negotiations involving compromise and/or give and take …  which could a) be a strategic choice, or b) very much the US mindset currently … Either way, it is probably very much the reason behind renewed CAD weakness, despite the country’s economy for the moment topping the G7 performance chart, and a positive  budget update from our Finance Minister Bill Morneau released this week that was headlined by a 2017 budget deficit forecast at $19.9 Billion, from earlier estimates of $28.5 Billion.

Unfortunately for Bill … but that isn’t what is likely weighing on the loonie, his own personal dealings have landed him under a microscope (and on the Ethics commissioner’s to do list …)  after he failed to do what he was supposed to re: “Blind trust” … and so now, he is pledging to give to charity the gains enjoyed while having omitted to do what he said he would … Is it just me? Or is it the very Canadian thing to do in political circles? Forever ignore what is expected of mere mortal taxpayers, and attempt to get away with whatever you please (the more outrageous, almost the better…) , and if and when caught, simply bet on the usual Canadian leniency. WOW! Would he have voluntereed that generous donation had he not been caught? The word doubtful comes to mind …

Back to more trivial matters – having very much surprised many in September when last hiking the overnight, the BoC’s Poloz was talking downside risk when seeking shelter from potential criticism (given the current strength in economic numbers) – as he left the overnight unchanged this time.

Could CAD have a meaningful bounce if the dire NAFTA newsflow were to take a turn for the better – as unlikely as that may seem? One would assume so, with most all Banks’ prognosticators in matters FX related uniformly anticipating potential strength for the Loonie between now and year-end. Unless that was all in anticipation of the potential collision course story circulating ahead of both the budget update, and the latest BoC rate decision – a story that didn’t come to pass as Stephen Poloz remains mindful of downside risk including NAFTA.

Latest Developments:

  • Spain – Passes measures aimed at defeating Separatists in Catalonia
  • GE – continuing to drop precipituously, with many now seeing it as a foregone conclusion that the dividend will get clipped come GE day, November 13th
  • The Bank of Canada – left the O/N rate unchanged, having previously removed the 2 oil price meltdown insurance cuts. CAD strength and NAFTA concerns were cited…
  • Japan’s PM Abe – success at securing a super majority in the most recent elections garantees a continuation of his policies
  • NAFTA head negotiator Robert Lighthizer – is portrayed first and foremost as a protectionist in a G&M piece over the week-end, which … doesn’t exactly bode well for the next round of talks to be held in Mexico…
  • Amazon – sailed past forecasts in its Q3 reporting, and its stock rose sharply as a result, making CEO Jeff Bezos world’s richest person …
  • Apple – contrary to expectations that iPhone X might not deliver on the strong sales front, demand is apparently strong, with the share price also moving up smartly in response…

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 0.79% PXG RAFI Global Fundamental 1.63% VCN FTSE Canada All Cap Index ETF 0.72%
XIC S&P/TSX Capped Composite 0.64% PXS RAFI US Fundamental Index 1.71% VCE FTSE Canada Index ETF 0.77%
CRQ RAFI CDN Fundamental 0.38% QQC/F NASDAQ 100 CAD Hedged 1.83% VUN CRSP US Total Market Index Unhedged 1.81%
XSP S&P 500 CAD Hedged 0.27% PZC RAFI CDN Small-Mid Fundam -0.77% VSP S&P 500 CAD Hedged 0.31%
XUS S&P500 1.89% VXC FTSE All-World Ex Canada Index ETF 1.76%
XMU MSCI Min Vol US 1.65% XXM/b Morningstar US Value (Unh) 2.52% VEF FTSE Developed ex North-Am CAD H 0.88%
CLU RAFI US Fund 1000 CAD H -0.46% YXM/b Morningstar US Momentum (Unh) 2.10% VDU FTSE Developed ex North-America 1.52%
XSU Russell 2000 CAD Hedged -0.12% FXM Morningstar CDN Value 0.07% VE FTSE Developed Europe 0.65%
XIN MSCI EAFE CAD Hedged 0.83% WXM Morningstar CDN Momentum 1.00% VA FTSE Developed Asia Pacific 2.72%
XEH MSCI Europe IMI CAD H 0.60% VXM/b Morningstar Intl Value (Unh) 2.16% VEE FTSE Emerging Mkts 1.50%
XEC MSCI EM IMI 1.42% ZXM/b Morningstar Intl Momentum (Unh) 2.02% HAZ Active Global Dividends 1.69%
XMM MSCI Min Vol Emerging 1.29% RWE MSCI Europe Low Risk Weighted (H) 0.57% HHF Morningstar Hedge Fund Index -0.14%
CWO RAFI Broad Emerging 1.26% HMF Auspice Managed Futures -0.48%
CJP RAFI Fundam Japan CAD H 2.64% ZDJ Dow Jones CAD Hedged 0.55% HAC Seasonal Rotation 0.59%
CDZ CDN Div Aristocrats 0.41% ZEQ MSCI Europe High Quality CAD H 0.89% HPR Active Preferred Shares -0.10%
week of: Oct 23-27, 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 0.38% VXM/b Morningstar Intl Value (Unh) 2.16% CDZ iShares S&P/TSX Canadian Dividend Aristocrats Index ETF 0.41%
CLU RAFI US Fund 1000 CAD H -0.46% XXM/b Morningstar US Value (Unh) 2.52% XHU iShares US High Dividend Equity Index ETF 0.49%
CJP RAFI Fundam Japan CAD H 2.64% FXM Morningstar CDN Value 0.07% VGG Vanguard US Dividend Appreciation Index ETF 1.91%
CWO RAFI Broad Emerging 1.26% XCV iShares Canadian Value Index ETF 0.92% CUD iShares US Dividend Growers Index ETF CAD-Hedged -0.67%
PXG RAFI Global Fundamental 1.63% VVL Vanguard Global Value Factor Etf 1.20%
PZC RAFI CDN Small-Mid Fundam -0.77% Momentum:
YXM/b Morningstar US Momentum (Unh) 2.10%
Min Vol: ZXM/b Morningstar Intl Momentum (Unh) 2.02%
VVO Vanguard Global Minimum Volatility Etf 0.47% WXM Morningstar CDN Momentum 1.00% Multi-Factors:
XMW MSCI Min Vol World 1.50% VMO Vanguard Global Momentum Factor Etf 1.98% XFC iShares Edge MSCI Multifactor Canada Index ETF -0.29%
XMI MSCI Min Vol EAFE 0.95% Liquidity: XFS iShares Edge MSCI Multifactor USA Index ETF 2.57%
XMM MSCI Min Vol Emerging 1.29% VLQ Vanguard Global Liquidity Factor Etf 1.30% XFI iShares Edge MSCI Multifactor EAFE Index ETF 2.07%
XMU MSCI Min Vol US 1.65% Quality: Low Risk Weighted:
XMV MSCI Min Vol Canada 0.88% ZEQ BMO MSCI Europe High Quality Hedged To CAD Index ETF 0.89% RWE First Asset MSCI Europe Low Risk Weighted ETF 0.57%
week of: Oct 23-27, 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:

ticker name change ticker name change ticker name change
HGM Horizons Managed Global Opportunities ETF 1.18%
EXGG Excel Global Growth Asset Allocation Etf 1.27% HAC Horizons Seasonal Rotation ETF 0.59%
EXGB Excel Global Balanced Asset Allocation Etf 0.86% HRA Horizons Global Risk Parity ETF -0.20%
HHF Horizons Morningstar Hedge Fund Index ETF -0.14%
DWG PowerShares DWA Global Momentum Index ETF 3.96%
XTR iShares Diversified Monthly Income ETF -0.44%
FIE iShares Canadian Financial Monthly Income ETF 0.20%
ZMI BMO Monthly Income ETF 0.31%
CBD iShares Balanced Income CorePortfolio Index ETF -0.27% FUT First Asset US Tactical Sector Allocation Index ETF -0.09%
ETP First Trust Global Risk Managed Income Index ETF 0.10% PRP Purpose Conservative Income Fund 0.24%
CBN iShares Balanced Growth CorePortfolio Index ETF 0.29%
week of: Oct 23-27, 2017 ETF Strategists & ETFs of ETFs Source: ETFinsight/Bloomberg

Brought to you by: 

Providers’ News:

iShares – Ackerley: Trick or Treat – Top 4 retirement savings ideas

Vanguard – Davis: The truth behind indexing

BMO ETFs – Latest quarterly => click HERE!

Horizons ETFs – launches HADM – the International Dividend companion to the Global HAZ, the US HAU, and the Canadian HAL ETFs managed by Guardian Capital => click HERE!

RBC GAM – How exactly does RBC’s recently launched RBNK work? As earlier noted, emphasis on higher yielders, which get sizable allocation relative to the two lesser yielding banks in particular … So what is the tilt? High dividend payers, with a mean reverting bias, as when bank yields rise is typically when a bank stock has been lagging its peers… So long as no yield trap materializes … all good…

PowerShares – Brian Schneider’s (Head of Rates North America) take on the BoC leaving rates unchanged => click HERE!

First Assets – Recently marked the launch of their actively managed enhanced short duration bond ETF by opening the market (26/10) => click HERE!

Purpose Investments – risk rating change => Click HERE !

EvolveFunds – Rounds out its offering with the launch of its enhanced yield Global Healthcare ETF => click HERE!

Weekly Volumes History to October 27, 2017:

volumes week ending October 27, 2017

Top and Bottom performing ETFs for the week of Oct 23-27, 2017:

Ticker Name % Change Avg Price Weekly Volume $ Volume traded
Top Performers week of Oct 23-27, 2017
ZID CN Equity BMO India Equity Index ETF 5.80% $22.96 123,834 $2,824,366
XID CN Equity iShares India Index ETF 4.04% $34.76 50,370 $1,756,367
FHM CN Equity First Trust AlphaDEX US Materials Sector Index ETF 3.95% $26.55 199,905 $5,316,334
ZBK CN Equity BMO Equal Weight US Banks Index ETF 3.62% $25.24 740,764 $18,683,132
HXQ CN Equity Horizons NASDAQ 100 Index ETF 3.62% $43.19 7,152 $311,540
RUSA CN Equity RBC US Equity Index Etf 3.46% $21.61 78,172 $1,683,424
TXF/B CN Equity First Asset Tech Giants Covered Call ETF 3.45% $17.06 87,830 $1,491,843
DXG CN Equity Dynamic Ishares Active Global Dividend Etf 3.09% $23.24 103,759 $2,407,874
HTA/U CN Equity Tech Achievers Growth & Income ETF 3.02% $9.74 18,965 $183,883
VA CN Equity Vanguard FTSE Developed Asia Pacific All Cap Index ETF 2.72% $33.89 57,346 $1,950,121
Bottom Performers
XGD CN Equity iShares S&P/TSX Global Gold Index ETF -2.01% $12.26 7,700,282 $94,386,610
HMMJ CN Equity Horizons Marijuana Life Sciences Index ETF -2.22% $9.91 1,379,755 $13,775,011
RPD/U CN Equity RBC Quant European Dividend Leaders ETF -2.27% $18.78 20,162 $376,849
XHC CN Equity iShares Global Healthcare Index ETF CAD-Hedged -2.38% $44.84 59,849 $2,688,869
HNY CN Equity Horizons Natural Gas Yield ETF -3.10% $12.21 39,457 $476,267
HHL CN Equity Healthcare Leaders Income ETF -3.11% $8.54 1,017,343 $8,658,845
HHL/U CN Equity Healthcare Leaders Income ETF -3.13% $8.49 83,935 $710,337
ZGD CN Equity BMO Equal Weight Global Gold Index ETF -3.20% $9.49 519,639 $4,934,628
HUN CN Equity Horizons Natural Gas ETF -3.97% $6.25 39,882 $244,668
ZJG CN Equity BMO Junior Gold Index ETF -4.24% $9.02 378,128 $3,401,334

Top Performing ETFs – Strong showing on the part of both India ETFs available here, further strength from the prior week in the US Banks ETFs square, and strength as well in NASDAQ on the back of better than anticipated results on the part of some of the FANGS stocks, notably Amazon and Apple.

Bottom Performing ETFs – Continued weakness in Gold was accompanied by some pullback in Healthcare, and additional weakness in Natural Gas exposed ETFs.

Last week’s Sector Performance:

weekly performance sector 27 oct 2017


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