{"id":2181,"date":"2022-09-26T12:15:50","date_gmt":"2022-09-26T16:15:50","guid":{"rendered":"https:\/\/www.etfrc.com\/articles\/?p=2181"},"modified":"2022-09-26T12:15:51","modified_gmt":"2022-09-26T16:15:51","slug":"benchmark-sector-etfs-week-in-review-4","status":"publish","type":"post","link":"https:\/\/www.etfrc.com\/articles\/index.php\/2022\/09\/26\/benchmark-sector-etfs-week-in-review-4\/","title":{"rendered":"Benchmark & Sector ETFs: Week in Review"},"content":{"rendered":"\n
<\/div>\n\n\n\n

Week Ending September 23, 2022<\/h4>\n\n\n\n

Last week was another rough one for equities across the board. Large caps in the S&P 500 SPDR (SPY<\/a>) sank 4.6% while mid- and small-caps fell even more. Foreign shares tanked as well, with losses exacerbated in part by strength in the U.S. dollar.<\/p>\n\n\n\n

For this week’s valuation update we posted each ETF’s forward price-to-book value (P\/BV) multiple. Unlike with many other valuation multiples such as P\/Es, all major equity benchmarks are trading at a discount<\/em> to their 10 year averages. Emerging Markets in particular trade at a large, 44% discount to their historical average, and in fact at just 1.3x, their lowest level since at least 2004 (chart below).<\/p>\n\n\n\n

<\/div>\n\n\n\n

TABLE 1: Major Benchmarks: Weekly Total Returns and Valuation Update<\/strong>
Week ending September 23, 2022<\/em> <\/p>\n\n\n\n

Ticker<\/strong><\/td>Fund<\/strong><\/td>Return<\/strong><\/td>Fwd. P\/BV<\/strong><\/td>10 yr. Avg<\/strong><\/td>Prem\/Disc.<\/strong><\/td><\/tr>
SPY<\/a><\/td>SPDR S&P 500 ETF Trust<\/td>-4.6%<\/td>2.8<\/td>3.1<\/td>-9.7%<\/td><\/tr>
QQQ<\/a><\/td>Invesco QQQ Trust<\/td>-4.6%<\/td>4.2<\/td>4.8<\/td>-12.5%<\/td><\/tr>
MDY<\/a><\/td>SPDR S&P Midcap 400 ETF Trust<\/td>-5.9%<\/td>1.6<\/td>2.0<\/td>-20.0%<\/td><\/tr>
IWM<\/a><\/td>iShares Russell 2000 ETF<\/td>-6.5%<\/td>1.7<\/td>1.9<\/td>-10.5%<\/td><\/tr>
EFA<\/a><\/td>iShares MSCI EAFE ETF<\/td>-6.0%<\/td>1.4<\/td>2.0<\/td>-30.0%<\/td><\/tr>
EEM<\/a><\/td>iShares MSCI Emerging Markets ETF<\/td>-4.8%<\/td>1.3<\/td>2.3<\/td>-43.5%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Source: FactSet Research Systems and ETF Research Center. <\/em> <\/p>\n\n\n\n

<\/div>\n\n\n\n

CHART 1: iShares Emerging Markets ETF (EEM<\/a>) Historical P\/BV Multiple<\/strong><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Source: ETF Research Center<\/em><\/p>\n\n\n\n

<\/div>\n\n\n\n

All 11 sectors fell last week. Energy saw the biggest decline of 9.1%, while Consumer Staples held up best, losing just 2.1%. Like the broad benchmarks above, most sectors trade at a discount to their 10 year average P\/BV ratios. The exception is Utilities, which garner a 10% premium.<\/p>\n\n\n\n

<\/div>\n\n\n\n

TABLE 2: Major Sectors: Weekly Total Returns and Valuation Update<\/strong>
Week ending September 23, 2022<\/em> <\/p>\n\n\n\n

Ticker<\/strong><\/td>Fund<\/strong><\/td>Return<\/strong><\/td>Fwd. P\/BV<\/strong><\/td>10 yr. Avg<\/strong><\/td>Prem\/Disc.<\/strong><\/td><\/tr>
XLC<\/a><\/td>Communication Services Select Sector SPDR*<\/td>-5.6%<\/td>1.8<\/td>2.8<\/td>-35.7%<\/td><\/tr>
XLY<\/a><\/td>Consumer Discretionary Select Sector SPDR<\/td>-7.1%<\/td>5.4<\/td>6.7<\/td>-19.4%<\/td><\/tr>
XLP<\/a><\/td>Consumer Staples Select Sector SPDR<\/td>-2.1%<\/td>4.6<\/td>4.9<\/td>-6.1%<\/td><\/tr>
XLE<\/a><\/td>Energy Select Sector SPDR<\/td>-9.1%<\/td>1.7<\/td>2.0<\/td>-15.0%<\/td><\/tr>
XLF<\/a><\/td>Financial Select Sector SPDR<\/td>-5.6%<\/td>1.1<\/td>1.3<\/td>-15.4%<\/td><\/tr>
XLV<\/a><\/td>Health Care Select Sector SPDR<\/td>-3.3%<\/td>3.3<\/td>4.1<\/td>-19.5%<\/td><\/tr>
XLI<\/a><\/td>Industrial Select Sector SPDR<\/td>-4.5%<\/td>3.4<\/td>3.9<\/td>-12.8%<\/td><\/tr>
XLB<\/a><\/td>Materials Select Sector SPDR<\/td>-5.6%<\/td>2.0<\/td>2.7<\/td>-25.9%<\/td><\/tr>
XLRE<\/a><\/td>The Real Estate Select Sector SPDR*<\/td>-6.3%<\/td>2.8<\/td>3.6<\/td>-22.2%<\/td><\/tr>
XLK<\/a><\/td>Technology Select Sector SPDR<\/td>-3.6%<\/td>4.9<\/td>5.3<\/td>-7.5%<\/td><\/tr>
XLU<\/a><\/td>Utilities Select Sector SPDR<\/td>-3.0%<\/td>2.2<\/td>2.0<\/td>10.0%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Source: FactSet Research Systems and ETF Research Center. <\/em> *Note: Fewer than 10 years of valuation history available.<\/em> <\/p>\n","protected":false},"excerpt":{"rendered":"

Performance review and valuation update for the week ending September 23, 2022.<\/p>\n","protected":false},"author":2,"featured_media":2131,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[222,6],"tags":[22,49,202,259,137,4],"class_list":["post-2181","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamentals","category-sector-etfs","tag-eem","tag-efa","tag-iwm","tag-mdy","tag-qqq","tag-spy","description-off"],"_links":{"self":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts\/2181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/comments?post=2181"}],"version-history":[{"count":9,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts\/2181\/revisions"}],"predecessor-version":[{"id":2192,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts\/2181\/revisions\/2192"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/media\/2131"}],"wp:attachment":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/media?parent=2181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/categories?post=2181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/tags?post=2181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}