NEW YORK (ETF Expert) --How long did investors fret the possible combination of employment weakness and the U.S. Federal Reserve staying the course of incremental tapering? One day. On Tuesday , dip buyers gobbled up riskier assets and short-sellers covered their backsides as soon as a better-than expected retail sales report alleviated concerns.
A perusal of month-over-month data revealed remarkable performance gains for a variety of high-beta exchange-traded funds:
|High Risk ETFs Remain Very Hot|
|5-Day %||1 Month %|
|SPDR Biotech (XBI)||13.5%||21.3%|
|iShares MSCI Spain (EWP)||3.1%||13.2%|
|Guggenheim Global Solar (TAN)||2.7%||22.3%|
|iShares MSCI Europe Financials (EUFN)||2.4%||11.1%|
|iShares Russell Microcap (IWC)||1.5%||8.3%|
|S&P 500 SPDR Trust (SPY)||0.0%||3.5%|
However, the idea that investors see "risk on" opportunity around every corner may be overstated. Here are three ETF trends that might shock the simplistic notion that stocks are the only asset in demand.
1. A Turnaround for Longer Maturity Bonds? The advice that many financial professionals have been giving has been to avoid the long end of the bond curve and embrace shorter maturity bonds for the fixed income portion of an allocation. Admittedly, that's the approach I have taken with my clients for the better part of a year. By the same token, I am watching to see when -- and under what circumstances -- a "flight to quality" trade returns.