Monday, October 8, 2018

Winds of Change?

Monday, October 8, 2018 – Happy Columbus Day and the weather isn’t the only thing cooling down this fall season. In a move that mirrored the beginning of the year, equity markets took a drop last week due primarily to the rising rates of the 10-year treasury yield. The Dow Jones Industrial Average dropped over 200 points to 26,447 while the S&P 500 took a 50 point hit. The Nasdaq Composite was by far the biggest loser of the week falling over 300 points, a decline of about 3.2%, as Tech stocks led the way.

In ETFs, banking and tech ETFs saw some of the greatest outflows in this first week of October, according to our ETFG Fund Flow summary. One of the ETFs that took the biggest hit was  FTXO, the First Trust Nasdaq ETF. In the month of October, FTXO has lost just under $1B or about 43% of its AUM. QQQ, which is Invesco’s Nasdaq Composite ETF, has followed suit with outflows of over $700m or 1.14% of its AUM.

ETFG Quant Movers - In the ETFG Quant Movers, we saw risk averse ETPs gain the most percentage points to their overall scores. The Cambria core equity ETF (CCOR), Credit Suisse S&P MLP ETN (MLPO) and the JPMorgan Diversified Return International Currency Hedged ETF (JPIH) added 20.51%, 19.90% and 18.71% to their overall Quant scores respectively.

In the Losers column, we saw international based ETPs dropping several percentage points to their overall score. The VictoryShares International High Dividend Vol. Weighted ETF (CID), Schwab Emerging Markets Equity ETF (SCHE) and the iShares Edge MSCI Min Vol Europe ETF (EUMV) lost 20.81%, 19.67% and 15.86% to their overall scores respectively.

ETFG Weekly Select List - the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Because of the sector’s success in the major indexes this week, we’d like to highlight some substantial movement in the Consumer Discretionary portion when comparing this week’s Select List to last. The Columbia Emerging Markets Consumer ETF (ECON) jumped up two spots to be the top ranked fund in the sector. It took over for the Invesco Dynamic Leisure and Entertainment ETF (PEJ) which is now in the 4th ranked spot. The SPDR S&P Retail ETF (XRT) held steady at the 2nd spot for two consecutive weeks while the Invesco Dynamic Retail ETF (PMR) moved up to 3rd place. The biggest change in the sector was (FXD), the First Trust Consumer Discretionary AlphaDEX Fund, which jumped into the 5th ranked spot knocking out the John Hancock Multifactor Consumer Discretionary ETF (JHMC).

For full coverage of this week’s ETFG Weekly Select, please see here: ETFG Select List - October 8, 2018

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