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ETF Scorecard: September 22 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.

U.S. Federal Reserve left its key interest rates unchanged at 1.25%, but made clear it will start to unwind its $4.5 trillion balance sheet next month. The move is expected to reduce liquidity in the markets, although the Fed suggested it will move slowly so as not to spook investors. The Fed said it will not reinvest the proceeds from its bond portfolio and allow $10 billion to roll off at the beginning. It will gradually increase that amount by $10 billion per quarter until it hits $50 billion. The Fed also cut inflation expectations from 1.7% this year to as little as 1.5%, below its target of 2%. In 2018, it expects inflation to hit 1.9%. The central bank also did not rule out another interest rate hike this year. Bank of Japan kept its ultra-loose monetary policy steady and struck an upbeat tone about the economy. BoJ suggested it was on track to reach its goal of 2% inflation. As expected, BoJ kept the interest rate of 0.1% it charges on deposits. However, a new policymaker dissented, suggesting the current monetary policy is too tight to achieve the 2% inflation goal by 2019. U.S. retail sales fell 0.2% in August, disappointing analysts, who on average expected an increase of 0.1%. Core retail sales rose 0.2%, but pundits had expected a 0.5% advance. U.S. industrial production dropped a staggering 0.9% in August, compared to a revised increase of 0.4% in the previous month. Housing starts rebounded in August, in part due to the positive effects of the twin hurricanes in Florida and Texas. Starts increased to 1.18 million in August, beating estimates of 1.17 million. In the previous month, starts came in at just 1.15 million. U.S. existing home sales fell by 1.7% to 5.35 million in August, missing estimates of 5.48 million. Crude oil inventories rose for the third straight week. In the September 15 week, stockpiles jumped by 4.6 million. In the previous week, they advanced by 5.9 million. U.S. unemployment claims fell back to normal levels, after the previous week registered a spike due to the negative effects of Hurricanes Harvey and Irma. In the September 16 week, claims stood at 259,000, significantly below the 303,000 expected by analysts.

Risk Appetite Review

Risky assets had a wonderful run, with High Beta (SPHB B-) soaring 3.74% this week. Low volatility (SPLV A) was the worst performer with a rise of just 0.33%. The broad market (SPY A) rose just 0.59%, feeling the pinch of a relatively hawkish Federal Reserve. Sign up for ETFdb.com Pro and get access to real-time ratings on over 1,900 U.S.-listed ETFs.

 

Major Index Review

Global equities were mostly up. The small-cap index (IWM B+) rose the most this week, staging impressive gains of 1.45%. (IWM B+) also had a great month, surging 6.23% over the past 30 days. The technology index (QQQ A-) was the single faller from the bunch this week, down 0.76%, primarily due to the negative influence of Apple (AAPL). The iPhone-maker raised concerns about connectivity issues in the new version of its smartwatch. (QQQ A-) was also the worst performer for the rolling month, rising just 1.88%. To see how these indices performed last week, check out ETF Scorecard: September 15 Edition.

 

Sectors Review

The financial sector (XLF A) is again the best performer this week, as insurance stocks continued their recovery from the twin hurricanes. Investors had mistakenly expected bigger losses for the sector. Consumer staples (XLP A) is the worst-performing sector both for the week and the rolling month, down 2.14% and 2.44%, respectively. The energy industry (XLE A) is the best performer for the rolling month, with an increase of 7.54%.

 

Foreign Equity Review

Foreign stocks were rather mixed this week. China’s equity market (FXI A-) was by far the best performer this week, with an advance of 2.30%. India (EPI B+), meanwhile, was the poorest performer with a drop of 2.06%. The weak performance weighed on (EPI B+)’s monthly returns, which were the lowest from the pack at 1.63%. For the rolling month, Brazil (EWZ B+) remains the biggest monthly gainer with a jump of 7.87%. To find out more about ETFs exposed to particular countries, use our ETF Country Exposure tool. Select a particular country from a world map and get a list of all ETFs tracking your pick.

 

Commodities Review

Commodities were almost all down. After a few bad weeks, Agriculture (DBA A) started to recover some of the losses, with (DBA A) becoming the best weekly performer with a gain of 1%. Silver (SLV C+) lost its shine this week, as investors shunned safe-haven assets. (SLV C+) dropped more than 4%. Oil (USO A) is the best monthly performer, having benefited from refinery shutdowns in Texas. (USO A) is up 5%. Copper (JJC A) posted the worst monthly performance, declining 2.97%. Use our Head-to-Head Comparison tool to compare two ETFs such as (SLV C+) and (JJC A) on a variety of criteria such as performance, AUM, trading volume and expenses.

 

Currency Review

The Japanese yen (FXY C+) lodged the biggest losses this week, down 1.6%, as it lost its safe-haven status appeal. (FXY C+) is also the poorest performer for the rolling month, with a decline of more than 3%. The only currency that gained this week was the U.S. dollar (UUP A), up 0.46%. For the rolling month, however, the British pound (FXB A-) is the biggest gainer with 5.74%, as investors cheered Bank of England’s signal that it may finally raise rates in the coming months.

 

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