Over the past week the Dynamic Global ETF Portfolio added 1.28 percent, while the S&P 500 increased 5.80 percent; the Dow Jones-AIG Commodity Index climbed 6.57 percent; and the MSCI EAFE added 4.09 percent. The top-performing fund in the portfolio over the past week was iShares Malaysia (NYSEARCA:EWM), which was up 7.55 percent.
Year to date, the portfolio is down 4.79 percent, compared to a 0.44 percent rise in the S&P 500 Index, a 1.28 percent drop in the DJ-AIG Commodity Index, and a 2.20 percent decline in the MSCI EAFE. Since inception on May 1, 2008, the Dynamic Global ETF Portfolio has lost 21.85 percent net of fees. By comparison, the S&P 500 decreased 35.63 percent, the DJ-AIG Commodity Index fell 43.26 percent, and the MSCI EAFE dropped 43.09 percent.
PowerShares QQQ (QQQQ) advanced 3.91 percent last week. Technology trailed the financial and resource sectors, among others. Coal stocks were jumping 20 percent per day and financials raced higher ahead of the stress test results. A correction in these stocks should be coming, but a broader correction will drag the tech sector along with it.
iShares Nasdaq Biotech (NASDAQ:IBB) fell 0.20 percent as investors avoided the sector for another week. The bright side is that they will not sell healthcare in a correction because they did not buy it to begin with, although further losses could be in store if the decline is less a correction than another bear move lower.
iShares Malaysia (EWM) climbed 7.55 percent last week. That made it one of the worst performers among international funds we track, although it bested the MSCI EAFE index by more than 3 percent. Investors went for more volatile country funds, such as Brazil, Korea, Turkey, India, China, Thailand and Taiwan, which gained 26 percent for the week.
iShares COMEX Gold (NYSEARCA:IAU) fell 0.44 percent last week. Gold remains in a bearish short-term trend, but it has flat-lined in the past month, down just 0.19 percent, and down 0.12 percent in the past three months. Bulls can take comfort from the fact that gold’s sell-off was mild compared to the equity market rally, indicating that investors are sticking with the metal. That could set the stage for higher ground once the stock market rally runs out of steam.
iShares Barclays 3-7 Year Treasury (NASDAQ:IEI) lost 0.92 percent in the past week. The Federal Reserve didn’t change its policy following last week’s meeting, and weakness in Treasuries continues. We are unlikely to see higher prices until the stock market reverses course or the central bank announces another intervention.
PowerShares DB U.S. Dollar Bearish Fund (NYSEARCA:UDN) increased 2.10 percent last week. The euro regained territory it lost in previous weeks, as CurrencyShares Euro (NYSEARCA:FXE) advanced 2.81 percent for the week. Among major currencies, only the Japanese yen fell versus the U.S. dollar. Although they do not figure into the U.S. dollar index that UDN tracks, the resource currencies were the best performers last week, as would be expected when resource stocks are jumping 10 and 20 percent in one day. These currencies outperform when the dollar is weak and commodities rally. WisdomTree South Africa Rand (NYSE:SZR) advanced 6.10 percent, CurrencyShares Australian Dollar (NYSEARCA:FXA) added 4.02 percent and WisdomTree Brazilian Real (NYSEARCA:BZF) climbed 4.91 percent.
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