Strength among the various emerging-market ETFs goes beyond the usual suspects to include the European emerging markets of Russia and Poland. Factor ETFs have been very persistent, yet they are sending investors a mixed message. Defensive sectors are among those gaining relative strength this week.

Sectors: Materials grabbed the top spot away from Financials a week ago and has succeeded in fending off a retaliatory strike so far. I added the “so far” qualifier because Financials is directly on the heels of Materials, and one small misstep could rearrange the rankings once again. While the top three sectors held their positions, the eight others all shifted over the past week. Industrials, Consumer Discretionary, Consumer Staples, and Health Care moved higher by one spot, and Utilities jumped three places higher. The theme here is that the defensive sectors are improving in relative strength, although they are still performing below average in absolute strength. Sectors falling in relative strength were Telecom, Real Estate, and Energy. Health Care moved from a negative to a positive momentum score and was replaced by Energy on the bottom.

Factors: High Beta continues to provide leadership and maintains a healthy margin over the other factors. If you are looking for signs of persistence among the investment factors, the top five have now been in an identical lineup for seven consecutive weeks. However, do not assume this persistence will last forever or you could find your portfolio aligned with the worst-performing factors when the market turns. In the lower half, Momentum and Dividend Growth swapped places, while their momentum scores barely budged. Although the factor rankings have been stable, they continue to send investors a mixed message. High Beta, Small Size, Momentum, and Growth are the factors typically associated with aggressive investing. However, while High Beta and Small Cap have been leading the charge, Momentum and Growth have not been able to break into the top-five factors for the past dozen weeks. Instead, nonaggressive factors such as Value and Fundamental have kept them out of the running.

Global: Emerging Markets is moving up strong, and not all of its sources of strength are visible on the Global Edge chart. We track three developing market benchmark ETFs each week. For the diversified category, the current benchmark is the iShares MSCI Emerging Markets ETF (EEM), which encompasses all 25 countries falling within MSCI’s Emerging Markets classification. We also track two subcategories using the benchmark ETFs of SPDR S&P China (GXC) and iShares Latin America 40 (ILF). Latin America heads up the rankings again this week, primarily thanks to the strength of Brazil. China accounts for 25% of the Emerging Markets benchmark, and it climbed four places higher in the rankings this week. However, the developing markets of Europe do not have their own subcategory in the chart, and they have been strong contributors lately. What you do not see in the chart is the strong momentum of Russia and Poland—two countries that helped propel Emerging Markets from fifth to second this week. When the emerging-market categories are gaining relative strength, then the developed markets must be losing relative strength, and that is what we have today: Canada slipped from second to third, the Eurozone fell from third to fifth, EAFE dropped three places, and the U.K. is now a notch lower. Japan sits on the bottom for a second week.

Disclosure: Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.