The third quarter started off pretty solid, but soon saw a burst
of volatility to finish up the period. A surprise 'no taper'
announcement from the Fed and now the government shutdown and debt
ceiling debacles to open up 2013's final quarter look to make the
next few months a bit more volatile.
Still, global markets performed admirably in the third quarter,
with U.S. stocks rising modestly in the time period. Foreign
markets were much more mixed, as emerging markets staged an
impressive comeback after facing severe weakness, while broad
developed markets like Europe saw strength throughout the quarter.
While many European funds saw strong performances for the third
quarter, there were a few ETFs that were even more impressive in
the time frame. While some leveraged and inverse ETFs which were
properly positioned showed strong gains, there were plenty of
unleveraged equity ETF winners too (also read
4 Unbeatable ETF Strategies for Q4
In fact, a handful of equity ETFs actually saw gains of at least
30% for the third quarter alone. Below, we highlight a few of these
strong momentum plays, which may be worth keeping an eye
on here in the fourth quarter to see if they can keep up their
winning ways heading into the home stretch of 2013:
Thanks to solid earnings reports, social media stocks were on fire
in the third quarter. Companies like
posted great results and bullish outlooks for the future while a
move to high beta names helped as well (see
Social Media ETF on Fire After String of Earnings
This trend was great news for the
Global X Social Media ETF (
which is arguably the best ETF barometer for the social media
industry. The ETF is well spread among large and mid cap stocks,
while the U.S. (50%), China (30%), and Japan (7%) take the top
spots from a country look.
In terms of performance, SOCL added just over 33% in the third
quarter, putting its YTD gain at just over 52%.
Although China had a rocky start to the year, the nation is on much
more solid footing now. GDP growth is expected to remain above 7%,
industrial and consumer sentiment numbers have been much better,
while key trading partners like Europe and the U.S. are seeing more
favorable trends as well.
The trends in China have also been especially favorable in the
technology market, much like what we saw in SOCL. This strong tech
performance has made an ETF like the
PowerShares Golden Dragon China Portfolio (
a top performer as of late (see
3 Emerging Market ETFs Surviving the Slump
This ETF allocates over 55% of its portfolio to technology, with
consumer discretionary and health care each taking up,
respectively, 19% and 8% of the fund. This sector allocation has
helped PGJ outperform other China ETFs in the third quarter,
pushing the gain in the time period to 36.6%, and the YTD
performance to 50.5%.
The biggest winner of the third quarter though was undoubtedly the
alternative energy space. Companies in this segment-particularly in
the solar world-saw incredible gains as better earnings forecasts
and outlooks (along with a firm oil price) has rekindled interest
in this corner of the market (read
5 Clean Energy ETFs Leading the Sector's Surge
was definitely a solid play in this segment (up 35.9% in Q3), the
real winner was the
Guggenheim Solar ETF (
, which added 45.3% in the quarter, and over 120% so far in 2013.
This fund benefited from the aforementioned trends in the space, as
well as its small cap focus, and its heavy international exposure
(just one-quarter was in the U.S.).
While it is important to remember that solar still has a long way
to go until it can back to pre-recession prices, the magnitude of
this recent move is astounding. As an example of just how far the
space has come, consider that, of the top four U.S. listed holdings
in TAN, three have seen their prices
in Q3, suggesting that the space might finally be back on track in
a big way.
Want the latest recommendations from Zacks Investment Research?
Today, you can download
7 Best Stocks for the Next 30 Days
Click to get this free report >>
FACEBOOK INC-A (FB): Free Stock Analysis Report
MKT VEC SOLAR (KWT): ETF Research Reports
PWRSH-GL DR HA (PGJ): ETF Research Reports
GLBL-X SOCL MDA (SOCL): ETF Research Reports
GUGG-SOLAR (TAN): ETF Research Reports
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report