August Asset Class Performance

August wasn't a very good month for risky asset classes.  Of the 58 key ETFs highlighted below, fixed income, gold, silver, the yen, utilities, and Hong Kong were the only ones in the green during the month.  The S&P 500 tracking SPY ETF declined 4.50% in August, the Midcap 400 ETF (IJH) declined 4.89%, and the Smallcap 600 ETF (IJR) declined 7.60%.  Financials and Industrials were the worst performing sectors in August, while Utilities, Telecom, Health Care, and Consumer Staples held up the best. 

Italy (EWI) was the worst performing country ETF in August with a decline of 8.89%, and France (EWQ) and Germany (EWG) weren't far behind.  The major emerging market ETF -- EEM -- actually outperformed most developed countries with an August decline of 3.24%.  Oil (USO) got hit hard during the month with a decline of more than 9%, while the natural gas ETF (UNG) did much worse at -22.78%.  Gold (GLD) was up 5.71% in August and Silver (SLV) was up 7.68%.  Of the major Treasury ETFs, TLT (20-years+) was up a whopping 8.04%.

Comments

[theyenguy]

Thanks for the summary inforrmation. I personally do not invest in ETFs, I am invested in gold bullion as I am concerned about a liquidity crisis and believe that gold will be in demand in such a restrictive economic environment. I do maintain a chart site to which I've provided a link where I suggest short selling opportunities as well as opportunities for investing long.

Google Finance chart shows August 2010, monthly ETF losers were Small Cap Pure Value, RZV, 11% Semiconductors, SMH, 11%, Small Cap Consumer Discretionary, XLYS, 11%, Ireland, EIRL, 10%, Sweden, EWD, 7%, Spain, EWP, 7%.

Google Finance chart shows August 2010, monthly 200% inverse ETF gainers were Semiconductors, SSG, 25%, Small Cap Pure Value, SJH, 15%, Mexico SMK, 11% and Europe EPV, 8%.

Google Finance chart shows August monthly 200% ETF gainers were DGP, 11%, and Silver, AGQ, 14%.

Today, the last day of August, the safe-haven investments Gold, Silver, Bonds, and Thailand soared as currency traders massively sold a number of yen carry trades.

Stocks, ACWI, resisted falling from a ledge of support, but tomorrow, September 1, 2010, they could easily fall lower.

Oil, USO, being in abundant supply, fell 3.3% on the lower on the major currencies yen carry trade, DBV:FXY. The more resilient emerging market currencies, CEW:FXY, supported a 2.0% rise in Thailand, THD. Energy service companies, OIH, fell lower with the falling price of oil. The 200% of gold, DGP, rose 1.9%

The rise in emerging market currencies, CEW, relative to developed market currencies, DBV, CEW:DBV, accounts for your report that "the major emerging market ETF, EEM, actually outperformed most developed countries with an August decline of 3.24%."

The currency traders took the Swiss Franc, FXF, above a recent high, and the yen, FXY, back near its recent high. And they took a number of currencies lower, including the Mexico Peso, FXM, the British Pound Sterling, FXB, the Candian Dollar, FXC.

Mexico, EWW, withstood the assault on its currency, and rose 0.7%. Mexico shares are very damaged; and have a wave structure much like the Russell 2000, IWM, which fell 0.2%, which justifies being 200 short with SJH. The chart of the Mexico Peso, FXM, reads terrifically bearish, and may manifest as three black crows tomorrow, September 1, 2010, justifying an investment in the 200% inverse of Mexico, SMK. The 200% inverse of the Russell 2000 Value Shares, SJH, is ready and waiting to reward investors when the fall comes.

The UK, EWU, rose 0.4% to its 20 day moving average.

Canada, EWC, fell 0.4% to its 20 day moving average.

The Euro, was stable, rising 0.03%, enabling European shares, FEZ, to rise 0.4%. European Financials, EUFN rose 0.8%, Spain, EWP, 1.2%, and Ireland, EIRL, 2.4%, in spite of a lower, EUR/JPY as seen in the chart of FXE:FXY. When the stocks do fall those invested 200% short the European shares with EPV will gain quite well.

European Financials, EUFN, rose 0.8%

Yes, Ireland, EIRL, rose 2.4% even though Bloomberg reports that Irish Government, Banks Debt Risk Rises, Default Swaps Show. The cost of insuring against default on Irish government and bank debt rose, according to data provider CMA.

Australia, EWA, rose 0.2% even though the AUD/JPY fell sharply lower as is seen in the chart of FXA:FXY. BHP Billiton, BHP, traded unchanged.

The Swiss Franc Australian Dollar carry trade went into the stratosphere rising 1.0%, as seen in the chart of FXF:FXA; and the Swiss Franc Euro Dollar carry trade did so as well rising 1.0% as seen in the chart of FXF:FXE.

The US Dollar, $USD, closed unchanged at its 20 day moving average.

While world stocks, VT, resisted the strong sell off of currencies, with a 0.1% gain, base metals, DBB, fell 1.0% lower on the lower carry trades falling, taking the copper miners, COPX, 0.9% lower. Tin, JJT, fell 4.0%.

Sweden, EWD, (whose currency Swiss Franc, FXS, was not reported today), rose 1.0%. The fact EWD is heavily weighted with telecom manufacturer, Ericsson Telephone, Financial Institution, Nordea Bank, and vehicle manufacturer, Volvo Corporation, does not auger well for the future of EWD.

Semiconductors, SMH, could not hold on; it fell 1.5%; with Intel, INTC, falling 1.6%. The 300% inverse of semiconductors, SOXS, rose 5.6%. The 200% inverse of semiconductors, SSG, rose 3.6%

One could call today “a rush to a perceived safe haven of lower interest rates”, as the interest rate on the 20 to 30 Year US Government Bonds, $TYX, fell; and the rate on the US Ten Year Note, TNX, fell, as well.

Given that the market failed to break today, and given the rush into US Treasuries, we are a historic point of systemic risk.

The chart of 30-10 Yield Curve, $TYX:$TNX, steepened somewhat, showing tht investors embraced the risk of bond default, as a better choice than the risk of being invested in stocks, being that investors rushed into the 20 to 30 Year US Government Bonds, TLT, and even the extremely volatile Zeroes, ZROZ.

I expect the beginniong of September 2010, to be volatile; an investor may want to consider investing in gold or silver bullion or short selling.

[HMS]

http://bespokeinvest.typepad.com/bespoke/2009/03/average-sp-500-hourly-performance.html

Can you please update this very interesting study?

S&P hourly performance chart