Yesterday I looked at US equity sectors in search of signs that a new bullish trend is emerging. The numbers (still) don’t look encouraging. Is the outlook any better for US equity factors? Not really.
There are subtle if weak hints of a bullish revival for some funds, but it’s still far too early to make that call. But if you’re looking for a short list of potential rebounders to monitor, the iShares MSCI USA Min Vol Factor ETF (USMV) deserves attention.
Granted, the case for expecting USMV’s downside trend to continue still looks far more compelling. But on a relative basis against other factor funds, the ETF — along with large-cap growth (IWV) and the quality factor (QUAL) — may be flirting with recovery, based on a proprietary set of trending indicators (see here for methodology details).
To be clear, any “rebound” in IVW, USMV or QUAL could quickly turn out to be noise and so we’ll have to wait to see what the coming days and weeks bring. Meantime, staying defensive across the equity factor landscape is still prudent. ■