Greetings!
Below please find the ETF Spotlight newsletter for
the week of August 30, containing highlights of the research and
data on www.etfresearchcenter.com
as well as a recap of the past week's action in the ETF market. The focus of this week's edition is persistence in profitability. Feel free to share it with others who may be interested. |
In this week's issue
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 Persistence in profitability
- Chart of the week: Surprisingly recession resilient ETFs
- Fund Focus: SPDR S&P Retail ETF (XRT)
- Revisions, asset flows & short interest
- Avg. ROE, std. deviation in ROE, & P/BV multiples for major ETFs
- Market monitor - movers & categories
To download the full newsletter click here. |
| Chart of the week
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Surprisingly Recession Resilient ETFs
High, Low and Average ROE  |
Are we or aren't we headed for a double-dip recession? That is a subject of much debate in the country. We don't profess to know the answer, but taking some defensive measures seems appropriate.
So we ranked our universe of ETFs by their persistence in profitability--that is, the lowest variability in Return on Equity over the course of the business cycle. As you'd expect, a number of sector funds tracking Consumer Staples, Telecom, Utilities and Health Care ranked highly.
But beyond those were a number of surprises, where profitability varies little in good times and bad. The top 10 of these make up the Chart of the Week. The most surprising among them is the SPDR S&P Retail ETF (XRT), which is the subject of this week's Fund Focus.
To download the full newsletter, click here. |
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Fund Focus |
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SPDR S&P Retail ETF (XRT)
Routinely among the most heavily-shorted ETFs, investors are clearly bearish on retailers. But is the pessimism overdone? While we are also bearish on U.S. consumers in general, this particular index includes many counter-cyclical retailers including dollar-stores, discounters and used car dealers that may benefit from a weak economy. As a result, profitability of firms in XRT is remarkably stable (though not terribly impressive), and valuations compare favorably to the larger Consumer Discretionary Sector SPDR (XLY).
To download the full newsletter, click here.
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