Louis just published a note with our updated Global ETF Power Rankings.
This is always one of my favorite universes to explore, but it’s especially true right now, with participation spreading across international equity markets.
Here’s what stood out…
US stocks currently find themselves in the middle of the pack. The S&P 500 isn’t one of the weaker country indexes, but it also isn’t one of the strongest.
A nice mix of countries – from Vietnam and Greece to Peru – are currently at the top of the leaderboard. This speaks to the broad participation we’re seeing overseas and the healthy blend of bullish action taking place in different regions of the world.
Meanwhile, some old leaders like Argentina and India are down in the dumps, rounding out the bottom of our leaderboard.
Louis highlighted India, and compared it with the other Emerging Market heavyweight in that region… which is, of course, China.
India is breaking down while China is breaking out.
And here’s another way to view the relationship. This is a ratio chart of the two country ETFs, iShares China $FXI vs iShares India $INDY:
Because, in my mind, this is simple. It may not be a zero-sum game between China and India, but these two countries are undoubtedly fighting for the same funds.
Emerging market money managers poured out of China in recent years and parked a lot of that capital in India. It worked great for a while. But since the relative trend shifted in China’s favor last year, we’re seeing this trade unwind in a big way.
And it makes sense. The money that flowed into India over the past few cycles is simply returning to its source.
If and when this trend reversal completes, it will mark an important piece of confirming evidence for the new bull market in China.
Remember, in strong and sustained bull runs, assets don’t just move higher on an absolute basis– they also outperform their alternatives.
Based on the charts, I think we should all prepare for China to outperform over the long term. China is also working on similar reversal patterns relative to the S&P 500, Emerging Markets Index, and MSCI EAFE.
No one is ready for China to be the new world leader… but that’s exactly where these trends are headed.
And we’ve been positioning for it.
We recently sold doubles on our Alibaba and Baidu calls. Now we’re riding these Chinese blue chips for free for the next few months.
We’ve also added a number of more speculative Chinese stocks as the risk-on groups are leading over there. And we have another handful on a short list that we’re watching and ready to pounce on this week.
And don’t forget about our other research offerings. We’re running promotions across the board this weekend, but they end today.
If you’ve been watching crypto from the sidelines, seeing headlines of tokens you’ve never heard of providing investors with ludicrous returns, an ASC Crypto membership is for you. Louis is literally my go-to-guy for my crypto investments; he’s covering coins I’d never even heard of but that are quietly making new highs right now.
He pounded the table on Ethereum when it was below 2,000, and it subsequently went on to hit new all-time highs just shy of 5,000. But more recently, he’s flagging the name of three tokens quietly powering Ethereum’s infrastructure — and he believes they can quadruple in the back half of the year.
