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Stocks markets closed Friday with losses on the week, after elevated volatility in a handful of small stocks led to a bout of selling. The volatility appeared to have been induced initially by a short squeeze on shares of video-game retailer Gamestop Corp. (NASDAQ: GME), which had been heavily shorted by a number of large hedge funds. The move appears to have been inspired by a message board on social media channel Reddit. Smaller retail investors seem to have banded together to buy shares of Gamestop using trading app Robinhood, boosting share price by 400% during the week. The strategy spread to some other heavily-shorted issues, causing further short-covering and attendant market volatility.
Investors were also poring over the latest quarterly earnings reports, fretting that the slow rollout of the Covid-19 vaccine, and concerns about its effectiveness on more virulent strains, might weigh on earnings over the next two quarters.
The result was a weekly loss of 3.3% for the S&P 500 Composite Index and a loss of 1.1% for the month. The Nasdaq Composite Index followed suit with a 3.5% loss on the week, and a 1.4% loss on the month. Toronto’s S&P/TSX Composite Index rode on U.S. market’s coattails for a 2.9% loss on the week, but only a marginal 0.6% decline on the month. Crude oil closed the week just slightly below breakeven but rose 7.5% on the month overall. Gold, meanwhile, languished with a 0.5% loss on the week and a decline of 2.5% on the month.
Monitor the main stock and commodity indices daily with the Fund Library’s interactive Markets Page.
* Invesco launches four index fund-of-funds. Invesco Canada announced on Jan. 28 the debut of four new index mutual funds structured as fund-of-ETFs.
Invesco S&P 500 ESG Index ETF Fund tracks the S&P 500 ESG Index on a hedged* basis. The index uses S&P DJI’s ESG criteria to select U.S. companies that meet certain ESG criteria while still offering similar overall industry group weights to the S&P 500 Index. The fund intends to directly invest in the Invesco S&P 500 ESG Index ETF (TSX: ESG.F) to achieve its investment objective.
Invesco S&P/TSX Composite ESG Index ETF Class tracks the S&P/TSX Composite ESG Index, which uses S&P DJI’s ESG criteria to select companies from the benchmark Canadian S&P/TSX Composite Index. The fund holds the Invesco S&P/TSX Composite ESG Index ETF (TSX: ESGC) to achieve its investment objective.
Invesco NASDAQ 100 Index ETF Fund tracks the NASDAQ-100 Index on a hedged* basis. It holds the Invesco NASDAQ 100 ETF (NSD: QQQM) to achieve its investment objective.
Invesco NASDAQ Next Gen 100 Index ETF Fund tracks the NASDAQ Next Generation 100 Index on a hedged basis. The index consists of 100 of the largest non-financial companies listed on the NASDAQ Stock Market outside of the NASDAQ-100 Index. The fund holds the Invesco NASDAQ Next Gen 100 ETF (NSD: QQQJ) to achieve its investment objective.
* BMO launches 10 new ETFs. BMO Asset Management Inc. on Jan. 26 launched 10 new exchange trade funds (ETFs), including a suite of ETFs focused on innovation.
* Fidelity launches three new funds. Fidelity Investments Canada on Jan. 26 debuted one new mutual fund and two new ETFs:
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