Regime Trends: 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.

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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.

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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.

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• 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.

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• 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.

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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.