ETF & Mutual Fund Watchlist for July 6, 2016

SPDR S&P 500 (SPY)

iShares Core High Dividend (HDV)

Vanguard Dividend Appreciation (VIG)

Vanguard High Dividend Yield (VYM)

iShares MSCI Edge Minimum Volatility USA (USMV)

Dividend-paying funds continued to outperform through last week’s post-Brexit rally. Purer high-yield funds and those with heavy defensive sector exposure are reaping the greatest benefits, though dividend growth funds are also ahead of the broader market. USMV has gained more than 4 percent over the past month, while HDV rallied more than 2 percent. VIG and VYM saw smaller gains.

iShares 20+ Year Treasury (TLT)

iShares iBoxx $ Investment Grade Bonds (LQD)

The more volatile TLT is up 8 percent since the Brexit vote, while LQD has gained 3 percent.

Fidelity Select Insurance (FSPCX)

Fidelity Select Banking (FSRBX)

Fidelity Select Consumer Finance (FSVLX)

iShares MSCI Europe Financials (EUFN)

iShares MSCI EAFE Index (EFA)

iShares MSCI Italy (EWI)

European banks continued to plague European equity funds last week, while the domestic market was unaffected. The chart below compares EUFN to the SPDR S&P 500 Index (SPY) to illustrate the disparity. Italy’s Prime Minister recently threatened a bank bailout in violation of European Union rules, further fueling regional economic concerns.

Fidelity Floating Rate High Income (FFRHX)

DoubleLine Core Fixed Income (DLFNX)

Thompson Bond (THOPX)

Fidelity Corporate Bond (FCBFX)

Fidelity High Income (SPHIX)

Fidelity Corporate Bond (FCBFX) led this group of bond funds last week. Corporate and investment-grade bonds have outperformed through Brexit volatility and remain attractive versus below-zero interest rates in Japan and Switzerland.

Indexes & Sectors

The S&P 500 Index rebounded nicely, led by a 3.5-percent advance in consumer staples. A decline in oil prices held the energy sector to a smaller gain.

SPDR S&P 500 Growth (SPYG) outperformed Value (SPYV) last week to break value’s short-term uptrend, though the fund remains on the positive trajectory it established in February.

SPDR Biotech (XBI) advanced nearly 6 percent on the week.

SPDR Energy (XLE)

First Trust ISE-Revere Natural Gas (FCG)

Market Vectors Gold Miners (GDX)

Energy remains in a trading range as oil prices bounce around the upper $40 level. Prices haven’t fallen below $46 a barrel since mid-May. The extremely volatile natural gas market is in the midst of a correction, following a 50 percent rally from mid-May. FCG peaked in early June and investors steered clear of the natural gas rally.

Agricultural commodities have also traded lower since early June, though it would take a drop below $21 to threaten the short-term bullish picture.

Gold and Gold miners are trading at 52-week highs, increasing the likelihood of a significant short-term correction.


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