Nasdaq ETFs

With the demand for access to crypto markets through Exchange Traded Funds (ETFs) increasing, issuers are continuing to develop strategies to meet investors’ needs.

KraneShares has established itself over the years as a firm synonymous with investment into China and is the issuer of the immensely popular KraneShares CSI China Internet ETF (KWEB), a fund that tracks the major tech growth companies in China. VettaFi sat down recently with Brendan Ahern, CIO of KraneShares, to discuss the roots of the [...] Read more at ETFtrends.com.

Investors long frustrated by the volatility and low quality associated with some emerging markets equities have options for revisiting the asset class, and environmental, social, and governance (ESG) virtues could set the stage for better long-term outcomes. Some exchange traded funds are geared specifically to meet this demand. One member of that group is the [...] Read more at ETFtrends.com.

South Korea’s economy has been feeling the pangs of global inflation for most the year, culminating in a dismal third quarter performance. However, the Direxion Daily South Korea Bull 3X Shares (KORU) has been showing signs of life, which could mean a comeback could be playing out. In the meantime, the country’s economy has been [...] Read more at ETFtrends.com.

Investors bullish about the run of good news over the last two weeks in the market may want to ask whether it’s time to buy ARKK, the ARK Innovation ETF (ARKK). The strategy has risen significantly from its 52-week low of $33.74 on October 13th as options buyers set themselves up for potential upside that [...] Read more at ETFtrends.com.

With commodities funds still off recent highs, now is an ideal time to get into the asset class.  The Invesco Agriculture Commodity Strategy No K-1 ETF (PDBA) offers actively managed exposure to agricultural commodities – all while bypassing the need for a K-1 tax form, making it an appealing offering for investors. The fund can [...] Read more at ETFtrends.com.

October is looking to be a strong month for markets. Though dipping on Monday, the Dow Jones Industrial Average is on track to have its best month since 1976. And while some investors believe this rally is a sign that the Federal Reserve will stick a soft landing, Sandra Testani, vice president of ETF product [...] Read more at ETFtrends.com.

Investors are moving back into consumer staples ETFs, a tried and true investment strategy for times when the economy is uncertain. The Invesco S&P 500® Equal Weight Consumer Staples ETF (RHS) has seen $202 million in net inflows year to date. After seeing outflows between September 1 and October 13, flows reversed, and the fund [...] Read more at ETFtrends.com.

In a sign that more investors want more guidance in their portfolio and that exchange-traded funds are a better way to invest in strategies of all shapes and sizes, an increased number of actively managed ETFs are hitting the market. Last week saw the launch of six new active ETFs, bringing the total number of [...] Read more at ETFtrends.com.

Looking for a way to diversify your fixed-income portfolio toolset? Collateralized loan obligations, or CLOs, could provide attractive yields relative to similarly-rated bonds and loans. CLOs also provide strong risk protection and offer a floating rate coupon that increases as rates rise. In the upcoming webcast, Rise Above Rising Rates with CLOs and FRNs, Bill [...] Read more at ETFtrends.com.

Since the year’s low on October 12th, the S&P 500 has rallied +9% over the course of just twelve days.  Over that twelve day period, the market index has added 5 “outlier days*” to its total for the year.  Statistically, there should only be 5 outlier days out of every 100 trading days, but this [...] Read more at ETFtrends.com.

Investors can take a look at active ETFs in emerging markets to target innovative companies and sectors primed to thrive despite inflationary headwinds. In the recent webcast, Be Active: Beating Inflation with Innovation, David Dali, head of Portfolio Strategy at Matthews Asia, argued that the emerging markets and Asia, in particular, are attractive investment opportunities [...] Read more at ETFtrends.com.

Wall Street's main indexes rallied sharply on Friday after Apple (AAPL) closed the curtain on big tech earnings with third-quarter results topping estimates. Yet investors had punished other tech giants earlier this week. Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN) and Meta (META) all saw their shares take a nosedive in the wake of their earnings reports.

The strong end to the week for U.S. stocks came even as the U.S. 10-year Treasury yield was rising again above the 4% threshold after falling to 3.91% Thursday. The Fed’s preferred inflation measure (PCE price index - personal consumption expenditures, excluding food and energy) advanced 5.1% on a year-on-year basis in September, slightly below the 5.2% predicted. This data encouraged further bets on a smaller interest rate hike in December. Last but not least, the U.S. economy rebounded in the third quarter, growing at a 2.6% annualized rate, driven by a jump in exports despite a stronger greenback. Yet, the GDP report also showed signs of a broad slowdown as consumer and business spending faltered under surging interest rates and high inflation.

The S&P 500 rose 3.95% week-over-week. Despite this rebound, the benchmark index is down 18.15% so far in 2022, still on track for its biggest decline since 2008. The Dow Jones Industrial Average gained 5.72% or 1,779 points (-9.57% for the year), while the tech-heavy Nasdaq index was up 2.24% (-29.04% year-to-date).

European stocks followed suit while the European Central Bank raised interest rates by 75 basis points as expected. The MSCI EMU jumped +3.71% (-18.16% YTD). The FTSE 100 added +1.12% (-4.56% YTD). Rishi Sunak became UK’s new Prime Minister on 25 October 2022 amid red-hot inflation and deep cost-of-living crisis. Financial markets were unnerved after Truss’ disastrous economic policy missteps. Sunak’s meteoric ascent was broadly welcomed by investors as evidenced by the UK 10-year Gilt yield, down 62 basis points week-over-week. The GBP-USD spiked after the confirmation. One pound could buy a little more than $1.16, up 2.46% on the week.

On the flip side, emerging markets fell again (MSCI EM down 2.25% over the week, down 31.37% YTD), highlighting how depreciating currencies, rising borrowing costs and recession fears shake developing economies. China stocks also tumbled after President Xi secured a third term, heightening fears economic growth will be sacrificed for ideological policies. The Hang Seng index tumbled to its 2008 financial crisis low (down 8.32% for the week, down 36.48% year-to-date). The yuan hit a 14-year low (USD-CNY above 7.25, +14% YTD) as China announced a new leadership team and imposed fresh Covid lockdowns in a number of cities. Foreigner investors are fleeing Chinese stocks at a record pace, tipping the year-to-date net flow into negative territory. 

The Indian stock market appears to benefit from those withdrawals. The Nifty 50 index was up 1.20% over the week and up 2.49% YTD. In Japan, the Nikkei index edged up +0.80% (-5.86% YTD).

Communication Services pushed lower by Meta   

META stocks fell 23.70% after a stark revenue report, extending their losses to more than 70% this year. The GOOG stock (down 4.83% over the week, down 33.25% YTD) also weighed on communication services, the only S&P 500 sector in the red this week (-2.85%) and the worst performer in 2022 (-38.46%). Consumer discretionary (+0.71% for the week, -29.70% for the year, second worst performer in 2022) also pushed the broad market lower as the AMZN stock was in freefall (-13.33% for the week, -37.97% for the year). Amazon, which is widely seen as a bellwether for the global e-commerce industry, hit market sentiment with weak results and gloomy forecast, warning that inflation-wary consumers and businesses had less money to spend.

By contrast, investors piled into the other S&P sectors, including the most defensive such as utilities (+6.48%), consumer staples (+6.09%) and heath care (+5.00%). Industrials shone (+6.73%) as many heavyweights reported better-than-expected quarterly results amid price hikes and higher sales volume. Among them, Caterpillar (CAT) gained 15.30% through the week. In addition to stellar numbers for its third quarter, the world's leading manufacturer of construction and mining equipment has also projected solid revenue growth and a significantly higher adjusted operating profit margin for its fourth quarter.

The IT sector fared well too (+4.28%) as Apple Inc (AAPL) shares jumped 5.75%. The iPhone maker's fourth-quarter results showed some resilience in the face of a weak economy and strong US dollar that have led to disappointing reports from other tech companies such as Microsoft. The MSFT stock fell 2.58% over the week (down 29.87% year-to-date).

Lull in bond markets  

Government bonds snapped a 13-week losing streak. Even if a fourth consecutive 75bp rate hike from the Federal Reserve is fully priced by financial markets, investors expect that the central bank language will be a little softer next week, keeping the option open for slower hikes ahead (50bp in December for instance). A view that got some traction recently (cf. San Francisco Fed President Mary Daly’s dovish comments last week). Should the Fed confirm a 75bp rate hike on 2 November, the effective funds rate would move up to 3.83% (3.08% + 0.75%), compared with the 4.8% terminal rate currently expected by financial markets (according to Fed funds futures). Last week, Former Treasury Secretary Larry Summers tweeted that the increase in the terminal rate to above 5% is “a kind of milestone.” 

For the week, the yield on the 10-year Treasury retreated 21 basis points to 4.01% from 4.22%. The UTEN single bond ETF that invests in the 10-year US Treasury note was up 1.97% (down 1.70% month-to-date). The 2-year Treasury yield closed at 4.41%, falling by around 7 basis points.

In Europe, the ECB raised interest rates by 75 basis points as expected. The German 10-year yield lost 32 basis points over the week (2.10%) while the French OAT yield with the same maturity closed at 2.60% (-39 basis points). The Italy Government Bond 10Y outperformed, reducing its yield premium over German bunds by as much as 31 basis points to 205 basis points. In the UK, Rishi Sunak’s nomination as prime minister was broadly welcomed by investors. The UK 10-year Gilt yield slipped by about 62 basis points to 3.47%. The GBP-USD spiked after the confirmation. One pound could buy a little more than $1.16, up 2.46% on the week.

Falling yields gave a boost to the riskiest bond classes. Investment grade corporate bond prices were up +2.08%* in Europe (-13.78% year-to-date) and up +2.38%** in the U.S. (-20.89% year-to-date). High-yield bonds gained +1.67% in Europe*** (-12.39% year-to-date) and +2.74% in the U.S.**** (-9.29% year-to-date).

Emerging debt***** also rallied (+1.71% in local currencies, -21.44% year-to-date).

 

*Markit iBoxx Euro Liquid Corporates TR Index 

**Bloomberg Barclays Global Aggregate Corporate Bond TR Index

***Markit iBoxx EUR Liquid High Yield TR Index

****Markit iBoxx USD Liquid High Yield Capped TR Index 

***** Bloomberg Barclays Emerging Markets TR Index

Tricks or Treats abound in the market, so to cut through the scary market vibes, VettaFi vice chairman Tom Lydon was on Bob Pisani’s ETF Edge along with JP Morgan global head of ETF solutions, Bryon Lake, who runs the largest actively managed ETF in the world, the JPMorgan Ultra-Short Income ETF (JPST). “The rising [...] Read more at ETFtrends.com.

Joining a key trend in the ETF space, Franklin Templeton announced Monday that it launched two converted ETFs, growing its actively-managed US large-cap value and international growth lineups. The two strategies, the BrandywineGLOBAL–Dynamic US Large Cap Value ETF (DVAL) and the Martin Currie Sustainable International Equity ETF (MCSE), are the firm’s first mutual funds to [...] Read more at ETFtrends.com.

The ALPS Clean Energy ETF (ACES) is leading in one-week returns across ALPS’ lineup of ETF offerings. ACES increased 7.55% during the one-week period trailing October 28, a reversal from its negative performance earlier in the month due to higher interest rates and weak economic growth darkening the outlook for clean energy companies. Clean energy [...] Read more at ETFtrends.com.

With Breast Cancer Awareness Month coming to an end, it is important to remember that there many financial institutions that support good causes. VettaFi, hosts of the upcoming ETF Conference Exchange: An ETF Experience, has donated to the Breast Cancer Research Fund which recently launched a global data hub to help expedite research around the [...] Read more at ETFtrends.com.

WisdomTree’s Office Hours is a weekly series for financial advisors that features the firm’s thought leadership addressing contemporary happenings in markets and the economy. This week’s Office Hours takes on the volatility in Chinese stocks and looks at emerging market potential in the near term on Tuesday, then will feature an hour-long discussion on the [...] Read more at ETFtrends.com.

Real estate has had a historical role as a 3%–5% diversifier within equity and bond portfolios, but in the changing and challenged markets of 2022, real estate investment trusts (REITs) and the real estate sector broadly have proven to be fairly correlated to equities. Given both the outperformance of managed futures, a trend-following strategy that [...] Read more at ETFtrends.com.

Industry organization Women in ETFs announced Monday that it had surpassed 8,000 members around the world. Launched in January 2014, the non-profit supports professional advancement for women in the industry by connecting men and women and guiding the current and next generation of women excelling in ETFs. Women in ETFs also offers a mentorship program [...] Read more at ETFtrends.com.