Weekly Market Trends

Harvest Bond Losses and Pivot to Active

The Bloomberg US Aggregate Bond Index is down 16%.1 The average intermediate core ETF is down 15.9%.2 And only 31% of active intermediate core managers are outperforming their benchmarks.3

That means plenty of tax-loss harvesting opportunities across fixed income. As volatility persists, consider investing your sale proceeds in a core bond exposure with a flexible active mandate that supports defensive positioning.


Head of SPDR Americas Research

This article was written with contributions from Ronnie Kuriakose. Ronnie is a Research Analyst on the SPDR Americas Research Team.

The S&P 500 Index gained almost 5% this past week on the news of better-than-expected earnings. Sectors rose across the board, with Energy up more than 8%.

Changes in World Leadership

  • Liz Truss resigned as the UK’s prime minister after just forty-five days in office. Rishi Sunak is set to assume the role this week, the third person to lead the country in seven weeks.4
  • Xi Jinping secured a historic third term as the leader of China, cementing his status as the country’s most powerful figure in decades.5
  • India’s Congress party elected Mallikarjun Kharge as president; he is the first leader in 24 years from outside the Nehru-Gandhi family.6

Earnings Better than Expected

With the bar lowered for this earnings season, 72% of companies have topped analyst consensus estimates so far. Though better than expected, this is still lower than the five-year average of 77%.7

Q3 GDP and Housing Data Due

A series of home pricing data will be released this week. New home sales, pending home sales, and home price indexes are all expected to slow.

The first print of Q3 GDP arrives on Thursday — positive GDP after two consecutive quarters of decline could stem recession fears.

Implementation Idea: The SPDR® DoubleLine® Total Return Tactical ETF [TOTL]

The active SPDR® DoubleLine® Total Return Tactical ETF [TOTL] places a heavy emphasis8 on mortgages relative to its benchmark of the Agg, which have historically been less volatile and more efficient in generating yield relative to other investment-grade bond sectors9. The fund has had lower drawdowns than its peer group median in 91% of rolling six-month periods since inception.10

TOTL’s defensive positioning also has led the fund to perform well relative to its peers, ranking in the 13th percentile of Intermediate core-plus bond funds on a trailing-one year basis.11 TOTL is outperforming its benchmark on a YTD basis by +172bps.12

TOTL Percentile Rank vs. Excess Return Relative to Peer Group

US Crude Oil and Petroleum Products Inventory at Five-Year Low

TOTL Standard Performance as of September 30, 2022

 

Annualized

 

1 Month (%)

QTD (%)

YTD (%)

1 Year (%)

3 Year (%)

5 Year (%)

10 Year (%)

Since Inception (%)

SPDR® ETF (NAV)

-4.10

-3.75

-13.09

-13.26

-3.43

-0.74

 

0.30

SPDR® ETF (MKT)

-4.15

-3.72

-13.00

-13.53

-3.54

-0.83

 

0.29

Source: ssga.com, as of September 30, 2022. Inception date: February 23, 2015. . Gross expense ratio: 0.55%. Performance returns for periods of less than one year are not annualized. Past performance is not a reliable indicator of future performance. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted. All results are historical and assume the reinvestment of dividends and capital gains. For SPDR ETFs, visit ssga.com for most recent month-end performance. The market price used to calculate the Market Value return is the midpoint between the highest bid and the lowest offer on the exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. If you trade your shares at another time, your return may differ. The gross expense ratio is the fund's total annual operating expenses ratio. It is gross of any fee waivers or expense reimbursements. It can be found in the fund's most recent prospectus.


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