Tactical ETF Review: 5.23.2011

The economy may be facing new headwinds, but the depth of the threat is still an open debate for those who worship at the altar of momentum and technical analysis. Representative ETFs for the major asset classes are no longer making new highs, but the selling so far has been modest. That’s no assurance that all’s well, of course, although the fact that prices have held up relatively well in the face of fresh macro worries is impressive. In fact, the latest round of anxiety has inspired the U.S. bond market to rally sharply, albeit for all the wrong reasons. Indeed, caution is in the air elsewhere. The week ahead may be a potent test for the crowd’s resiliency as updates later in the week arrive for durable goods orders, initial jobless claims, and personal income and spending. Meantime, here’s a closer look at how the major asset classes stack up via proxy ETFs as of Friday’s close:

US STOCKS • Vanguard Total Market (VTI) • Benchmark: MSCI US Broad Market Index
Steady as she goes. U.S. equities are holding just above a support line…

FOREIGN DEVELOPED MARKET STOCKS • Vanguard Europe Pacific (VEA) • Benchmark: MSCI EAFE
Stocks in foreign developed markets are also taking a wait-and-see approach…

EMERGING MARKET STOCKS • Vanguard Emerging Markets (VWO) • Benchmark: MSCI Emerging Market
The sellers are more aggressive in emerging market stocks…

US BONDS • Vanguard Total Bond Market (BND) • Benchmark: Barclays US Aggregate
U.S. bonds have revived sharply over the past month on new concerns about the economy…

INFLATION-INDEXED US TREASURIES • iShares Barclays TIPS Bond (TIP) • Benchmark: Barclays US TIPS
The rally in inflation-indexed Treasuries, however, seems to have run out of gas…

HIGH YIELD BONDS • SPDR Barclays High Yield Bond (JNK) • Benchmark: Barclays High Yield Very Liquid
Technical strength in junk bonds continues to roll on…

COMMODITIES • iPath Dow Jones-UBS Commodity (DJP) • Benchmark: DJ-UBS Commodity
Commodities have taken a hit amid worries of a new rough patch for the economy…

REAL ESTATE INVESTMENT TRUSTS • Vanguard REIT (VNQ) • Benchmark: MSCI US REIT
The roaring bull market for REITs is taking a breather, but just barely…

FOREIGN DEVLOPED MARKET GOVERNMENT BONDS • SPDR Barclays Int’l Treasury (BWX) •
Benchmark: Barclays Global Treasury ex-US Capped

In contrast with US bonds, foreign bonds are on the defensive, due in no small part to the revival in the dollar’s fortunes in forex markets in recent weeks…

EMERGING MARKET GOVERNMENT BONDS • Van Eck Market Vectors Emg Mkt Local Currency Bond (EMLC) •
Benchmark: J.P. Morgan GBI-EMG Core

Buyers of emerging market bonds, on the other hand, aren’t so quick to give in to the bears…

FOREIGN GOVERNMENT INFLATION-LINKED BONDS • SPDR DB International Inflation-Protected Bond (WIP) •
Benchmark: DB Global Government ex-US Inflation-Linked Bond Capped

Foreign inflation-indexed bonds, have fought the sellers to a standoff in recent days…

FOREIGN CORPORATE BONDS • PowerShares International Corporate Bond (PICB) •
Benchmark: S&P International Corporate Bond

And the market in foreign corporate bonds is, for the moment, sitting on a fence between the bulls and bears…

Charts courtesy of StockCharts.com

About James Picerno 894 Articles

James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers.

Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg, Dow Jones, Reuters.

Visit: The Capital Spectator

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