US ETP inflows continue, averaging
+$4.5bn per week YTD

Data in this report is as of Fri, Mar 15

Market and Net Cash Flows Review

Markets were mixed during last week. The US (S&P 500) edged higher by 0.61%; while, outside the US, the MSCI EAFE (in USD) rose by 1.86% and the MSCI EM (USD) dropped by 2.2%. Moving on to other asset classes, the 10Y US Treasury Yield dropped by 5 bps last week; while the DB Liquid Commodity Index was up by 0.76%. In the meantime, the Agriculture sector (DB Diversified Agriculture Index) and Silver prices pulled back by 0.10% and 0.76%, respectively; while the WTI Crude Oil and Gold prices rose by 1.63% and 0.83%, respectively. Last but not least, Volatility (VIX) dropped by 10.25% during the same period.

The total US ETP flows from all products registered $5.19bn (+0.4% of AUM) of inflows during last week vs. $6.04bn (+0.4%) of inflows the previous week, setting the YTD weekly flows average at +$4.5bn (+$49.5bn YTD in total cash flows).

This posting features a comprehensive review of the established dividend ETF sector. In this view we feature those dividend related ETFs that have a more conservative list of constituents and have been in existence for more than a few years. There are dozens within the category with more on the way. To simplify matters for investors we’ve whittled choices down to 10. The issues chosen represent a broad cross section of domestic, global, overseas, real estate (REITs) and other sectors from a variety of sponsors. Doing so makes sorting through the sector more manageable for most investors.

Within each category we filter them by placing importance on high assets under management, liquidity and/or strategies that make a difference being the most critical criteria. Newer issues tied to indexes with long (over 5 years) of historical data may be worth investigating, featuring and using indexes as alternative evaluations if the linked ETF has a short trading history.

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving..

Economic data was light this week as was volume. This morning's mortgage number was down, but that came off the prior explosive move up in the number. Retail sales was a bigger beat than expected. We don't know how much of this is inflation-related. Last week's tick down in the unemployment number was a shot in the arm, but also caused some fear as this may trigger the Fed to pull back the punchbowl.

We have another political-budget boondoggle ahead at the end of this month but the bulls are giving it a "ho-hum" as all the previous ones have had a miracle save in the 11th hour.

Commodities have become "collateral damage" in the Currency War. Historical correlations -especially to the value of the Dollar - have become skewed as other major world currencies, such as the Euro, Yen and British Pound have been massively devalued by their central banks.

For the purpose of this article, we'll focus on the United States Oil Fund (USO). USO tracks the futures price of West Texas Intermediate Oil (WTI). This is the most critical oil tracking to the US economy because it is the basis of gasoline prices. Historical data shows that when the national average of gas prices hits $3.80/gal, it slows the economy and drags the stock market down. At $4.00/gal, the people start screaming and want to throw the politicians out of office. It would only stand to reason that it is in the best interest of the politicians to manipulate the price of US oil (up or down depending on the campaign).

Lets first look at our historical correlation of the Dollar (.DXY) and WTI (USO).

Disclosure:  The ETF Digest is long THD.