Regime Breadth Broadens as Leadership Narrows

We closed April with a broad equity recovery across our ETF universe, but leadership narrowed meaningfully under the surface. 54 of 59 ETFs (92%, +23.7pp on the month) held above their 10-month moving average, while 36 of 58 (62%, -17.2pp) outperformed SPY, leaving a +29pp absolute/relative gap. We see leadership concentrated in technology, growth, emerging markets, developed ex-US and selected Asia-Pacific equities, while low-volatility, equal-weight, dividend and quality exposures, alongside China, India and healthcare, fail to confirm; Germany and parts of defensive US equity are above their moving averages but still lag the benchmark.

We also saw fixed income strengthen on both axes, though the rotation is more credit-and-carry than duration-led. 15 of 17 ETFs (88%, +5.9pp on the month) held above their 10-month moving average and 10 of 16 (62%, +31.2pp) beat AGG, with EM debt, high yield, preferreds, TIPS and short-duration leading; short-duration adds stability, while Treasuries and long duration remain the rate-sensitive laggards and U.S. core aggregate sits above its moving average without relative leadership.

In specialty, we saw price breadth widen but relative quality deteriorate: 13 of 15 ETFs (87%, +20.0pp on the month) held above their 10-month moving average, yet relative breadth slipped to 8 of 15 (53%, -26.7pp), with momentum, semiconductors, clean energy, gold and managed futures leading while min-vol, REITs, covered-call equity, long/short equity and crypto fail to confirm. In commodities, we see oil and broad commodities carrying the clearest multi-timescale leadership, with copper and agriculture also holding above their moving averages.

10-Month Regime Breadth

Key Takeaways

• US Technology IYW, Nasdaq 100 QQQ and Technology XLK all closed above their 10-month moving averages and above their SPY ratios' 10-month averages; XLK also posted the strongest absolute 10-month return in this alert window at 26.5%. We read that alongside cross-timescale relative leaders in emerging markets (EEM), Taiwan equity (EWT) and South Korea equity (EWY), which keeps leadership tilted toward growth and cyclical equity beta rather than defensives.

• In fixed income, we see a clean duration split more than a credit warning: EM Sovereign Bonds EMB, High Yield HYG, Preferred Stock PFF, TIPS TIP and Corp. Credit VCIT all strengthened versus AGG, while government/treasury and long-duration exposure remained the relative lagging pocket. Because credit-sensitive segments are leading as duration lags, the weak spot sits in rate sensitivity rather than credit risk.

• Inside specialty, Momentum Factor MTUM improved in both price and relative strength, whereas Min Volatility USMV, Real Estate VNQ, Covered Calls Nasdaq JEPQ and Long/Short Equity FTLS are recovering in price without keeping up with SPY. Biotechnology IBB adds another nuance: its ratio crossed down despite a 13.9% 10-month return, which fits fading leadership rather than outright price failure.

FEATURED ETF — Technology Select Sector XLK

Other Technical Signal Events

EQUITY

↗ Price breakouts (cross-up 10M MA)

• EWG - iShares MSCI Germany ETF · 10M perf: -0.1%

• XLC - Communication Services Select Sector · +8.4%

• XLY - Consumer Discretionary Select Sector · +9.5%

• XLRE - SPDR Real Estate Select ETF · +9.9%

• VO - Vanguard Mid-Cap · +11.8%

• IWF - iShares Russell 1000 Growth ETF · +12.7%

• DIA - SPDR Dow Jones Industrial Average ETF · +14.0%

• QUAL - iShares MSCI USA Quality Factor ETF · +14.2%

• URTH - iShares MSCI World ETF · +17.0%

• VTI - Vanguard Total Stock Market · +17.6%

• SPYG - SPDR® Portfolio S&P 500 Growth ETF · +18.4%

• QQQ - Invesco QQQ · +21.5%

• IYW - iShares U.S. Technology ETF · +26.0%

• XLK - Technology Select Sector · +26.5%

↘ Price breakdowns (cross-down 10M MA)

• XLV - Health Care Select Sector · 10M perf: +9.7%

↗ Leadership gains (cross-up 10M MA vs SPY)

• SPYG - SPDR® Portfolio S&P 500 Growth ETF · 10M relative perf: +0.9%

• QQQ - Invesco QQQ · +3.6%

• IYW - iShares U.S. Technology ETF · +7.4%

• XLK - Technology Select Sector · +7.8%

↘ Leadership losses (cross-down 10M MA vs SPY)

• XLU - Utilities Select Sector · 10M relative perf: unch.

• SPYV - SPDR® Portfolio S&P 500 Value ETF · -1.1%

• VGK - Vanguard FTSE Europe · -2.5%

• QUAL - iShares MSCI USA Quality Factor ETF · -2.6%

• DIA - SPDR Dow Jones Industrial Average ETF · -2.8%

• RSP - Invesco S&P 500® Equal Weight ETF · -3.4%

• VIG - Vanguard Dividend Appreciation · -3.6%

• SDY - SPDR® S&P Dividend ETF · -3.9%

• VO - Vanguard Mid-Cap · -4.7%

• EFAV - iShares MSCI EAFE Min Vol Factor ETF · -5.7%

• XLV - Health Care Select Sector · -6.5%

• JEPI - JPMorgan Equity Premium Income ETF · -7.8%

• XLP - Consumer Staples Select Sector · -9.4%

• ACWV - iShares MSCI Global Min Vol Factor ETF · -12.0%

FIXED INCOME

↗ Price breakouts (cross-up 10M MA)

• PFF - iShares Preferred and Income Securities ETF · 10M perf: +7.3%

↘ Price breakdowns (cross-down 10M MA)

None for the month

↗ Leadership gains (cross-up 10M MA vs AGG)

• TIP - iShares TIPS Bond ETF · 10M relative perf: +0.3%

• VCIT - Vanguard Intermediate-Term Corporate Bond · +0.7%

• HYG - iShares iBoxx $ High Yield Corporate Bond ETF · +1.3%

• PFF - iShares Preferred and Income Securities ETF · +4.0%

• EMB - iShares J.P. Morgan USD Emerging Markets Bond ETF · +4.5%

↘ Leadership losses (cross-down 10M MA vs AGG)

None for the month

SPECIALTY

↗ Price breakouts (cross-up 10M MA)

• USMV - iShares MSCI USA Min Vol Factor ETF · 10M perf: +2.0%

• VNQ - Vanguard Real Estate ETF · +11.4%

• MTUM - iShares MSCI USA Momentum Factor ETF · +18.9%

↘ Price breakdowns (cross-down 10M MA)

None for the month

↗ Leadership gains (cross-up 10M MA vs SPY)

• MTUM - iShares MSCI USA Momentum Factor ETF · 10M relative perf: +1.3%

↘ Leadership losses (cross-down 10M MA vs SPY)

• IBB - iShares Biotechnology ETF · 10M relative perf: +13.9%

• JEPQ - JPMorgan Nasdaq Equity Premium Income ETF · +1.3%

• FTLS - First Trust Long/Short Equity ETF · -4.5%

• VNQ - Vanguard Real Estate ETF · -5.1%

• USMV - iShares MSCI USA Min Vol Factor ETF · -13.0%

COMMODITIES

No event for the month

Romain Gandon

CEO, Quantlake

Disclaimer: This report is for informational and educational purposes only and does not constitute investment advice.