First in a series of occasional posts where I will highlight a few ETFs that caught my attention this week due to being previously unknown to me and/or making big moves.
First on this week’s list is the ProShares Decline of the Retail Store ETF (EMTY). This ETF is based on an index that tracks brick and mortar stores. Using swaps, they implement a short strategy whereby the ETF goes up as the underlying stocks go down. With so many parts of the country in lockdown, brick and mortar stores without a significant online presence are being crushed. As a result, EMTY is one of the best performers on our ETF Scorecard. Here is the chart:
You can see that this ETF has really been on fire since the late-February market decline began. My suspicion, however, is that it even after the pandemic abates and normalcy begins to return to the economy, this ETF will continue to be a reasonably strong performer. The movement of consumers to online will continue to wreak havoc in the retail space for years to come.
Another ETF of note is the Invesco 1-30 Laddered Treasury ETF (PLW). We have the following description:
The Invesco 1-30 Laddered Treasury ETF (Fund) is based on the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index (Index). The Fund will normally invest at least 80% of its total assets in US Treasury securities that comprise the Index. The Index measures the potential returns of the U.S. Treasury yield curve based on approximately 30 equally weighted U.S. Treasury issues with fixed coupons, scheduled to mature in a proportional, annual sequential (“laddered”) structure. The Fund does not participate in Treasury Bills, Treasury Inflation Protected Securities (TIPS), or zero-coupon securities (STRIPS). The Fund and the Index are rebalanced and reconstituted annually in February.from Invesco website
Here is the chart:
You can see that PLW showed some volatility in mid-March and then steadily marched upward.
PLW has an effective duration of 12.35 years. It offers a 12-month distribution rate of 1.64% which puts it the same ballpark with some of the other well known bond funds like the iShares 20+ Year Treasury Bond ETF (TLT) .
Disclosure: we hold no positions in either of these ETFs