Stocks in the group of wealthy democracies known as the G7 are up in 2023, with exchange-traded funds tracking those regions climbing last week amid a broader recent rally in equities globally.
Funds targeting the group of seven democracies — represented in the U.S. by the SPDR S&P 500 ETF Trust
SPY
and also including the iShares MSCI Canada ETF
EWC,
iShares MSCI Germany ETF
EWG,
iShares MSCI Italy ETF
EWI,
iShares MSCI Japan ETF
EWJ,
iShares MSCI France ETF
EWQ
and iShares MSCI United Kingdom ETF
EWU
— have all posted gains in the year to date.
The S&P 500 index, a widely followed benchmark for U.S. stocks, is trading near its all-time high, seen about two years ago.
“Looking at the charts of all seven ETFs representing the G7, they’re all right at or near 52-week highs,” Bespoke Investment Group said in a note Monday. “One key difference between the U.S. and the rest of the world, though, is that while other countries are still testing or [are] only marginally higher than their summer highs, the U.S. handily took that level out over a week ago as it has been a leader.”
BESPOKE INVESTMENT GROUP NOTE EMAILED DEC. 18, 2023
As seen in the chart above, the U.S. ETF is one of four with a gain surpassing 20% year to date, according to Bespoke, which added: “Only Italy’s 27.8% topped the S&P 500.”
U.S. stocks surged in November and have continued their rally in December. The S&P 500 finished Friday just 1.6% from its record high of 4,796.56, reached Jan. 3, 2022, after rallying for seven straight weeks, according to Dow Jones Market Data.
The S&P 500
SPX
was trading 0.6% higher on Monday afternoon at around 4,746, while the Dow Jones Industrial Average
DJIA
was edging up 0.1% after scoring a fresh record close on Friday, according to FactSet data, at last check.
Read: Dow posts third straight record close, S&P 500 scores longest weekly win streak in six years
The SPDR S&P 500 ETF Trust has this year seen gains of more than 25% on a total return basis as of Monday afternoon.
Global stocks rise as China struggles
The global equities market has broadly rallied this year, including in emerging markets. That’s despite losses in China, an authoritarian government with the world’s second-largest economy.
Shares of the iShares MSCI ACWI ETF
ACWI,
which tracks stocks globally in developed and emerging markets, have jumped around 19.6% this year as of Monday afternoon, according to FactSet data, at last check. The iShares MSCI Emerging Markets ETF
EEM
has trailed with 5.4% gains in 2023, dragged down by China.
The iShares MSCI China ETF
MCHI
has seen its shares plunge this year around 14%, while the iShares MSCI Emerging Markets ex China ETF
EMXC,
which excludes the country, has risen almost 15% year to date, according to FactSet data, at last check.
Meanwhile, shares of the Freedom 100 Emerging Markets ETF
FRDM,
which excludes autocracies such as China, has soared more than 17% this year, including a rally of more than 14% so far this quarter, according to FactSet data, at last check.
