FMD Capital Management

Posts Tagged: xlu

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.

Read the complete article at NASDAQ.com

Defensive ETFs Are Surging Despite All-Time Highs In Stocks

Written by David Fabian, February 28th, 2017

The strength of broad domestic stock market indices in 2017 has been the dominating story in global financial markets.  The expectation of new government policies, coupled with the lack of risk asset volatility, has many investors feeling confident in a continuation of the bullish trend.

As of last week, ETFs trading in the United States have accumulated over $75 billion in fresh capital inflows since the start of the year.  The majority of that money has gone towards stock-focused index funds such as the SPDR S&P 500 ETF (SPY).

Read the complete article at NASDAQ.com

The Fear Trade Is Falling Apart

Written by David Fabian, October 05th, 2016

The fear trade has been one of the most successful avenues for investors to take part in this year.  Treasury bonds, gold, utilities, consumer staples, and REITs have all been a big contributor to outsized gains versus a traditional basket of diversified stocks and bonds.  These sectors are well-known defensive plays that tend to perk up during periods of duress in stocks or as interest rates fall.  They are also beloved by income investors as a meaningful pickup in yield versus a conventional Treasury bond or S&P 500 Index fund.  Read more

Utility ETFs Have Turned The Corner With Interest Rates

Written by David Fabian, August 18th, 2015

The first half of 2015 was a disappointment for exchange-traded funds that track utility stocks. These ETFs were broadly sold as investors banked profits from solid performance in 2014 and worried about the implications a rising rate environment. The threat of a Federal Reserve rate hike coupled with an overshoot to the upside in intermediate-term U.S. Treasury bond yields created a headwind for this defensive sector.

Read the complete article at NASDAQ.com

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