Tuesday, January 21, 2020

The Rise Continues

Tuesday, January 21, 2020 – U.S. markets were closed yesterday in observance of Martin Luther King Jr. day. We wish our readers a happy holiday and hope that you enjoyed the long weekend.

The mixture of better than anticipated economic data, encouraging corporate earnings and the signing of the "phase-one" trade agreement pushed U.S. stocks to new record highs last week. The S&P 500 (+2.0%), Nasdaq Composite (+2.3%), and Russell 2000 (+2.5%) all rose at least 2.0%, and the Dow Jones Industrial Average (+1.8%) trailed right behind. In addition, six of the eleven S&P 500 sectors wrapped up the week with gains of at least 2.0%, including a 3.8% gain in the typically defensive leaning Utilities sector. The energy sector was the only sector to finish lower, dipping -1.1% as oil prices continued to fall.

Investors now turn their attention back to corporate earnings after solid results from the biggest banks on Wall Street. Netflix (NFLX) reports fourth-quarter results Tuesday, showing the effect of the new from Disney (DIS) streaming service. Texas Instruments (TXN) also reports Tuesday night, with chip names Intel (INTC), STMicroelectronics (STM) and Skyworks Solutions (SWKS) reporting later in the week. For investors looking to diligence which ETFs have the most exposure to these stocks, please take advantage of ETFG’s Grey Market Summary.

In looking at individual ETF flows, the Vanguard Small-Cap ETF (VB) topped inflows list, with a net flow of just under $1.5 billion. Also on the top five list was the iShares Core S&P 500 ETF (IVV), the iShares 20+ Year Treasury Bond ETF (TLT), the iShares ESG MSCI U.S.A. ETF (ESGU) and the First Trust Capital Strength ETF (FTCS). Each ETF brought in approximately $1 billion in new AUM respectively. In weekly outflows, we saw Vanguard Short-Term Corporate Bond ETF (VCSH) and SPDR S&P 500 ETF Trust (SPY) drop approximately $1.5 billion in redemptions.

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 Vanguard S&P Mid-Cap 400 Value ETF (IVOV), iShares Core S&P Small-Cap ETF (IJR), First Trust Developed Markets ex-US Small Cap AlphaDEX Fund (FNX), Vanguard S&P Small-Cap 600 ETF (VIOO), and First Trust Nasdaq Transportation ETF (FTXR). Each ETP added well over 18% to their overall Quant.

ETFG Quant Losers: Honorable mentions in the loser category were Invesco DWA Consumer Staples Momentum ETF (PSL), WisdomTree Japan SmallCap Dividend Fund (DFJ), iShares Dow Jones U.S. ETF (IYY), Invesco DWA Emerging Markets Momentum ETF (PIE) and Vanguard Communication Services ETF (VOX). The reasons for the drop in quant scores 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 Utilities sector in this week’s Select List. John Hancock Multifactor Utilities ETF (JHMU) moved from the 3rd position to claim 1st followed by Fidelity MSCI Utilities Index ETF (FUTY) which jumped two spots from 4th to 2nd. Newcomers to this week’s Select List were Global X MSCI China Utilities ETF (CHIU) in 3rd, Virtus Reaves Utilities ETF (UTES) in 4th and iShares Global Utilities ETF (JXI) in 5th.

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