Extreme volatility persisted this past week, with stock markets declining sharply as the number of COVID-19 (coronavirus) cases globally continued to rise. On Friday, the Dow Jones Industrial Average plunged 913 points (-4.6%) to 19,174, the S&P 500 Index fell 105 points (-4.3%) to 2,305 and the Nasdaq Composite declined 271 points (-3.8%) to 6,880. To add to the situation, trading activity spiked – 2.7 billion shares were traded on the NYSE and 5.2 billion shares on the NASDAQ – due to quadruple-witching or the expiration of options and futures contracts on stocks and indexes. For the week, the DJIA was down 17.3%, the S&P 500 decreased 14.5% and the Nasdaq Composite declined 12.6%.
The effects of social distancing will take a significant toll on the U.S. economy and hurt employment as major central banks and governments around the world announced measures to counter the effect. Travel restrictions remain in place, businesses shuttered and schools have extended distance learning programs, all while the New York Stock Exchange said it will temporarily close its iconic trading floor and move temporarily to electronic operations.
Though another historic week in stock price declines, ETFs remained resilient and saw a relatively modest outflow of around $19 billion in total assets for U.S. listed ETPs. In looking at individual flows, the SPDR S&P 500 ETF Trust (SPY) topped inflows list, with a total gain of around $8.25 billion. The iShares Core S&P 500 ETF (IVV) topped the outflow list with a decline of $4.2 billion in assets. Also on the top five inflow list was SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL), Invesco QQQ Trust (QQQ), iShares Short Treasury Bond ETF (SHV) and iShares 1-3 Year Treasury Bond ETF (SHY). In order these ETFs brought in $4.8 billion, $4.0 billion, $2.3 billion and $1.9 billion respectively in fresh assets. In weekly outflows, we saw iShares Core U.S. Aggregate Bond ETF (AGG) and iShares 20+ Year Treasury Bond ETF (TLT) drop over $3 billion each 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 their ETFG Quant Total Score were iPath S&P MLP ETN (IMLP), Innovator IBD ETF Leaders ETF (LDRS), Franklin FTSE Europe Hedged ETF (FLEH), Global X MSCI SuperDividend Emerging Markets ETF (SDEM) and AdvisorShares Vice ETF (ACT). Each ETP added around 10 points to their overall Quant.
ETFG Quant Losers: Honorable mentions in the loser category were ELEMENTS SPECTRUM ETN (EEH), First Trust Preferred Securities and Income ETF (FPE), Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), iShares MSCI Finland ETF (EFNL) and SPDR Solactive Germany ETF (ZDEU). The reasons for the drop in quant scores can be traced to mostly 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 substantial losses, we’d like to highlight the top ETFs within the Energy sector in this week’s Select List. Energy Select Sector SPDR Fund (XLE) moved from the 4th position to claim 1st followed by Invesco DWA Energy Momentum ETF (PXI) which jumped from 5th to 2nd. First Trust Natural Gas ETF (FCG) stayed at 3rd followed by two newcomers to this week’s Select List, VanEck Vectors Oil Service ETF (OIH) in 4th and SPDR S&P Oil & Gas Equipment & Services ETF (XES) in 5th.
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.