Surprise Beneficiaries

Monday November 28, 2016 – the year 2016 has surely been one for the books as the unexpected basically became the norm throughout the last 11 months. No one at this time last year expected Brexit to be possible, Donald Trump to be President-elect or the stock market to go anywhere but down – surprise, surprise.

Yet again this week we saw record highs in all the major U.S. indexes, but this time it was on the same day. That’s something we haven’t seen since the last day of the 20th century. Riding that wave has been U.S. Equity Exchange-Traded-Funds which saw over $48B of inflows in the past 30 days according to the ETFG Fund Flow Report.

One fund which is reaping the benefits of the market highs and the plans of President-elect Trump is Financial Select Sector SPDRS (XLF) which has seen well over $3B of inflows just last week – all a direct expectation of steady interest rate rises and a bulk up in spending on infrastructure which will give banks more opportunities to lend and more importantly, make better gains on the money they are handing out. The fund is up almost 14% through the month of November and closed Friday at $22.41. It currently holds a “C” rating in the ETFG Quant Score.

With the Holiday season now in full swing, retail and consumer discretionary ETFs are also catching the eyes of some investors. The PowerShares Dynamic Retail Portfolio (PMR) reached levels it hasn’t seen since December of last year as it closed on Friday at $37.41. The index is comprised of 30 U.S. retailers and is currently up $3.32 MTD. It will be interesting to see this week how Cyber Monday plays out for online retailers as it is expected to be the biggest online shopping day in U.S. history.

But as the year continues to wind down we will see if these two trends will be able to hold up steam. For now, investors who were willing to buckle up and leave their money in the market are enjoying an early holiday present but the well-informed ones must always be wary of a Grinch that may be lurking in the distance.

Thank you for reading ETF Global Perspectives!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick

_____________________________________________________________
Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.