There are no changes to any of the iShares models this week. As we do each quarter, today we review the performance of the models covered in this report. US equities staged a strong rebound from their Q1 slump as the S&P 500 (SPX) gained 15% for the quarter. The iShares Sector Rotation Model (ISHRSECT) outperformed its benchmarks gaining more than 18% for the quarter. ISHRSECT benefited from its exposure to the iShares Semiconductor ETF (SOXX) which was up nearly 95% for the quarter. The iShares Tactical Model (ISHRTACTICAL) gained 13.5% for the quarter, trailing the S&P 500 (SPX) by about 1.4%. ISHRTACTICAL also benefited from semiconductor exposure but was hampered by exposure to gold and broad commodities. While it trailed in Q2, ISHRTACTICAL remains ahead of both benchmarks by more than 5% on a year-to-date basis.

Both international developed and emerging markets advanced in Q2 though there was a stark performance difference between the two. The iShares MSCI EAFE ETF (EFA) gained a little under 7% while the iShares MSCI Emerging Markets ETF (EEM) gained more than 20%. The iShares International Model (ISHRINTL) finished between the two benchmarks, gaining more than 15% for the quarter. Year-to-date, ISHRINTL has gained more than 25%, outpacing EEM by 75 bps and EFA by more than 17%.

The iShares MSCI US Core Bond ETF (AGG) was down about 30 bps in Q2 as interest rates rose during the quarter. The iShares Fixed Income Model (ISHRFIXED) gained 2.28%, outpacing AGG by nearly 2%. ISHRFIXED was fully invested in international bonds through out the quarter, which were not harmed by the rise in US rates.

This section of the report categorizes select iShares Fixed Income and Currency ETPs by their respective fund groups. Along with each group, you can view the Average Group Score, which is an average of the scores of all funds represented in that particular group. Those iShares ETFs that meet or exceed the Average Group Score will be highlighted in green in order to easily view those ETFs that have superior strength within their respective group. You want to focus on those ETFs that exhibit superior strength when looking to add new exposure to a particular group.

The distribution curve places each ETF on a bell curve according to their respective degrees of overbought or oversold status using a 10-week distribution. ETFs that are statistically oversold will appear on the left-hand side of the bell curve, while those that have become statistically overbought will appear on the right-hand side of the bell curve. Perhaps the most useful attribute of this feature is that it displays the entire universe on the curve at one time with an "average level" to give us a general picture of whether the iShare ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong market ETFs that have regressed back toward mean conditions based on market weakness, or have become oversold based upon extreme market weakness. 

Weekly Distribution is a short-term gauge that is most helpful in timing entry and exit points, while the longer-term information of trend and relative strength is a more controlling factor in the decision of whether to buy or sell. The Distribution Curve below displays those ETFs with positive RS in uppercase letters and those ETFs with poor RS versus the market in lowercase letters. As well, those ETFs that are on a Point & Figure Buy signal appear in Green letters, while those on Sell signals can appear in Red letters. Box Color indicates the Sector Status Rating. Green = Favored, Yellow = Average, and Red = Unfavored.

This section of the report categorizes select iShares ETFs by their respective broad group. Along with each group, you can view the Average Group Score, which is an average of the scores of all funds represented in that particular group. Those iShares ETFs that meet or exceed the Average Group Score will be highlighted in green in order to easily view those ETFs that have superior strength within their respective group. You want to focus on those ETFs that exhibit superior strength when looking to add new exposure to a particular group.

Weekly Updates: No changes.