Q: Hi 5i
I have good gains on both of these ETFs and would appreciate your thoughts on sticking with them, reducing somewhat, or selling all. Both are near 52 week highs. Any seasonality to them? Any clues from the charts?
Thanks,
Greg
I have good gains on both of these ETFs and would appreciate your thoughts on sticking with them, reducing somewhat, or selling all. Both are near 52 week highs. Any seasonality to them? Any clues from the charts?
Thanks,
Greg
5i Research Answer:
XGD looks good fundamentally and technically. While miners' grades have declined, peak interest rates and a possible lower US dollar should continue to help the sector. Momentum is good, and financial stimulus from the pandemic is still working its way through the system. We would be comfortable holding this longer. XEG we would have similar views for differing reasons. The sector is simply too cheap to ignore. Momentum is solid and companies are returning lots of capital to shareholders (buybacks and dividends). Two wars ensure higher energy prices, generally. Again, we would be quite comfortable holding.