Isaac Newton ETFs: Winners Week 4 (EUFN, EPOL, EMFN, INDY)

---

Newton’s First Law: An object in motion will stay in motion unless acted upon by an external force.  Isaac Newton ETFs, winners for week 4 center on Europe.

ETF winners last week were focused on Europe and European financial ETFS as hopes for a settlement to the European debt crisis bubbled to the fore.

Leading ETFs for the week were iShares MSCI European Financial Index (NYSEARCA:EUFN) which gained 8.9%, iShares MSCI Emerging Market Financial Index (NYSEARCA:EMFN) up 8.1% and iShares MSCI Poland Index (NYSEARCA:EPOL) up 6.9%.

Markets took heart in the talks on Greece’s debt making progress and Germany and France moving decisively towards new budget discipline to be enacted at their end of the month European summit.  However, danger still lurks in the region as credit default swap pricing rose and interest rates in Portugal spiked on concern that the country won’t be able to finance its debt.

Looking to a longer, four week scale, the Isaac Newton ETFs look considerably different with winners focused in the United States.

Leading four week winners are iShares Dow Jones Home Construction Index (NYSEARCA:ITB) up 24.4%, iShares PHLX SOX Semiconductor Sector (NYSEARCA:SOXX) gaining 20.1% and iShares India Nifty Fifty Index (NYSEARCA:INDY) gaining 17.8%.

Semiconductors have rallied on good earnings in the tech sector along with the ongoing recovery from the floods in Thailand while home-builders have benefited from improving housing prices and building activity and reports that the bottom may have been reached in the battered housing sector.

Notably, just below the top three monthly winners, we see again iShares MSCI European Financials (NYSEARCA:EUFN) and the emerging markets financials (NYSEARCA:EMFN) showing steady gains of approximately 16% each, indicating ongoing strength in these two ETFs.

Bottom line: Momentum is seen in Europe, home-building, emerging markets, all areas of “risk” that have been beaten down during the financial crisis and global economic slowdown.  Isaac Newton ETFs offer a look at what is happening below the surface and where strongest momentum lies.  Today’s reading points to increased confidence in global equities and financial markets.

 Go to ETF Home for more ETF articles and analysis