FMD Capital Management

Posts Tagged: financials

Should ETF Investors Worry About Their Interest-Rate Sensitive Stocks?

Written by David Fabian, January 24th, 2018

Stocks have come roaring out of the gate to start 2018 as the bull market extends to unprecedented heights. Momentum and volatility-agnostic investors have been treated to a continuation of the same strong trends that dominated last year’s markets. Yet, even with so much enthusiasm spread among the major diversified indices, there remains lackluster sentiment for many interest-rate sensitive stocks and sectors.

Interest-rate sensitivity has traditionally been the realm of fixed-income, where bond prices and bond yields are negatively correlated. Nevertheless, there are many areas of the U.S. equity markets that also key in to the fluctuations of U.S. Treasury yields. The foremost of which are utility, REIT, and financial stocks.

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Does Your ETF Portfolio Need A Trump Transformation?

Written by David Fabian, November 18th, 2016

Everywhere you look now, someone has an opinion about the direction of the markets under a Trump presidency.  There is speculation on everything from the impact of his trade policies to the potential of further deficit spending and legislative changes.  These factors have coalesced to send many sectors of the stock and bond markets into a tizzy as investors grapple for positioning.  Read more

Chart Watch: European Financials

Written by David Fabian, June 20th, 2016

The carnage in banking stocks of developed countries in Europe has been a persistent theme throughout the last year. The combination of adverse economic progress coupled with negative interest rates in many developed countries has wreaked havoc with European financial institutions such as Credit Suisse Group (CS) and Deutsche Bank AG (DB).

One little-known exchange-traded fund that tracks this group is the iShares MSCI European Financials ETF (EUFN). This ETF has $194 million dedicated to a group of 100 European stocks in the financial sector. Top country allocations include the United Kingdom, France, Switzerland, and Germany.

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3 Sectors To Watch In The Second Half Of 2015

Written by David Fabian, July 01st, 2015

The S&P 500 Index was nearly unchanged in the first half of 2015, yet the divergences in underlying sectors told a very different tale. The tepid return in the major averages was generated by weakening in interest rate sensitive areas and continued strength in high growth leadership categories. This tug-of-war style market has created a relative valuation chasm between several important sectors that warrants close attention. Read more

How Interest Rates Are Impacting Utility And Financial ETFs

Written by David Fabian, March 10th, 2015

The dynamic changes taking shape in the bond markets this year have been a wakeup call for fixed-income investors that have been conditioned to ignore the threat of rising rates. Since the beginning of February, the CBOE 10-Year Treasury Note Yield (TNX) has risen from a low of 1.67% to approximately 2.20%.

That move represents an increase of 32% in a very short period of time and has significantly impacted high quality areas of the bond market such as treasury and investment grade corporate securities. This ramp has also been a factor in reshaping several key areas of the equity markets as well.

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