This is hopefully a sign of good things to come in March
which is a historically good month for stocks. As for February, the US Stock
Market had one of its worst months in the past year with all indices finishing
down for the month. The Dow, S&P and Nasdaq started off February at 26,186,
2,821 and 7,385 and finished at 25,034, 2,732 and 7,280 respectively.
These declines were exacerbated by the news of a
potential trade war brewing between the US and some if its closest allies. When President Trump announced he would be
placing a tariff on imported steel and aluminum, countries like Canada and
England responded quickly by announcing plans of their own to “punish” the US
in trade.
This quickly shook markets, not just because of how investors think it could affect the prices of steel and aluminum coming into the US, which will now have a 25% and 10% additional tax on them, but also because of ripple effects it could have on trade for the US in other product markets.
As you would imagine, the tariff news did have an
immediate impact on some ETPs that track those commodities. The VanEck Vectors Steel ETF (SLX) finished down 4.6% for
the week and the iPath Bloomberg
Aluminum Subindex Total Return ETN (JJU) finished down 3.28%
MTD. It will be a matter of time to see how this tariff will actually affect
these commodities as it does go into effect next week.
ETFG
Quant Movers - Elsewhere in ETFs, our ETFG Quant Movers
showed the iShares MSCI China Small-Cap
ETF (ECNS), Fidelity MSCI Utilities Index ETF (FUTY) and VanEck Vectors Oil Refiners ETF (CRAK) lose the most points
to their overall scores down 11.06, 10.52 and 10.42 respectively.
On the winning side, the iShares Latin America 40 ETF (ILF), SPDR S&P Dividend ETF (SDY) and FlexShares Morningstar Emerging Markets
Factor Tilt Index Fund (TLTE)
added the most points to their overall scores gaining 11.25, 10.12 and 9.09 to
their respective ETFG Quant scores.
Some interesting news to watch closely over the coming
weeks will be the power of large passive managers to affect change on society.
BlackRock, the largest asset manager in the world with much of its money coming
from its iShares products, on Friday sent a letter to public gun companies in
which they invest through their passive products, requesting information on
business practices and future gun safety initiatives. They did disclose that
they are not invested in those companies in their actively managed portion of
the firm. This can be important to show how the public amass of money in ETFs
can prompt social change.
Thank you for reading ETF Global Perspectives.
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