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Wall Street stepped back on Nov 14, after the industrial conglomerate giant, General Electric (GE - Free Report) maintained its steep southward journey. The stock has been suffering due to a dividend cut and issuance of downbeat profit guidance.
To make matters worse, gloom overshadowed the otherwise-recovering oil patch. Oil prices plunged on Nov 14, after the International Energy Agency (IEA) expressed doubts over the prevailing ideas of tightening fuel markets. WTI ETF United States Oil (USO - Free Report) lost about 2.2% and United States Brent Oil (BNO - Free Report) was off about 1.9%.
The agency lowered its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018, as per an article published on Reuters.
Added to these, concerns over the seamless passing of the republican’s tax reform are making investors nervous. The apparently ebbing popularity of Trump is contributing to such threats. Plus, there is the Fed with its reverse QE measure and policy tightening cycle. Per the CME Federal Reserve watch tool, there is a 97% probability of a rate hike in December. And, overvaluation concerns have been rife for quite some time now. There are political tensions in the global market as well.
Against such a scenario, it would be intriguing to see which ETF or investing areas were winners in a phase of stock market downturn. Below we highlight some ETFs which hit a 52-week high on Nov 14.
Low Volatility & Beta
Thanks to the afore-mentioned issues, market complacency appears to have wavered in recent trading. This sense of instability made low-volatility and low beta investments highly coveted and led some ETFs to 52-week highs on Nov 14, 2017. These are PowerShares S&P 500 Low Volatility ETF (SPLV - Free Report) , PowerShares S&P 500 ex-Rate Sensitive Low Volatility ETF (XRLV - Free Report) , iShares Edge MSCI Min Vol USA ETF (USMV - Free Report) , SPDR SSGA US Large Cap Low Volatility ETFLGLV and PowerShares Russell 1000 Low Beta Equity Weight PortfolioUSLB (read: Time to Buy Global Low Volatility ETFs?).
Utility
As equity indexes retreated, safe-haven appeal gained precedence. As a result, bond yields dropped a little. Low bond yields boosted the rate-sensitive and safe sectors like utility. The utility sector is non-cyclical in nature and performs better in a falling rate environment.
JHancock Multifactor Utilities ETF JHMU, Fidelity MSCI Utilities ETF (FUTY - Free Report) , Vanguard Utilities ETF (VPU - Free Report) and Utilities Select Sector SPDR ETF (XLU - Free Report) are some of the sectors that hit a one-year high on Nov 14.
Homebuilding
Home sales in the United States is in a stabilized state currently. Homebuilder confidence ticked up to a six-month high in October. Need for reconstruction post hurricanes have probably given a boost to home sales. This along with slightly lower rates gave ETFs like iShares US Home Construction ETF (ITB - Free Report) and Direxion Daily Hmbldrs&Supls Bull 3X ETFNAIL a boost (read: 3 ETFs to Buy as New Home Sales Surge).
High Dividend
Against the afore-mentioned backdrop, what could be a better bet than PowerShares S&P 500 High Dividend Low Volatility Portfolio (SPHD - Free Report) . The fund yields about 3.48% annually.
Real Estate
This is yet another rate-sensitive sector. REITs’ requirement of debt for their business makes investors cautious about their performance in a rising rate environment. Naturally, in a subdued yield environment and growing economy, iShares US Real Estate ETF (IYR - Free Report) hit a high (read: Forget Rate Tantrums, Bet on REIT ETFs).
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5 ETF Areas Hitting Highs on Market Dip
Wall Street stepped back on Nov 14, after the industrial conglomerate giant, General Electric (GE - Free Report) maintained its steep southward journey. The stock has been suffering due to a dividend cut and issuance of downbeat profit guidance.
Investors were concerned whether an extensive overhaul of the company by the new Chief Executive John Flannery will be successful and adequate to boost its profits, as per Reuters (read: Steer Clear of GE, Bet on These Industrial ETFs Instead).
To make matters worse, gloom overshadowed the otherwise-recovering oil patch. Oil prices plunged on Nov 14, after the International Energy Agency (IEA) expressed doubts over the prevailing ideas of tightening fuel markets. WTI ETF United States Oil (USO - Free Report) lost about 2.2% and United States Brent Oil (BNO - Free Report) was off about 1.9%.
The agency lowered its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018, as per an article published on Reuters.
Added to these, concerns over the seamless passing of the republican’s tax reform are making investors nervous. The apparently ebbing popularity of Trump is contributing to such threats. Plus, there is the Fed with its reverse QE measure and policy tightening cycle. Per the CME Federal Reserve watch tool, there is a 97% probability of a rate hike in December. And, overvaluation concerns have been rife for quite some time now. There are political tensions in the global market as well.
Against such a scenario, it would be intriguing to see which ETF or investing areas were winners in a phase of stock market downturn. Below we highlight some ETFs which hit a 52-week high on Nov 14.
Low Volatility & Beta
Thanks to the afore-mentioned issues, market complacency appears to have wavered in recent trading. This sense of instability made low-volatility and low beta investments highly coveted and led some ETFs to 52-week highs on Nov 14, 2017. These are PowerShares S&P 500 Low Volatility ETF (SPLV - Free Report) , PowerShares S&P 500 ex-Rate Sensitive Low Volatility ETF (XRLV - Free Report) , iShares Edge MSCI Min Vol USA ETF (USMV - Free Report) , SPDR SSGA US Large Cap Low Volatility ETF LGLV and PowerShares Russell 1000 Low Beta Equity Weight Portfolio USLB (read: Time to Buy Global Low Volatility ETFs?).
Utility
As equity indexes retreated, safe-haven appeal gained precedence. As a result, bond yields dropped a little. Low bond yields boosted the rate-sensitive and safe sectors like utility. The utility sector is non-cyclical in nature and performs better in a falling rate environment.
JHancock Multifactor Utilities ETF JHMU, Fidelity MSCI Utilities ETF (FUTY - Free Report) , Vanguard Utilities ETF (VPU - Free Report) and Utilities Select Sector SPDR ETF (XLU - Free Report) are some of the sectors that hit a one-year high on Nov 14.
Homebuilding
Home sales in the United States is in a stabilized state currently. Homebuilder confidence ticked up to a six-month high in October. Need for reconstruction post hurricanes have probably given a boost to home sales. This along with slightly lower rates gave ETFs like iShares US Home Construction ETF (ITB - Free Report) and Direxion Daily Hmbldrs&Supls Bull 3X ETF NAIL a boost (read: 3 ETFs to Buy as New Home Sales Surge).
High Dividend
Against the afore-mentioned backdrop, what could be a better bet than PowerShares S&P 500 High Dividend Low Volatility Portfolio (SPHD - Free Report) . The fund yields about 3.48% annually.
Real Estate
This is yet another rate-sensitive sector. REITs’ requirement of debt for their business makes investors cautious about their performance in a rising rate environment. Naturally, in a subdued yield environment and growing economy, iShares US Real Estate ETF (IYR - Free Report) hit a high (read: Forget Rate Tantrums, Bet on REIT ETFs).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>