As markets began to digest earnings Tuesday, three different WisdomTree ETFs signaled a buy throughout the course of the day across different sectors. With strategies in foreign equities and fixed income popular, the trio may be benefitting from notable momentum away from expensive U.S. equities and towards areas betters suited for a recessionary environment.
WisdomTree Yield Enhanced US Aggregate Bond ETF (AGGY)
While markets are anticipating a rate cut this year, that hasn’t stopped the powerful fixed income momentum that has been a major story this year for investors. One ETF that saw its price rise above both its 200-day Simple Moving Average (SMA) and its 50-day SMA has been the WisdomTree Yield Enhanced U.S. Aggregate Bond ETF (AGGY), which tracks the Bloomberg U.S. Aggregate Yield Enhanced index for a 12 basis point fee.
AGGY’s index invests in twenty investment-grade, yield focused subcomponents with a sector rotation approach. AGGY has returned 3% YTD, outperforming strategies like the iShares Government/Credit Bond ETF (GBF) in that time.
WisdomTree China ex-State-Owned Enterprise ETF (CXSE)
The WisdomTree China ex-State Owned Enterprise ETF jumped up in price early Tuesday in part due to very good GDP growth news from China, hitting $35.48 around 11 a.m. That took it above both its 200-day SMA and its 50-day SMA for that time, and though it’s come back down, China’s positive news could see CXSE continue to float close to that technical indicator point.
CXSE has outperformed some notable China-focused rivals like the KraneShares CSI China Internet ETF (KEWB) YTD according to YCharts, charging 32 basis points to track the WisdomTree China ex-State-Owned Enterprises Index.
WisdomTree India Earnings ETF (EPI)
A second foreign equities ETF, the WisdomTree India Earnings ETF may also have seen a big boost in the morning from the China news, given India’s notable export relationship with China and the role commodities play for India’s economy. EPI say at $32.10 by midday, floating at or above its 200-day SMA and well above its $31.7 50-day SMA, as well.
Charging 84 basis points, EPI tracks the WisdomTree India Earnings Index and invests in India firms weighted by earnings rather than market cap. EPI has also added $18.5 million over the last month in net inflows, and presents an intriguing view on the large Indian market.
See more: “As Recession Risk Grows, Eye Dividend-Focused ETFs”
Whether the trio of WisdomTree ETFs will continue to stay at or near their tech indicators is something to watch, but to start the week, their momentum has been worth noting. Investing in popular areas like foreign equities and fixed income offerings, the trio could be ETFs to follow entering into a recessionary second half of 2023.
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