Another benefit ETFs (Exchange Traded Funds) bring to the table …

As this week kicks off on a positive – last Friday’s blow-off in US NFP, respectively Tesla deliveries spiking up nicely, I find myself reviewing what we just all went through in March.

And that is where “another benefit ETFs bring to the table” comes in, namely as it is a great way via a few charts, to capture what is, or isn’t changing in terms of specific areas of the markets to which ETFs provide handy entry …

So here we go:

As I came across a great piece by David Rosenberg on LinkedIn regarding the relative valuation of Canada vs the US, both at the macro index level and at the sector level – you may wish to give it a read here: Click HERE!

I remind myself that I had collected a few pics recently illustrating what is happening in the market in terms of specific areas – and so here they are:

China and the “Internet” … dented further by Archego’s “shenanigans” respectively “liquidation”?

Emerging markets … Sensitive to recent USD strength (universal bearish bias seems to be tempering given the recent rise in bond yields …): the “pause” that refreshes aka poised for a rebound soon?

As “Value” rose up from its ashes starting a few months back, is “momentum” out of fashion?

Well, here is Momentum globally as seen through Vanguard’s Global Momentum ETF available here in Canada:


Versus Value (also Global exposure) as … also available in Canada via Vanguard ETF:

Conclusion: Value won the March contest … again … likely more to come IMO, although not writing off the momentum factor (which I think may continue to have legs).

Obviously, the combo of Small Cap AND Value has gained quite a bit of press in recent months as well, AND, iShares launched an ETF just ahead of that (believe it or not …) – so much for the notion that ETFs are launched at the top:


BTW – those “rising” yields giving markets a bit of heartburn in the past 4-6 … or is it 8 weeks:

Here is the 20-year (watch out duration … ) long treasuries ETF. The bottom line for me: be careful with that knife.

I call this one the “Armaggedon” trade … if world ending, you want to grab some. When optimism returns … better not be “stuck” with it…

US Financials – standing to benefit from steepening yield curve, respectively strong economic rebound, and from the reinstatement of either dividend increases, respectively share buybacks …

Canadian Energy – after significant strength post-vaccine news … March marked a pause … BUT – as highlighted in David Rosenberg’s piece, an attractively priced sector in Canada … (disclosure: I have exposure in several ways: long stocks, long derivatives) … (Note to file … worst trade EVER if wave 3 wins out and shuts everything down again … any other exposures you know of that went deeply negative as in need to pay someone to get the stuff off your hands last what was it … April/May on the crude futures rolls/deliveries?) Careful with that one … BUT should / could pay off handsomely …

and voila, c’est tout pour l’instant. Stay safe out there … or more to the point in where ever you are forced to quarantine… take care!