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ETF Scorecard: November 18 Edition

To help investors keep up with the markets, we present our ETF Scorecard. The Scorecard takes a step back and looks at how various asset classes across the globe are performing. The weekly performance is from last Friday’s open to this week’s Thursday close.

Markets have rallied again this week as Donald Trump’s victory in the U.S. presidential election turned investors bullish on the stock market and the economy. Federal Reserve Chair Janet Yellen strongly hinted that a rate hike will come soon, probably at the next mid-December meeting. Yellen also said she intended to serve a full-term, despite Trump saying he intended to remove her. In the U.S., consumer sentiment edged up in November to 91.6, beating estimates of 86.5. In Japan, GDP rose 0.5% in the third quarter against forecasts of just 0.2%. On an annualized basis, the Japanese economy grew by 2.2% in the third quarter, beating consensus of 0.8%. Chinese industrial production came in at 6.1% in October versus forecasts of 6.2%. Inflation in Britain fell to 0.9% in October from 1.0% in September, withstanding a sudden fall in the value of the pound related to the Brexit. However, there are signs consumer prices may continue to rise in the future. U.S. retail sales rose 0.8% in October compared to a revised 1.0% in the previous month. The figure is better than what analysts had expected – an increase of 0.6%. Industrial production in the U.S. was flat in October compared to a revised fall of 0.2% in September. U.S. crude oil inventories grew 5.3 million barrels in the past week compared with a 2.4 million barrels rise in the previous week. U.S. oil rigs have decreased by one last week, while in Canada as many as 22 new rigs opened. Worldwide, the number of rigs fell by 14. The U.S. housing market index stood flat in November at 63, in line with expectations. Inflation in the U.S. increased 0.4% in October and 1.6% year-over-year, boosting chances considerably for a December rate hike. U.S. unemployment claims dropped significantly in the past week to 235,000 versus expectations of 257,000, providing further evidence of an improving economy.

Risk Appetite Review

The broad market (SPY A) increased 1.35% this week, as the bull run triggered by Trump’s unexpected win in the presidential election continued. High Beta ETF (SPHB B-) was again the best performer of the week with a 2.71% increase. Low volatility (SPLV A) was the worst performer, jumping 0.72%.

Major Index Review

Markets were all up for the week, with one exception. iShares Russell 2000 Index (IWM B+) has jumped 4.21% this week, representing the best performance of the bunch. For the rolling month, (IWM B+) has also beaten all other indexes with a gain of 7.23%. Worth noting that (IWM B+) has posted the best performance for two consecutive weeks, likely boosted by Trump’s rhetoric focusing on U.S. businesses. Small U.S. firms are expected to gain from a decrease in globalization, a goal seemingly pursued by Trump. iShares MSCI EAFE Index Fund (EFA A), an ETF containing equities from Europe and Australasia, has posted the worst performance for the week, dropping 0.57%. Emerging markets (EEM A-), meanwhile, were the worst performers for the rolling month, tumbling 7.26%, as many developing countries such as China, Mexico and Brazil are weighing the potential impact of a Trump presidency. Trump pledged in favor of renegotiating trade agreements such as NAFTA, a move that could have a deep impact on the Mexican economy. Use our Head-to-Head Comparison Tool to compare two ETFs such as (EEM A-) and (EFA A) on a variety of criteria like performance, AUM, trading volume and expenses.

Foreign Equity Review

Foreign ETFs were mixed. Russia (RSX B+) was the best performer this week with a 1.69% rise, as Trump’s favorable view of the country bolstered bets the U.S. would push for easing economic sanctions. (RSX B+) was the second best performer for the rolling month, surging 0.92%. Germany (EWG B+) has fallen 1.84% over the past five days, underperforming all other peers, largely because third-quarter GDP growth of 0.2% came in lower than the expected 0.3%. Brazil (EWZ B+) was the worst performer for the rolling month, dropping a stunning 12.44%, as a rally sparked by a promise of government reforms and by recovering commodity prices seems to have ended. Japan (EWJ A) was the best performer for the rolling month, rising 0.93%. To find out more about ETFs exposed to particular countries, use our ETF Country Exposure Tool. Select a particular country, such as Japan, from the world map and get a list of all ETFs with exposure to that country.

Commodities Review

Commodities were mixed for the week. Oil (USO A) has risen 2.53% this week, posting the best performance of the bunch, despite a strong dollar weighing negatively on the commodity. Hopes of OPEC countries agreeing on a production cut underpinned oil prices. Copper (JJC A) was the best performer for the rolling month, surging by an astonishing 19.98%, largely because of optimism Trump’s infrastructure spending plans will boost demand for the commodity. With a drop of 9.43%, silver (SLV C+) was the worst performer for the week, as the metal suffered on the back of a risk-on approach from investors. Natural gas (UNG B-) has been the worst performer for the rolling month with a drop of 23.39%, as the latest data showed stockpiles were increasing because of warm weather hurting demand.

Currency Review

The dollar confirmed its supremacy over all other currencies this week. Check out the previous ETF Scorecard: November 11 Edition for comparison purposes of ETFs mentioned on a week-over-week basis and for more information about the dollar’s past performance. The U.S. dollar (UUP A) has been the single riser this week with a gain of 2.27%. For the rolling month, the currency is up 3.16%, representing the best performance. Trump’s promise to cut taxes and invest in infrastructure boosted chances of a pickup in inflation and interest rates, underpinning the U.S. dollar. On top of that, the Federal Reserve strongly signaled it would raise interest rates at the next meeting in December. For more on how various sectors of the economy could perform under a Trump presidency, read Trump’s Victory. The Japanese yen dropped 3.27% this week and 5.31% for the rolling month, underperforming all other currencies for both periods. The strong dollar undoubtedly had a negative influence on the currency, along with the risk-on mood in the market.

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Disclosure: No positions at time of writing.

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