Market Overview

No Surprise Here: Global Stocks Pressuring Sector ETFs, S&P Says


In research published today, Standard & Poor's Capital IQ noted that slack performances in international equity markets have been a pain for U.S. sector ETFs this year. Telling is the fact through Monday, only 128 U.S.-listed ETFs and ETNs were positive year-to-date and that's out of a universe of roughly 1,400 exchange-traded products.

More bad news: S&P notes for “the equity ETFs or ETNs that were available for the full period, we found 454 with a negative total return, of which 247 were down more than 10%.”

The research firm noted there were 113 domestic ETFs/ETNs with a positive total return while only five international founds had positive returns above 0% and almost 250 had negative returns.

Among the sector funds positive on a year-to-date basis are the Consumer Staples Select Sector SPDR (NYSE: XLP), the Utilities Select Sector SPDR (NYSE: XLU), the Vanguard Consumer Staples ETF (NYSE: VDC), the PowerShares Dynamic Pharmaceuticals (NYSE: PJP) and the iShares Dow Jones US Pharmaceuticals ETF (NYSE: IHE).

The iShares Dow Jones US Pharmaceuticals ETF is the leader of that pack, up almost 15% year-to-date while the PowerShares equivalent is next line. S&P Capital IQ rates all five funds overweight.

The firm has marketweight ratings on rival ETFs such as the Vanguard Utilities Index Fund; ETF Shares (NYSE: VPU); the iShares Dow Jones US Utilities Sector Index Fund (NYSE: IDU), the First Trust Consumer Staples AlphaDex Fund (NYSE: FXG); and SPDR S&P Retail ETF (NYSE: XRT).

Regarding ETFs that are down more than 50% year-to-date, S&P has a marketweight rating on the Market Vectors India Small-Cap ETF (NYSE: SCIF) and underweight ratings on the Guggenheim Solar ETF (NYSE: TAN) and its rival, the Market Vectors Solar Energy ETF (NYSE: KWT).

Sixteen of the ETFs receiving an Overall Ranking of Overweight had a 12-month yield of more than 3%, while 14 of them had a yield of less than 1%. Thirty-six of the Overweight-ranked ETFs also had an Overall ranking of Overweight in each of S&P three primary analytical categoriesPerformance Analytics, Risk Considerations and Cost Factors, according to the S&P note.

Posted-In: Analyst Color Long Ideas News Sector ETFs Short Ideas Emerging Market ETFs Reiteration After-Hours Center


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