No Surprise Here: Global Stocks Pressuring Sector ETFs, S&P Says

In research published today, Standard & Poor's Capital IQ noted that slack performances in international equity markets have been a pain for U.S. sector ETFs this year. Telling is the fact through Monday, only 128 U.S.-listed ETFs and ETNs were positive year-to-date and that's out of a universe of roughly 1,400 exchange-traded products. More bad news: S&P notes for “the equity ETFs or ETNs that were available for the full period, we found 454 with a negative total return, of which 247 were down more than 10%.” The research firm noted there were 113 domestic ETFs/ETNs with a positive total return while only five international founds had positive returns above 0% and almost 250 had negative returns. Among the sector funds positive on a year-to-date basis are the Consumer Staples Select Sector SPDR XLP, the Utilities Select Sector SPDR XLU, the Vanguard Consumer Staples ETF VDC, the PowerShares Dynamic Pharmaceuticals PJP and the iShares Dow Jones US Pharmaceuticals ETF IHE. The iShares Dow Jones US Pharmaceuticals ETF is the leader of that pack, up almost 15% year-to-date while the PowerShares equivalent is next line. S&P Capital IQ rates all five funds overweight. The firm has marketweight ratings on rival ETFs such as the Vanguard Utilities Index Fund; ETF Shares VPU; the iShares Dow Jones US Utilities Sector Index Fund IDU, the First Trust Consumer Staples AlphaDex Fund FXG; and SPDR S&P Retail ETF XRT. Regarding ETFs that are down more than 50% year-to-date, S&P has a marketweight rating on the Market Vectors India Small-Cap ETF SCIF and underweight ratings on the Guggenheim Solar ETF TAN and its rival, the Market Vectors Solar Energy ETF KWT. Sixteen of the ETFs receiving an Overall Ranking of Overweight had a 12-month yield of more than 3%, while 14 of them had a yield of less than 1%. Thirty-six of the Overweight-ranked ETFs also had an Overall ranking of Overweight in each of S&P three primary analytical categoriesPerformance Analytics, Risk Considerations and Cost Factors, according to the S&P note.