Falling rates spur July’s returns

Article Excerpt

Further indications that central banks around the world are now moving to ease interest rates prompted gains for several rate-driven market groups in July. Top performers during the month came from various sectors that lagged the high-flying technology sector over the past few years. These included homebuilders, telecommunications, small-cap stocks, real estate, dividend-paying companies, and utilities. Some examples: the iShares Home Construction ETF (New York symbol ITB) gained 22.4%, and the SPDR S&P Telecom ETF (XTL), 14.8%. Meanwhile, semiconductors (computer chips), U.S. technology, and U.S. growth ETFs saw losses. The Van Eck Semiconductor ETF (SMH) lost 5.4% in the month and the SPDR Technology Select (symbol XLK) dropped 4.0%. Still, semiconductors are up by more than 40% so far this year, despite the recent drop. As measured by the Vanguard Total World Stocks ETF (symbol VT), global equities added 1.8% in the month. U.S. equities—the Vanguard S&P 500 ETF (VOO)—were up by 0.9% while the iShares MSCI Canada Equity ETF (EWC) outperformed with a 5.4% gain. The iShares Emerging Markets ETF (IEMG) added just 0.6%,…