{"id":2873,"date":"2022-04-11T17:03:46","date_gmt":"2022-04-11T17:03:46","guid":{"rendered":"http:\/\/blog.valuengine.com\/?p=2873"},"modified":"2022-04-11T17:17:24","modified_gmt":"2022-04-11T17:17:24","slug":"2nd-quarter-us-benchmark-etf-update","status":"publish","type":"post","link":"http:\/\/blog.valuengine.com\/index.php\/2nd-quarter-us-benchmark-etf-update\/","title":{"rendered":"2nd Quarter US Benchmark ETF Update"},"content":{"rendered":"

The first quarter was rather turbulent. But given the unexpected burst of inflation and the savage Russian invasion of the Ukraine, the final price reading of the S&P 500 of -5.2% comes almost as a relief.\u00a0 A late rally in March mitigated the overall damage<\/span><\/p>\n

The ETF reports on ValuEngine that follow market benchmarks provide a side benefit in writing market analyses.\u00a0 They are a window to implicit forecasts for 3-, 6- and 12-month forecasts VE models are making for each benchmark\u2019s ETF portfolio.\u00a0 This is because the ratings and projections combine bottom-up constituent analysis with analyses of the historical price movements of the ETF in different market environments.\u00a0\u00a0\u00a0<\/span><\/p>\n

Financial Advisory Services based on ValuEngine research available: \u00a0 www.ValuEngineCapital.com<\/a><\/b><\/p>\n

The benchmark indexes and ETFs chosen for this feature are:<\/span><\/p>\n

    \n
  1. The S&P 500 Index representing US Large Cap; the ETF is iShares\u2019 SPY<\/strong><\/a><\/span><\/li>\n
  2. The S&P 400 MidCap Index representing US MidCap; the ETF is SPDR\u2019s MDY<\/strong><\/a>;<\/span><\/li>\n
  3. The Russell 2000 Index representing US Small Cap; the ETF is iShares\u2019 IWM<\/strong><\/a>;<\/span><\/li>\n
  4. The Russell 1000 Large Cap Growth Index; the ETF is iShares\u2019 IWF<\/strong><\/a>;<\/span><\/li>\n
  5. The Russell 1000 Large Cap Value Index; the ETF is iShares\u2019 IWD<\/strong><\/a>;<\/span><\/li>\n
  6. The Nasdaq-100, constructed as an index using the top 100 non-financial stocks with primary listing on the Nasdaq, but now regarded as the premier US Big Tech Index; the ETF is Invesco QQQ<\/strong><\/a>.\u00a0<\/span><\/li>\n<\/ol>\n
    Current ValuEngine reports on these ETF\u2019s can be viewed <\/b>HERE<\/b><\/a><\/h5>\n

    Today\u2019s focus is primarily on the 6-month period that will end on September 30, 2022.\u00a0 On the chart that is listed as the ValuEngine forecast for 6-Mo indicating the next 6 months.\u00a0 The data in the summary table are all from April 1, 2022, the last trading date of the quarter that just finished.<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    <\/td>\nMDY<\/b><\/td>\nIWM<\/b><\/td>\nIWF<\/b><\/td>\nIWD<\/b><\/td>\nQQQ<\/b><\/td>\nSPY<\/b><\/td>\n<\/tr>\n
    Market Index Being Tracked<\/span><\/td>\nS&P Midcap<\/b><\/td>\nRussell 2000 Small Cap<\/b><\/td>\nRussell Large Cap Growth<\/b><\/td>\nRussell Large Cap Value<\/b><\/td>\nNasdaq 100\u00a0<\/b><\/td>\nS&P 500<\/b><\/td>\n<\/tr>\n
    ValuEngine Rating<\/span><\/td>\n3<\/td>\n4<\/b><\/td>\n3<\/td>\n2<\/td>\n3<\/td>\n3<\/td>\n<\/tr>\n
    VE Forecast 3-mo. Price Return<\/b><\/td>\n0.5%<\/span><\/td>\n0.5%<\/span><\/td>\n1.3%<\/b><\/td>\n0.4%<\/span><\/td>\n1.2%<\/span><\/td>\n1.1%<\/span><\/td>\n<\/tr>\n
    VE Forecast 6-Mo. Price Return<\/strong><\/td>\n1.0%<\/span><\/td>\n1.2%<\/span><\/td>\n2.4%<\/b><\/td>\n1.4%<\/span><\/td>\n2.3%%<\/span><\/td>\n2.1%<\/span><\/td>\n<\/tr>\n
    VE Forecast 1-yr. Price Return<\/b><\/td>\n-3.2%<\/span><\/td>\n-2.5%<\/strong><\/td>\n-3.3%<\/span><\/td>\n-6.2%<\/span><\/td>\n-3.7%<\/span><\/td>\n-3.9%<\/span><\/td>\n<\/tr>\n
    Historic 3 mo. Price Return<\/span><\/td>\n-4.9%<\/span><\/td>\n-7.9`%<\/span><\/td>\n-9.6%<\/td>\n-1.1%<\/strong><\/td>\n-9.9%<\/span><\/td>\n-5.2%<\/span><\/td>\n<\/tr>\n
    Historic 6 mo. Price Return<\/span><\/td>\n1.0%<\/span><\/td>\n-6.6%<\/span><\/td>\n0.5%<\/span><\/td>\n5.1%<\/strong><\/td>\n0.5%<\/span><\/td>\n4.3%<\/span><\/td>\n<\/tr>\n
    Historic 1-Yr. Price Return\u00a0<\/span><\/td>\n2.4%<\/span><\/td>\n-7.2%<\/span><\/td>\n12.7%<\/span><\/td>\n9.0%<\/span><\/td>\n11.5%<\/span><\/td>\n13.1%<\/strong><\/td>\n<\/tr>\n
    Historic 5-Yr Ann. Price Return<\/span><\/td>\n9.0%<\/span><\/td>\n8.0%<\/span><\/td>\n17.8%<\/span><\/td>\n7.4%<\/span><\/td>\n20.2%<\/b><\/td>\n13.0%<\/span><\/td>\n<\/tr>\n
    Volatility<\/span><\/td>\n19.6%<\/span><\/td>\n21.7%<\/span><\/td>\n16.4%<\/span><\/td>\n16.9%<\/span><\/td>\n17.0%<\/span><\/td>\n15.9%<\/b><\/td>\n<\/tr>\n
    Sharpe Ratio (3-Year)<\/span><\/td>\n0.45<\/span><\/td>\n0.37<\/span><\/td>\n1.03<\/span><\/td>\n0.43<\/span><\/td>\n1.13<\/b><\/td>\n0.82<\/span><\/td>\n<\/tr>\n
    Beta<\/span><\/td>\n1.17<\/span><\/td>\n1.20<\/span><\/td>\n1.04<\/span><\/td>\n1.01<\/span><\/td>\n1.04<\/span><\/td>\n1.00<\/b><\/td>\n<\/tr>\n
    # of Stocks<\/span><\/td>\n400<\/span><\/td>\n2000<\/span><\/td>\n498<\/span><\/td>\n850<\/span><\/td>\n100<\/span><\/td>\n500<\/span><\/td>\n<\/tr>\n
    Undervalued by VE %*<\/b><\/td>\n55%<\/span><\/td>\n70%<\/b><\/td>\n52%<\/span><\/td>\n47%<\/span><\/td>\n51%<\/span><\/td>\n35%<\/span><\/td>\n<\/tr>\n
    P\/B Ratio<\/span><\/td>\n2.6<\/td>\n2.3\u00a0<\/strong><\/td>\n13.2<\/span><\/td>\n2.7<\/td>\n9.3\u00a0<\/span><\/td>\n4.7<\/span><\/td>\n<\/tr>\n
    P\/E Ratio<\/span><\/td>\n20.4<\/strong>\u00a0<\/span><\/td>\n65.5\u00a0<\/span><\/td>\n39.8\u00a0<\/span><\/td>\n21.5<\/td>\n34.1\u00a0<\/span><\/td>\n24.5<\/span><\/td>\n<\/tr>\n
    Div. Yield<\/span><\/td>\n1.1%<\/span><\/td>\n1.0%<\/span><\/td>\n0.5%<\/span><\/td>\n1.7%<\/b><\/td>\n0.5%<\/span><\/td>\n1.3%<\/span><\/td>\n<\/tr>\n
    Expense Ratio<\/span><\/td>\n0.23%<\/span><\/td>\n0.19%<\/span><\/td>\n0.19%<\/span><\/td>\n0.19%<\/span><\/td>\n0.20%<\/span><\/td>\n0.09%<\/strong><\/td>\n<\/tr>\n
    Largest Holding\u00a0\u00a0<\/span><\/p>\n

    % of fund<\/p>\n

    VE Rating<\/span><\/td>\n

    		\u00a0<\/span>TRGP <\/b><\/p>\n

    .7%<\/span><\/p>\n

    VE 2<\/td>\n

    		OVV<\/b><\/p>\n

    .5%,\u00a0<\/strong><\/p>\n

    VE 1<\/td>\n

    		AAPL<\/b><\/p>\n

    12.5%<\/span><\/p>\n

    VE 3<\/td>\n

    		JNJ<\/b><\/p>\n

    2.2% <\/span><\/p>\n

    VE 2<\/td>\n

    		AAPL<\/b><\/p>\n

    12.5%<\/span><\/p>\n

    VE 3<\/td>\n

    		AAPL<\/b><\/p>\n

    7.1%<\/p>\n

    VE 3<\/td>\n<\/tr>\n

    Index Provider<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\nFTSE Russell Indices<\/span><\/td>\nFTSE Russell Indices<\/span><\/td>\nFTSE Russell Indices<\/span><\/td>\nNasdaq<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\n<\/tr>\n
    Index<\/span><\/p>\n

    Scheme<\/span><\/td>\n

    		Mkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting<\/span><\/td>\nMkt. Cap Weighting\u00a0<\/span><\/td>\n<\/tr>\n
    ETF Sponsor<\/span><\/td>\nSPDRs by SSgA<\/span><\/td>\n iShares by Blackrock<\/span><\/td>\n iShares by Blackrock<\/span><\/td>\niShares by Blackrock<\/span><\/td>\nInvesco<\/span><\/td>\nSPDRs by SSgA<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
    All of the approximately 5,000 stocks, 16 sector groups, 140 industries, and 500 ETFs have been updated on <\/b>www.ValuEngine.com<\/b><\/a><\/h5>\n
    Free Two Week Trial to all 5,000 plus equities and ETFs covered by ValuEngine <\/b>HERE<\/b><\/a><\/h5>\n

    In order to frame our forecasts, let\u2019s look at the ValuEngine ranking which summarizes the models\u2019 views on the expected price appreciation of SPY, the SPDR (\u201cspider\u201d) based on the S&P 500 Index.\u00a0 Given its bellwether status as the market\u2019s proxy, a rating of 3 is the norm for SPY.\u00a0 The ValuEngine market forecasts for SPY \u2013 and thus the S&P 500 – will vary from negative to positive depending on our models\u2019 assessments of the current environment and the individual stock analysis of each component of the index.<\/span><\/p>\n

    Focusing on the S&P 500 column in the three rows containing our forecasts, our models expect the market to navigate the next three-to-six months in modestly positive territory.\u00a0 However, with a 12-month forecast of close to -4%, even with a six-month 2% gain, our models forecast a mild correction during the next 12 months.\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n

    Are there segments of the market for which the ValuEngine models have a more positive outlook?\u00a0 The models predict one reversal of historic trends.\u00a0 Although SPY, the large cap S&P 500 ETF has outperformed <\/span>IWM<\/b>, the small cap Russell 2000 ETF, consistently and decisively during the past 5 years, <\/span>IWM <\/b>is the only one of the six benchmark ETFs in this analysis that receives an above average rating of 4 (buy).\u00a0\u00a0<\/span><\/p>\n

    Another interesting change is that AMC Entertainment <\/span>(AMC)<\/b>, formerly the highest weighted position in <\/span>IWM,<\/b> has fallen to second while Ovintiv <\/span>(OVV), <\/b>which was not in the top five at year end, is now the small cap index\u2019s largest position.\u00a0 This reflects the relative outperformance of energy sector stocks in the past few quarters.\u00a0 Another attractive feature of <\/span>IWM <\/b>is that we rate 70% of IWM\u2019s holdings as undervalued, much higher than the 55% in <\/span>MDY<\/b>.\u00a0 Finally, at a time when many strategists are predicting major declines for <\/span>QQQ <\/b>as a result of its high concentration in the five largest technology stocks with 61% or its overall weight in technology, there are no such worries with <\/span>IWM.\u00a0 <\/b>Less than 14% of its weight is in technology and the top 10 holdings comprise just 3.7% of the overall portfolio. In contrast, <\/span>AAPL <\/b>and <\/span>MSFT <\/b>comprise 22.6% of <\/span>QQQ, <\/b>more than five times as much concentration in magnitude.\u00a0\u00a0<\/span><\/p>\n

    Financial Advisory Services based on ValuEngine research available: \u00a0 <\/b>www.ValuEngineCapital.com<\/b><\/a><\/h5>\n

    No matter which of the major six benchmark categories you choose, the differences are not huge in the scheme of long-term returns.\u00a0 Overall, our models say you are likely to enjoy slightly positive returns during the next six months before another minor correction of 5% – 8% between October 1, 2022 \u2013 March 31, 2023.\u00a0 These are guidelines as no models can predict 12 months ahead with that kind of exact precision. As usual, time will tell. The results should be used comparatively, meaning which index the data driven ValuEngine models find most attractive versus most unattractive.<\/span><\/p>\n

    By Herbert Blank<\/span><\/p>\n

    Senior Quantitative Analyst, ValuEngine Inc<\/span><\/p>\n

    www.ValuEngine.com<\/span><\/a><\/p>\n

    support@ValuEngine.com<\/span><\/p>\n

    _______________________________________________<\/span><\/p>\n

    All of the approximately 5,000 stocks, 16 sector groups, 140 industries, and 600 ETFs have been updated on <\/b>www.ValuEngine.com<\/b><\/a><\/h5>\n
    Financial Advisory Services based on ValuEngine research available through <\/b>ValuEngine Capital Management, LLC<\/b><\/a><\/h5>\n
    Free Two Week Trial to all 5,000 plus equities covered by ValuEngine <\/b>HERE<\/b><\/a><\/h5>\n
    Subscribers log in <\/b>HERE<\/b><\/a><\/h5>\n","protected":false},"excerpt":{"rendered":"

    The first quarter was rather turbulent. But given the unexpected burst of inflation and the savage Russian invasion of the Ukraine, the final price reading of the S&P 500 of -5.2% comes almost as a relief.\u00a0 A late rally in March mitigated the overall damage The ETF reports on ValuEngine that follow market benchmarks provide … Read more<\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[130,1,39],"tags":[1986,1760,1790,1719,1987,1731,1845,1928,1834,1833,1989,1617,1510,1990,1938,1988,1726,28,1656,1659,63],"_links":{"self":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/2873"}],"collection":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/comments?post=2873"}],"version-history":[{"count":11,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/2873\/revisions"}],"predecessor-version":[{"id":2884,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/2873\/revisions\/2884"}],"wp:attachment":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/media?parent=2873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/categories?post=2873"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/tags?post=2873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}