The U.S. doesn’t win anymore.
That’s the takeaway from the first week of MarketWatch’s March ETF Madness, a continuing series of bouts between 32—now 16—countries for percent-change supremacy.
Get caught up: Here comes MarketWatch’s March ETF Madness
The United States, as measured by an exchange-traded fund that tracks the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.12% , was dealt a knockout blow by South Africa /zigman2/quotes/200534867/composite EZA -2.36% in the most lopsided match of the week. Somewhat embarrassingly for Wall Street, the financial capital of the world, the U.S. was the worst-performing country of the first round, up a slender 0.2% on the week. It held no chance against South Africa’s 6.1% climb—a rally that was eclipsed only by Russia’s /zigman2/quotes/206979425/composite ERUS -2.12% 6.8% charge.
Somewhat impressively, the U.S.’s weekly gain—the seventh of the past eight weeks—meant that all 32 single-country funds rose on the week, a strong indication of how equities remain a favored asset class world-wide. The advance also comes amid a growing sense that global economies are enjoying, however modest, various stages of improvement, with central bankers tapping the brakes on a raft of measures intended to pump life into stagnant economies in the aftermath of the 2008-09 financial crisis.
Here’s your updated bracket, including who is moving onto the next round and their next opponents.
A good part of South Africa’s gain in the week was due to Naspers Ltd. N /zigman2/quotes/205954517/delayed ZA:NPN -0.47% an internet and entertainment company that is by far the largest holding of the South Africa ETF—accounting for more than 24% of the portfolio. It rose 2.4% over the course of the week. Other top holdings also posted strong weekly gains, including telecom firm MTN Group Ltd. /zigman2/quotes/202575393/delayed ZA:MTN -0.59% (4.9%), Standard Bank Group Ltd. /zigman2/quotes/202043361/delayed ZA:SBK -3.45% (2.5%), and energy company Sasol Ltd. /zigman2/quotes/201916339/composite SSL -1.88% , the U.S.-listed shares of which gained 3.8% over the week.
Also benefiting from its relatively concentrated portfolio was Israel /zigman2/quotes/204126570/composite EIS +0.15% , which rose 2.7% in the week. On Monday, Intel Corp. /zigman2/quotes/203649727/composite INTC -0.85% said it would purchase Mobileye NV for $15.3 billion—leading to a weekly pop of 28% for the stock. Mobileye accounts for 7.9% of the ETF’s portfolio, it was able to completely cover the 1.9% rise of Switzerland ETF /zigman2/quotes/204479296/composite EWL -0.33% like so much cheese melted on a raclette.
Perhaps the most closely watched match of the week—and one of the closest, coming down to a nail-biting finish—was between Japan /zigman2/quotes/201162210/composite EWJ -0.44% and the Netherlands /zigman2/quotes/207775290/composite EWN -0.68% . The latter was involved in one of the most important trading events of the week, when it held an election that was seen as a bellwether for the strength of populist movements throughout Europe. Trading volume on the Netherlands fund topped 2.8 million over the week, the highest weekly total since December.
Ultimately, populist candidate Geert Wilders failed to take control, which had been a concern. Wilders has strong anti-European Union views, and he had pledged to take the Netherlands out of the euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0675% .
“This was a potential land mine. Had he won and the country voted to leave the EU, that could’ve threatened the stability of the whole body and maybe even led to the dissolution of the euro,” said Adam Sarhan, chief executive officer at 50 Park Investments.
Still, any relief that came from the results wasn’t enough to clinch the win. Ultimately Japan pulled it out in a squeaker: up 0.95% compared with Netherland’s 0.86% gain.
Among other matches, Latin America was dealt a pair of body blows, with Brazil /zigman2/quotes/208893627/composite EWZ -4.58% losing to Indonesia /zigman2/quotes/204064829/composite EIDO -0.50% and Peru /zigman2/quotes/203445831/composite EPU -0.03% falling to Italy /zigman2/quotes/207981587/composite EWI -1.10% . Chile /zigman2/quotes/205935893/composite ECH -1.62% remains in the game, however, having outpaced Singapore /zigman2/quotes/200329707/composite EWS -0.37% more than twice over.
The key question going forward is whether this week’s highfliers will be able to maintain their momentum, or if the market will see a bunch of tumbling Icarus-like funds in the week ahead.