May 1,2025
Welcome to our Quantitative Outlook, your monthly comprehensive guide to the latest trends and developments in Quantlake’s world of Exchange-Traded Funds (ETFs).
Small-cap ETFs faced downgrades in April while bond and alternative ETF ratings held steady. Growth and international equities edged up modestly.
🔹 Equity Markets
In April, we assigned Negative ratings to four small-cap ETFs: SLYG, IWM, IJR, and SLYV. Growth-oriented ETFs posted the strongest returns for the month, with IWF and QQQ each up 0.8%, and MDYG rising 0.7%.
Dividend strategies showed declines: SCHD fell 0.3%, while VYM and VIG each dropped 0.2%. International exposure fared better—VEA rose 0.4%, and both VWO and EEM gained 0.3%.
VYM continues to hold our longest-standing Positive rating (since August 2020), with a 77.7% return since initiation. S&P 500 ETFs—VOO (43.0%), SPY (42.6%), and EFIV (42.3%)—all maintain Positive ratings issued in November 2022. Across our equity coverage, 23 ETFs currently carry Positive ratings, while 4 are rated Negative.
🔹 Bond Markets
Our bond ETF ratings held steady through April, with no changes made. Short-duration Treasury ETFs—SHV, ICSH, BIL, VGSH, and SHY—retain Positive ratings, some dating back as far as 2008. High-yield corporate bond ETFs HYG and JNK have held Positive ratings since November 2023, while broader bond funds such as AGG, BND, and LQD maintain Positive ratings established in June 2024.
The only segment currently rated Negative is long-term Treasuries: TLT has held a Negative rating since February 2022, and VGLT since October 2024. Price movements were muted in April. Long-duration Treasuries returned 0.8–0.9%, while most short-duration bonds remained unchanged.
🔹 Alternative Assets
Ratings across alternative ETFs remained unchanged in April. Gold ETFs IAU and GLD continue to hold Positive ratings from December 2022. GBTC has carried a Positive rating since September 2023, and SLV since March 2024.
Real estate ETFs IYR and VNQ have held Positive ratings since June 2024. Commodity-focused DBC and USO maintain Positive ratings established in October and November 2024, respectively.
In terms of April returns, GBTC gained 3.1%, SLV declined 1.2%, and gold ETFs slipped 0.2%. Real estate was stable, with IYR up 0.1% and VNQ flat. DBC was unchanged, while USO fell 0.3%.
Takeaways
We continue to monitor markets with discipline and a long-term view. Staying systematic helps us tune out short-term noise and stick to our process.
Happy Long-Term Investing!