ETF Scorecard – May 2nd Edition

ETF Database

Major equity benchmarks advanced higher this week thanks to upbeat economic releases on the homefront and a lack of worrisome developments regarding the ongoing conflict between Russia and Ukraine. Investors cheered on better-than-expected pending home sales data and upbeat employment numbers from ADP, and the ISM manufacturing index beat expectations on Thursday [see also ETF Pick of the Month: One Way to Get Defensive in May Without Selling]. 

To help investors keep up with markets, we present our ETF Scorecard, which takes a step back and looks at how various asset classes across the globe are performing. For most of the return comparisons below, we reference trailing 1-week and trailing 1-month returns; this offers a good insight into the prevailing sentiment in the markets by capturing the performance across short-term and longer-term time intervals [for more ETF news and analysis subscribe to our free newsletter].

Risk Appetite Review

Despite the broad-based rebound, investors scaled back on their risk appetite over the past week as evidenced by Low Volatility stocks outperforming their High Beta counterparts by a fairly wide margin in such a short time frame.

Major Index Review

It’s quite clear that investors have been scaling back on their risk appetites seeing as how small caps are by far the worst performer followed by Nasdaq stocks when considering the trailing one-month returns from this group.

Domestic Sector Review

Investors sought out defensive exposure on the home front this past week, and not surprisingly the utilities and staples sectors turned in the best returns.

Sector Valuations

In terms of valuations, the financial and energy sectors are still the most undervalued in relative terms, while the discretionary and staples sectors are the most overvalued from the group.

Foreign Equity Review

Emerging markets pumped the brakes this week following their rally from the prior two weeks; investors jumped ship to “safer” opportunities overseas this past week as evidenced by the positive returns seen across developed markets. 

Regional Valuations

In terms of valuations, the conflict between Ukraine and Russia continues to keep a lid on growth prospects for Emerging Europe, while domestic equities are still the “most expensive” from the group. 

Fixed-Income Review

Bond yields on investment grade securities inched lower ahead of their lower-credit quality counterparts as investors scaled back on risk in both the debt and equity markets over the past week.

Alternatives Review

Commodities

In the commodity space, silver and oil prices posted the biggest declines over the past week; from a longer-term perspective, natural gas and agricultural commodities are the best performers. 

Currencies

With no major central bank announcement taking place this week, trading activity in the currency market was a bit subdued; from a longer-term perspective, the British pound and Japanese yen are at the head of the pack while the U.S. dollar remains the biggest laggard by far. 

*All data as of market close 5/1/2014.

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Disclosure: No positions at time of writing.

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