Tuesday, September 3, 2019

Back To School...

Tuesday, September 3, 2019 – August 2019 was a month full of volatility during which stocks swung widely on frequent trade news, bouncing between progress on negotiations and the escalation of tariffs. However, stocks enjoyed their best week in nearly three months, as investors appeared to grow more confident in the prospects for a U.S.-China trade deal. Economic data also helped after showing that consumer spending rose by 4.7% in the second quarter, reflecting a strong gain.

Trading volumes started off low early in the week but picked up somewhat as institutional investors sought to rebalance portfolios before the end of the month. The major averages finished little changed, taking a breather following a wild month of trading. The Dow Jones Industrial Average closed up 41 points at 26,403. The S&P 500 ended the day just above the flatline at 2,926 while the Nasdaq Composite slipped approximately 0.1% to 7,962. Within the S&P 500 Index, Industrials outperformed, helped by a rise in UPS (UPS) shares. Health care, Consumer Staples, Real Estate, and the Utilities sectors lagged.

In ETF news, it seemed investors loaded up on traditionally safer assets such as gold and silver this month. Also, this week’s top inflows list was dominated by Treasury ETFs such as iShares U.S. Treasury Bond ETF (GOVT) and the iShares 20+ Year Treasury Bond ETF (TLT) each had a net inflow of over $380 million. However, the No. 1 position belonged to the SPDR Gold Trust (GLD), with inflows of over $1.2 billion. More notably, (GLD) rose 8% in August while the iShares Silver Trust (SLV) surged well over 12% for the month.

ETFG Quant Movers – Those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings.

ETFG Quant Winners: The top five gainers in Quant Total Score were The Organics ETF (ORG), First Trust Australia AlphaDEX Fund (FAUS), iShares MSCI Chile ETF (ECH), ETRACS Alerian MLP Index ETN Series B (AMUB) and Knowledge Leaders Developed World ETF (KLDW) respectively. Each ETP added well over 10% to their score as behavioral scores and global factors came into play.

ETFG Quant Losers: Honorable mentions in the loser category were Forensic Accounting Long-Short ETF (FLAG), SPDR S&P Kensho Future Security ETF (FITE), USAA MSCI USA Small Cap Value Momentum Blend Index ETF (USVM), X-trackers MSCI EAFE Hedged Equity Fund (DBEF) and Invesco S&P MidCap 400 Revenue ETF (RWK). The reasons for the drop in quant score can be traced to fundamental and behavioral factors.

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

Considering the sector’s success, we’d like to highlight the top ETFs within the Industrials sector in this week’s Select List. First Trust NASDAQ Global Auto Index Fund (CARZ) held onto the 1st place position followed by First Trust Global Engineering and Construction ETF (FLM) in 2nd and John Hancock Multifactor Industrials ETF (JHMI) in 3rd. iShares Transportation Average ETF (IYT) jumped from 5th to 4th and Fidelity MSCI Industrials Index ETF (FIDU), a newcomer to the list, claimed 5th.

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