May HANDLS Market Recap: Cloudy with a Ray of Sunshine

The graph and table above provide return data for major income-oriented asset categories for the month of May 2023 and YTD 2023. Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.

Cloudy with a Ray of Sunshine

After a quiet April, volatility returned to the securities markets in May as investors fretted over the outcome of the U.S. government’s debt ceiling negotiations. Concerns about a potential default by the federal government drove interest rates higher, resulting in a -1.2% return for the Core Fixed Income category for the month. Large cap tech stocks were the sole bright spot in May, powering the Core Large Cap Equity category to a 5.2% return for the month.

Every income-oriented category that makes up the Nasdaq Dorsey Wright Explore portion of HANDLS Indexes generated negative returns in May. The Growth & Income category, which provides exposure to both equities and bonds, led the pack with a -0.2% return. The worst performing categories were Utilities (-5.7%) and REITs (-4.1%), which tend to underperform during periods of rising interest rates.

The Nasdaq 5HANDL Index returned -1.0% for the month. The Nasdaq 7 HANDL Index, the 1.3x leveraged version of the index, returned -1.5% in May while the Nasdaq 10 HANDL Index, the 2.0x leveraged version of the index, delivered a -2.6% return.

*The graph and table above provide return data for major income-oriented asset categories since inception of HANDLS Indexes (3/12/2009). Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.  Inception dates for MLPs (1/2/2013), Build America Bonds (1/2/2010) and Active Fixed Income (1/2/2014)

For the year-to-date period through the end of May, the Core Large Cap Equity category remained the leader, delivering a scorching 22.7% return. The Core Fixed Income category was up 2.5% for the year-to-date period. For the income-oriented categories that make up the Nasdaq Dorsey Wright Explore portion of HANDLS Indexes, the Growth & Income category remained the leader for the year-to-date period, providing a 9.6% return. The Utilities (-7.6%) and REITs (-2.2%) categories were the only income-oriented category tracked by HANDLS Indexes to generate negative returns during the year-to-date period. The Nasdaq 5HANDL Index was up 4.3% through the end of May, versus returns of 4.9% and 6.2% for the Nasdaq 7 HANDL Index and Nasdaq 10 HANDL Index, respectively.

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