Pages Menu

Posted by on Jan 7, 2014 in AdvisorShares, Market Insight

AdvisorShares Weekly Market Review – Week Ending 1/3/2014

AdvisorShares Weekly Market Review – Week Ending 1/3/2014

Highlights of the Prior Week

Back At It

In this new year, the magnitude of 2013 comes full circle. The S&P 500 and the Dow finished the year with 29.6% and 26.5% gains, respectively. For the Dow, that was the biggest annual gain since 1995, and the fifth consecutive positive year. Most impressive in the developed markets was Japan’s Nikkei Stock Average, which surged 57%.

Although S&P 500-based SPY had the most net new assets this past week, its $640 million growth pales in comparison to the largest equity ETF growths typically seen. This aligns with the stagnancy equity markets experienced in last week’s holiday-shortened, four-day week. In fact, investors saw the first negative day to start a new year since 2008, as the S&P 500 returned -0.5%, Dow returned -0.1%, and the Russell 200 returned -0.6%. The two biggest losers in the ETF realm were iShares Core S&P 500 (IVV) and iShares Russell 2000 (IWM), losing $2.03 billion and $730 million, respectively.

Treasury yields were fairly flat for the week, as the market acclimates itself back to non-Holiday weeks – the 10-year note remains around 3.00%. The iShares 20-Year Treasury Bond ETF (TLT) gained about $300 million in assets on the week. Similarly, the iShares Short Treasury Bond ETF (SHV) lost about $220 million. That was about all that was seen among significant creations/redemptions of U.S. Treasury securities.

Investment grade primary issuance was virtually unseen this past week, as many market participants were on vacation. Nonetheless, iShares iBoxx Investment Grade Corporate Bond ETF (LQD) took in just under $400 million in new assets.

There has been positive economic data to begin the new year – an upward revision to Q3 GDP refigured output growth at 4.1% quarter-over-quarter on an annualized basis. Housing prices again also registered double-digit increases.

1.7.2014 pic

Weekly ETF Flows

For December 30, 2013 to January 3, 2014

1.7.2014 pic 2

S&P Sector Analysis

As for the sectors of the S&P 500, only three outperformed the broad benchmark – Financials, Discretionary, and Healthcare. The others– Industrials, Materials, Technology, Staples, Telecom, Utilities, and Energy – all underperformed.  The dispersion between the top-performing and bottom-performing sectors fell to 1.88% this week, with Financials outperforming all, and Energy coming in last.

For December 30, 2013 to January 3, 2014

Sector performances, as measured by the S&P 500 sector indices were:

1.7.2014 pic 3