ETF Wrap: As U.S. stocks slump, here’s how the SPY ETF stacks up against global equities in third quarter

by | Sep 28, 2023 | Stock Market

Hi! In this week’s ETF Wrap, you’ll get see how international stocks, including in emerging markets, stack up against U.S. equities in the third quarter. Please send feedback and tips to [email protected] or [email protected]. You can also follow me on Twitter at @cidzelis and find me on LinkedIn. Isabel Wang is on Twitter at @Isabelxwang.

Sign up here for our weekly ETF Wrap. The U.S. stock market, as measured by the S&P 500 index, is outperforming global equities in the third quarter despite a rough September, as the index faces its worst quarterly performance in a year with just one trading day left in the three-month period. The iShares MSCI ACWI ex U.S. ETF
which tracks international stocks while excluding the U.S., is down 4.3% this quarter through Thursday on track for its first quarterly loss since the third quarter of 2022, FactSet data show. The SPDR S&P 500 ETF Trust
is also heading for potentially its first quarterly drop since the same period, with a drop of 3.3% so far in the third quarter. Third-quarter trading will wrap up Friday after what’s been a volatile month for markets. A surge in Treasury bond yields has hurt stocks as investor worry over the Federal Reserve keeping interest rates higher for longer. Meanwhile, an ailing property sector and slowing growth in China, the world’s second largest economy after the U.S., is worrying investors who have been disappointed by its stimulus efforts. Chinese equities have weighed on the performance of emerging-markets stocks broadly.  The iShares MSCI Emerging Markets ETF
is down 4.2% so far this quarter, trailing the S&P 500 index
while faring a bit better than developed market equities in Europe, Australia and the Far East as tracked by iShares MSCI EAFE ETF
according to FactSet data on Thursday afternoon. “Demographics is destiny for emerging markets,” said Perth Tolle, founder of Life + Liberty Indexes, in an interview, but for China, “demographics is a time bomb that is now going off.” Read: China reports first population drop in decades as birthrates plunge China is by far the biggest weight in the iShares MSCI Emerging Markets ETF
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