{"id":2886,"date":"2022-04-22T16:01:03","date_gmt":"2022-04-22T16:01:03","guid":{"rendered":"http:\/\/blog.valuengine.com\/?p=2886"},"modified":"2022-04-22T16:01:03","modified_gmt":"2022-04-22T16:01:03","slug":"rotating-industry-and-strategy-etfs-ytd-2022","status":"publish","type":"post","link":"http:\/\/blog.valuengine.com\/index.php\/rotating-industry-and-strategy-etfs-ytd-2022\/","title":{"rendered":"Rotating Industry and Strategy ETFs YTD 2022"},"content":{"rendered":"

Between inflation skyrocketing beyond expectations, the drumbeats of war and increasing global sanctions on Russian Oil, macroeconomic themes have dominated the 2022 stock market 15 weeks into the year.\u00a0 Throwing out derivatives-based ETFs, the top 11 US ETFs ranked by price performance this year are primarily focused on energy companies.\u00a0\u00a0<\/span><\/p>\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

The top three energy companies covered by ValuEngine are:<\/span><\/p>\n

XES, <\/b>SPDR S&P Oil & Gas Equipment & Services ETF;<\/span><\/p>\n

IEZ, <\/b>iShares U.S. Oil Equipment & Services ETF;<\/span><\/p>\n

PXE, <\/b>Invesco Dynamic Energy Exploration & Production ETF<\/span><\/p>\n

XES <\/b>and <\/span>IEZ\u00a0 <\/b>(both rated 4 by ValuEngine, Outperform) are both quite similar and focused on equipment and services companies led by Schlumberger (SLB, VE rating = 3<\/span>, <\/b>market performer<\/span>) <\/b>and Halliburton (HAL, VE rating = 3<\/span>, <\/b>market performer<\/span>). <\/b>\u00a0Conversely, <\/span>PXE <\/b>is rated <\/span>1 <\/b>(greatly underperform) by ValuEngine. This is a counterintuitive, but important distinction given that all three are in the Energy sector. But the industry groups for their largest holdings differ. <\/span>PXE<\/b> holdings are led by Occidental Petroleum <\/span>(OXY, <\/b>VE rating = 3<\/span>, <\/b>market performer<\/span>) <\/b>and Valero Energy (<\/span>VLO, <\/b>VE rating = 2<\/span>, <\/b>underperform<\/span>).\u00a0 <\/b>Therefore, our models see the spike in interest in drilling companies as a cyclical trend that is destined to lose steam eventually in contrast to the equipment manufacturers that are perceived as having stronger balance sheets and earnings streams. Nevertheless, beyond a few years and using a lens for stocks and ETFs that investors should look to hold for the next five years, most analysts would agree that firms dependent on demand for carbon-based energy products will not be the best place for long-term investors to put their money.\u00a0 So, not only the overall economic Sector but the more defined industry category matters in analyzing ETFs even in a sector-rotation focused market.<\/span><\/p>\n

Indeed, the list of top 60 performing ETFs year-to-date as of April 15, 2022, is dominated by sector and industry ETFs, followed by ETFs holding high dividend yield and low volatility stocks.\u00a0 For each group, the ETFs fitting one of these categories have moved \u2018in sync\u2019 from week to week thus far.\u00a0 All of these ETFs and 42 more fitting these categories have positive returns year-to-date bucking the overall market trends.\u00a0<\/span><\/p>\n

The pronounced rotational character of this market is why we refer to this as a \u201cVolleyball Stock Market.\u201d In turn, each sector rotates until its turn to \u201cserve.\u201d\u00a0 So, in lieu of detailing the top seven performing ETFs all in the energy sector, this analysis takes more of a stratified sampling approach.\u00a0 This week\u2019s analytic table contains the top performing ETFs in each sector or industry group as the first one fitting a new category appears in the list.\u00a0 The data available from ValuEngine reports is supplemented with data and reports made available by ETF.com.<\/span><\/p>\n

This week\u2019s analysis includes one top performer in each of 7 categories. The final two ETFs are included as comparative benchmarks.<\/span><\/p>\n

XES, <\/b>SPDR S&P Oil & Gas Equipment & Services ETF. XES <\/span>tracks an equal-weighted index of companies in the oil & gas equipment and services sub-industry of the S&P Total Market Index;<\/span><\/p>\n

XME, <\/b>SPDR S&P Metals & Mining ETF. XME <\/span>tracks an equal-weighted index of US metals and mining companies;<\/span><\/p>\n

FEDX, <\/b>Emles Federal Contractors ETF. FEDX tracks a market-cap-weighted index of fundamentally-selected US firms that derive a large portion of their revenue from Federal contracts;<\/span><\/p>\n

FTXG, <\/b>First Trust Nasdaq Food & Beverage ETF. FTXG follows a liquidity-selected, multi-factor-weighted index of US food & beverage companies;<\/span><\/p>\n

IAK<\/b>, iShares US Insurance ETF. IAK tracks a market-cap index of US insurance companies;<\/span><\/p>\n

FDL<\/b>, First Trust Morningstar Dividend Leaders; FDL tracks a dividend-weighted index of US companies with consistent and sustained dividend payments. The fund holds roughly 100 securities and excludes REITs.<\/span><\/p>\n

DIVZ, <\/b>TrueShares Low Volatility Equity Income ETF; DIVZ holds an actively-managed, concentrated portfolio of US-listed companies that are favorably valued and have attractive dividends. The fund also seeks to deliver lower volatility than the overall market.<\/span><\/p>\n

RSP, <\/b>Invesco S&P 500 Equal Weight ETF, tracking an equally weighted index of S&P 500 companies that is rebalanced quarterly.\u00a0 It is included as a 2<\/span>nd<\/span> benchmark because most of the outperforming strategies YTD have not been weighted by market capitalization.<\/span><\/p>\n

SPY, <\/b>SPDR S&P 500 Index ETF Trust; SPY tracks a market-cap-weighted index of US large- and midcap stocks selected by the S&P Committee.<\/span><\/p>\n

Current ValuEngine reports on these ETF\u2019s can be viewed <\/b>HERE<\/b><\/a><\/h5>\n

Interestingly, although SPDRs by State Street, iShares by BlackRock, First Trust and Invesco are among the best-known ETF providers, Emles Advisors and TrueShares are not.\u00a0 Both are part of a growing trend during the past few years of financial services and hedge fund entrepreneurs starting ETF companies with specific concepts in mind.\u00a0 Emles ETFs tend to use algorithmic indexes to mimic active management strategies while TrueShares is 100% active by design.\u00a0 Other innovative new families fitting the general description include: Asymmetric Shares; Engine No. 1; R3; and V-Square. It is difficult enumerating all that have launched since 2018 and the legion just keeps expanding.\u00a0\u00a0<\/span><\/p>\n

That said, the analytic table below shows as many differences as similarities of the top-performing category beating ETFs in the first 15 weeks of 2022.\u00a0 Let\u2019s take a closer look.<\/span><\/p>\n

 <\/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\n\n
<\/td>\nXES<\/b><\/td>\nXME<\/b><\/td>\nFEDX<\/b><\/td>\nFTXG<\/b><\/td>\nIAK<\/b><\/td>\nFDL<\/b><\/td>\nDIVZ<\/b><\/td>\nRSP<\/b><\/td>\nSPY<\/b><\/td>\n<\/tr>\n
Market Index Being Tracked<\/span><\/td>\nSPDR S&P Oil & Gas Equip & Svcs\u00a0<\/b><\/td>\nSPDR S&P Metals & Mining<\/b><\/td>\nEmles Fed. Contractors<\/b><\/td>\nFirst Trust Nasdaq Food & Bev.<\/b><\/td>\niShare\u00a0<\/b><\/p>\n

US Insurance\u00a0<\/b><\/td>\n

First Trust Morningstar Div. Leadrs<\/b><\/td>\nTru-Shares Low Vol. Equity Inc.\u00a0<\/b><\/td>\nInves-co Equal-Weighted S&P 500<\/b><\/td>\nSPDR S&P 500<\/b><\/td>\n<\/tr>\n
Type\u00a0<\/span><\/td>\nSingle Industry<\/span><\/td>\nSingle Industry<\/span><\/td>\nSingle Industry<\/span><\/td>\nSingle Industry<\/span><\/td>\nSingle Industry<\/span><\/td>\nAlgo -Diversified with Income Tilt\u00a0<\/span><\/td>\nActive -Diversified with Low Vol and Income Tilts<\/span><\/td>\nUS Market<\/span><\/td>\nUS Market<\/span><\/td>\n<\/tr>\n
VE Rating<\/span><\/td>\n4<\/b><\/td>\n1<\/b><\/td>\n4<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n2<\/b><\/td>\n2<\/b><\/td>\n3<\/b><\/td>\n3<\/b><\/td>\n<\/tr>\n
VE Forecast 3-mo. Price Return<\/b><\/td>\n1.6%<\/span><\/td>\n0.5%<\/span><\/td>\n1.5%<\/span><\/td>\n1.2%<\/span><\/td>\n0.6%<\/span><\/td>\n0.7%<\/span><\/td>\n0.7%<\/span><\/td>\n1.2%<\/span><\/td>\n1.1%<\/span><\/td>\n<\/tr>\n
VE Forecast 6-Mo. Price Return<\/span><\/td>\n1.9%<\/span><\/td>\n1.2%<\/span><\/td>\n2.9%<\/span><\/td>\n2.7%<\/span><\/td>\n1.3%<\/span><\/td>\n1.4%<\/span><\/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-2.0%<\/span><\/td>\n-8.2%<\/span><\/td>\n-2.6%<\/span><\/td>\n-6.9%<\/span><\/td>\n-6.1%<\/span><\/td>\n-4.3%<\/span><\/td>\n-3.9%<\/span><\/td>\n-3.1%<\/span><\/td>\n-3.9%<\/span><\/td>\n<\/tr>\n
YTD Price Return<\/span><\/td>\n60.2%<\/b><\/td>\n47.2%<\/span><\/td>\n12.4%<\/span><\/td>\n9.7%<\/span><\/td>\n9.4%<\/span><\/td>\n8.1%<\/span><\/td>\n6.3%<\/span><\/td>\n-4.0%<\/span><\/td>\n-7.5%<\/span><\/td>\n<\/tr>\n
Historic 6 mo. Price Return<\/span><\/td>\n32.8%<\/span><\/td>\n49.2%<\/b><\/td>\n-6.2%<\/span><\/td>\n14.2%<\/span><\/td>\n10.7%<\/span><\/td>\n14.5%<\/span><\/td>\n6.2%<\/span><\/td>\n2.3%<\/span><\/td>\n2.3%<\/span><\/td>\n<\/tr>\n
Historic 1-Yr. Price Return\u00a0<\/span><\/td>\n51.9%<\/span><\/td>\n62.8%<\/b><\/td>\n-4.5%<\/span><\/td>\n10.3%<\/span><\/td>\n18.4%<\/span><\/td>\n15.6%<\/span><\/td>\n10.7%<\/span><\/td>\n-3.7%<\/span><\/td>\n7.8%<\/span><\/td>\n<\/tr>\n
Historic 3-Yr Ann. Price Return<\/span><\/td>\n-11.5%<\/span><\/td>\n32.0%<\/b><\/td>\nN\/A<\/span><\/td>\n13.5%<\/span><\/td>\n14.0%<\/span><\/td>\n12.5%<\/span><\/td>\nN\/A<\/span><\/td>\n15.0%<\/span><\/td>\n15.5%%<\/span><\/td>\n<\/tr>\n
Historic 5-Yr Ann. Price Return<\/span><\/td>\n-19.7%<\/span><\/td>\n19.2%<\/b><\/td>\nN\/A<\/span><\/td>\n5.4%<\/span><\/td>\n8.2%<\/span><\/td>\n5.2%<\/span><\/td>\nN\/A<\/span><\/td>\n11.0%<\/span><\/td>\n13.0%<\/span><\/td>\n<\/tr>\n
Volatility<\/span><\/td>\n60.2%<\/span><\/i><\/td>\n33.4%<\/span><\/i><\/td>\n19.5%<\/span><\/td>\n15.2%<\/span><\/td>\n19.5%<\/span><\/td>\n17.2%<\/span><\/td>\n11.3%<\/b><\/td>\n18.3%<\/span><\/td>\n15.9%<\/span><\/td>\n<\/tr>\n
Sharpe Ratio (3-Year)<\/span><\/td>\n-0.33<\/span><\/i><\/td>\n0.42<\/span><\/td>\n0.64<\/span><\/td>\n0.35<\/span><\/td>\n0.42<\/span><\/td>\n0.30%<\/span><\/td>\n0.93<\/b><\/td>\n0.61<\/span><\/td>\n0.82<\/span><\/td>\n<\/tr>\n
Beta<\/span><\/td>\n2.59<\/span><\/i><\/td>\n1.49<\/span><\/td>\n0.61<\/span><\/td>\n0.67<\/span><\/td>\n0.99<\/span><\/td>\n0.94<\/span><\/td>\n0.44<\/b><\/td>\n1.11<\/span><\/td>\n1.00<\/span><\/td>\n<\/tr>\n
# of Stocks<\/span><\/td>\n31<\/span><\/td>\n33<\/span><\/td>\n22<\/span><\/td>\n60<\/span><\/td>\n60<\/span><\/td>\n99<\/span><\/td>\n31<\/span><\/td>\n500<\/span><\/td>\n500<\/span><\/td>\n<\/tr>\n
Undervalued by VE %*<\/b><\/td>\n49%<\/b><\/td>\n36<\/span>%<\/b><\/td>\n14%<\/span><\/td>\n14%<\/span><\/td>\n35%<\/span><\/td>\n49%<\/b><\/td>\n30%<\/span><\/td>\n33%<\/span><\/td>\n33%<\/span><\/td>\n<\/tr>\n
P\/B Ratio<\/span><\/td>\n1.3\u00a0<\/span><\/td>\n2.3\u00a0<\/span><\/td>\n2.7\u00a0<\/span><\/td>\n2.5<\/span><\/td>\n1.1<\/b><\/td>\n2.6<\/span><\/td>\n2.4\u00a0<\/span><\/td>\n3.1<\/span><\/td>\n4.3<\/span><\/i><\/td>\n<\/tr>\n
P\/E Ratio<\/span><\/td>\n-7.5\u00a0<\/span><\/i><\/td>\n12.6\u00a0<\/span><\/td>\n21.5\u00a0<\/span><\/td>\n17.3<\/span><\/td>\n9.5<\/b><\/td>\n14.8<\/span><\/td>\n15.9%<\/span><\/td>\n20.8<\/span><\/td>\n21.7<\/span><\/td>\n<\/tr>\n
Div. Yield<\/span><\/td>\n0.3%<\/span><\/i><\/td>\n0.4%<\/span><\/td>\n1.7%<\/span><\/td>\n1.5%<\/span><\/td>\n1.8%<\/span><\/td>\n4.4%<\/b><\/td>\n4.1%<\/span><\/td>\n1.4%<\/span><\/td>\n1.3%<\/span><\/td>\n<\/tr>\n
Expense Ratio<\/span><\/td>\n0.35%<\/span><\/td>\n0.35%<\/span><\/td>\n0.60%<\/span><\/td>\n0.60%<\/span><\/td>\n0.42%<\/span><\/td>\n0.45%<\/span><\/td>\n0.65%<\/span><\/td>\n0.20%<\/span><\/td>\n0.09%<\/b><\/td>\n<\/tr>\n
Largest Holding Pct.<\/span><\/td>\nNextier <\/span>(NEX)<\/b>,<\/span><\/p>\n

5.3%, <\/span>VE2<\/b><\/td>\n

Peabody <\/span>(BTU)<\/b><\/p>\n

5.3%,\u00a0<\/span><\/p>\n

VE3<\/b><\/td>\n

Northrop Grum <\/span>(NOC)<\/b><\/p>\n

9.1% <\/span>VE3<\/b><\/td>\n

Archer Daniels <\/span>(ADM) <\/b>9.1%<\/span><\/p>\n

VE2<\/b><\/td>\n

Chubb <\/span>(CB)<\/b><\/p>\n

11.9%<\/span><\/p>\n

VE3<\/b><\/td>\n

Abbvie <\/span>(ABBV) <\/b>8.3% <\/span>\u00a0VE3<\/b><\/td>\nUnited Health <\/span>(UNH)\u00a0\u00a0<\/b><\/p>\n

4.7%<\/span><\/p>\n

VE3<\/b><\/td>\n

Nielsen (NLSN) 0.3% <\/span>VE=2<\/b><\/td>\nApple <\/span>(AAPL)<\/b><\/p>\n

7.1%<\/b><\/p>\n

VE3<\/b><\/td>\n<\/tr>\n

Index Provider<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\nCustom<\/span><\/td>\nNasdaq<\/span><\/td>\nDow Jones Select<\/span><\/td>\nMorningstar<\/span><\/td>\nNone – Active<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\nS&P Dow Jones<\/span><\/td>\n<\/tr>\n
Index<\/span><\/p>\n

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

Equal Weighting<\/span><\/td>\nEqual Weighting<\/span><\/td>\nAlgorithmic<\/span><\/td>\nAlgorithmic<\/span><\/td>\nMarket Cap<\/span><\/td>\nAlgorithmic<\/span><\/td>\nN\/A – Active<\/span><\/td>\nEqual Weighting<\/span><\/td>\nMkt. Cap Weighting\u00a0<\/span><\/td>\n<\/tr>\n
ETF Sponsor<\/span><\/td>\nSPDRs by SSgA<\/span><\/td>\nSPDRs by SSgA<\/span><\/td>\nEmles<\/span><\/td>\nFirst Trust<\/span><\/td>\niShares by Black Rock<\/span><\/td>\nFirst Trust<\/span><\/td>\nTrue Shares<\/span><\/td>\nInvesco<\/span><\/td>\nSPDRs by SSgA<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Current ValuEngine reports on these ETF\u2019s can be viewed <\/b>HERE<\/b><\/a><\/h5>\n

Salient observations:<\/span><\/p>\n