The Dow Jones Industrial Average is on track for its worst weekly percentage drop since the crisis. The index lost over 1,000 points on Feb 8, marking the second-worst point decline in history. The 10-year Treasury yield is hovering around the four-year high and was closed at 2.85% on Feb 8. Concerns over trillion-dollar budget deficits, rising rates and inflationary pressures caused this massacre.
Top three ETFs like SPDR S&P 500 ETF (SPY – Free Report) , SPDR Dow Jones Industrial Average ETF (DIA – Free Report) and PowerShares QQQ ETF (QQQ – Free Report) retreated about 3.7%, 4.1% and 4.2% on Feb 8.
Like always, alternative asset classes resisted the sell-offs with the likes of PowerShares Multi-Strategy Alternative ETF (LALT – Free Report) (up 1.30%) and AGFiQ US Market Neutral Anti-Beta (BTAL – Free Report) (up 0.75%) in the green.
Not only this, uncorrected-to-market ETFs, plain and simple consumer-focused ETFs too battled the slaughter. In fact, one ETF has extensive exposure to the health care sector as well in the sense that it focuses on obesity-related diseases like diabetes, high blood pressure, cholesterol, heart disease, stroke & sleep apnea & companies focused on weight loss programs, weight loss supplements, or plus-size apparel.
We believe as risk-off sentiments flared-up in the market, investors sought safety in sectors like consumer staples and health care. Their non-cyclical nature offered a guard to investors’ portfolio.
Below we highlight those winners:
The underlying index of the fund comprises common stocks of U.S. consumer staples companies that are principally engaged in the businesses of providing consumer goods & services that have non-cyclical characteristics, including tobacco, textiles, food and beverage & non-discretionary retail and this Index is a subset of the S&P SmallCap 600 Index.
Food products (55.85%), Food & Staples Retailing (13.12%) and Household Products (13.05%) are the three segments of the fund, which charges 29 bps in fees. The fund gained about 0.8% on Feb 8.
The underlying index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry. The product charges 60 bps in fees. Food products account for about 64.7% of the fund followed by 25.4% in soft drinks and 6% in distillers and vintners. The fund advanced about 0.7% on Feb 8.
The underlying index – the Solactive Obesity Index – tracks the performance of companies globally positioned to profit from servicing the obese, including biotechnology, pharmaceutical, health care & medical device companies focusing on obesity-related diseases (read: Strong Holiday Retail Sales: 3 ETF & Stock Picks).
Health Care (81.7%), Consumer Discretionary (9.81%) and Consumer Staples (8.6%) are the top three sectors of the fund. It was up 1.2% on Feb 8.
The PowerShares S&P SmllCp Csmr Stpls Pfo (PSCC) closed at $70.20 on Friday, up $0.60 (+0.86%). Year-to-date, PSCC has declined -6.14%, versus a -2.01% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Zacks Research.