Though the U.S. stock market kicked off second quarter with a
record high, it lost steam in the past five trading days due to a
broad sell-off in the high growth and high beta stocks. Investors
are apprehensive of lofty valuations and warnings on Q2 earnings
The Momentum Stock Crash Puts These ETFs in
Global activity is picking up but the recovery is still subdued.
This is primarily thanks to Chinese slowdown, geopolitical tensions
in Ukraine, prospect of interest rate hike sooner than expected in
the U.S., persistently low inflation in developed economies and
higher borrowing cost in emerging markets.
The trend is likely to continue at least in the near term,
suggesting an uncertain outlook on the stock markets. Meanwhile,
commodities are also seeing bumpy trading this month due to higher
volatility and global demand/supply dynamics.
Given this, while many ETFs have seen terrible trading so far in
the month, some ETFs have managed to stay in the green in the
current turbulence. Below, we have highlighted three ETFs that
stood out in the early days of April and will likely to continue to
do so as we move ahead in Q2.
First Trust ISE-Revere Natural Gas Index Fund (
This ETF offers exposure to the U.S. stocks that derive a
substantial portion of their revenues from the exploration and
production of natural gas. It follows ISE-REVERE Natural Gas Index
and holds 30 stocks in its basket, which are well spread out across
a single component (read:
3 Energy ETFs Marching Higher in the Past Week
Stone Energy, Goodrich Petroleum and Penn Virginia occupy the top
three positions in the portfolio with nearly 4% of total assets
each. The fund has a blended style and is also diversified across
various market cap levels with 45% in large caps, 37% in small caps
and the rest in mid caps.
The fund has amassed $470.1 million in its asset base while sees
solid volume of nearly 509,000 shares per day. Expense ratio came
in at 60 bps. FCG has gained about 20% so far in Q2.
QuantShares U.S. Market Neutral Value Fund (
This ETF uses a slightly active approach and offers investors
spread return between high and low ranked stocks. This is easily
done by tracking the Dow Jones U.S. Thematic Market Neutral Value
Index, which takes long position in the undervalued stocks and
short position in the overvalued stocks in equal weights and equal
dollar amount within each sector.
This approach results in a value tilt for this product, and long
and short positions in 400 stocks, divided equally. Due to this
unique feature and active management, the fund charges higher
annual fee of 1.49% from investors (see:
all Long-Short ETFs here
CHEP failed to attract investors as depicted by its AUM of just
$1.4 million and average daily volume of 9,000 shares. However, it
has added about 2.80% so far this month.
iShares Residential Real Estate Capped ETF (
This fund follows the FTSE NAREIT All Residential Capped Index and
provides exposure to the U.S. residential real estate stocks and
real estate investment trusts (REITs). Holding 34 securities in its
basket, the product is largely concentrated on the top firm -
Public Storage (
) - at 11% while Equity Residential (
) and Ventas (
) round off to the next two with combined 18.2% share.
More than half of the portfolio is tilted toward large caps and
about three-fifths to value stocks. From a sector look, equity
apartment takes the top spot with 41.6%, followed by equity
healthcare (37.8%) and equity self storage (17.2%).
The product has amassed $251.1 million in AUM while trades in
volume of under 50,000 shares a day. It charges 48 bps in fees per
year and is up 2.40% month-to-date.
SPDR S&P Metals & Mining ETF (
This ETF looks to give investors broad exposure to the metal and
mining industry, holding 41 stocks in its basket. This is
accomplished by tracking the S&P Metals & Mining Select
Industry Index. The fund uses equal weight methodology and does not
put more than 3.7% of assets in single security (read:
A Comprehensive Guide to Mining Industry ETFs
In term of industrial exposure, steel make up 39% of the portfolio,
while diversified metal and mining space (18.4%) and coal &
consumable fuels (18.3%) round out the top three. From a cap look,
the product puts more focus on small cap focus with 59% of assets
while value stocks also dominate the fund portfolio.
XME has $658.5 million in AUM and is liquid with solid trading
volumes of more than 2.3 million shares per day on average. The ETF
charges 35 bps in fees and expenses and added over 2% so far this
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QS-US MN VALUE (CHEP): ETF Research Reports
FT-ISE R NAT GA (FCG): ETF Research Reports
ISHARS-RES RE (REZ): ETF Research Reports
SPDR-SP MET&MIN (XME): ETF Research Reports
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