Best and Worst ETFs of July: Emerging Markets Soar, Commodities Fall - ETF News And Commentary

By Zacks Equity Research,

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The summer slowdown happened right on schedule for the stock market in the month of July with the S&P 500 declining the most on the last day of the month since April. The index also recorded its first monthly drop since January thanks to rising rate concerns and overvaluation worries in some corners of the market. The S&P 500 retreated about 2% in the month. 

Not only this, things remain lackluster in the global market as well.  A debt default in Argentina, escalating tensions in Russia, banking woes in Portugal - all dominated the headlines throughout the month. Amid such a scenario, let's take a look at some top and worst performing ETFs of last month to see where the momentum is (and isn't) in the market now (read: Top ETF Stories of July ).

ETF Winners of July

Market Vectors Indonesia Small-Cap ETF ( IDXJ )

This Indonesia ETF has been on a tear for quite some time now on election hopes. The election of the market-friendly politician Joko Widodo as the president of the nation took the market to a new high.

While all ETFs focused on Indonesia posted solid gains, IDXJ emerged as a clear winner surging more than 15% last month as the fund is made of small-cap equities and is more domestically focused (read: Indonesia ETFs in Focus Ahead of Elections ).

INDXX China Infrastructure Index Fund ( CHXX )   

Though concerns over the Chinese economy heightened at the beginning of 2014, things have started to stabilize of late. A mini-stimulus measure aimed at railways and other construction investment as well as tax relief for small enterprises seemed to have acted in favor of the Chinese infrastructure sector. As a result, CHXX - the China infrastructure fund - added about 14% last month.  

iShares MSCI Qatar Capped ETF ( QAT )

Yet another country ETF that surged last month was that of Qatar. Strong corporate earnings and a recent upgrade of Qatar to the emerging market level from the frontier market by the global index compiler MSCI triggered the nation's stock market with QAT gaining about 1.3% in July (read: 3 Country ETFs Taking Flight in H2 ). 

ETF Losers of July

iPath Dow Jones-UBS Natural Gas ETN ( GAZ )

Natural gas ETFs had a dreadful spell last month thanks to a higher-than-expected stockpile concern. In fact, in mid July, natural gas prices declined to the 7-month low level. A 13-year seasonal low level in power plant production also caused considerable disturbance in the natural gas prices, as per Bloomberg

EIA noted that natural gas inventories - which plunged to the 11-year lows this March thanks to a harsh winter and geo-political concerns in energy-rich Russia - have sprung back at the best clip since 2001. This caused GAZ to lose over 15% last month and become the worst performer of the month.

Teucrium Corn Fund ( CORN )

Agricultural commodities also had a wild ride this year with the latest trend being that of a steep decline. Among the bunch, corn futures appear hard hit. Notably, corn is one of the most important U.S. crops.

Favorable weather conditions and an upbeat harvest outlook basically led U.S. corn futures to dire trading. Thanks to higher stockpiles, CORN shed about 15% in July (read: 3 Agricultural Commodity ETFs Slumping in July ).

iPath Dow Jones-UBS Cotton ETN ( BAL )

Here also, supply glut was the enemy of cotton prices. Prices slipped to the lowest levels in two years last month on expectations of a plenteous U.S. crop production.

If the oversupply situation was not enough, the reduced import demand from China - one of the key consuming nations - pushed the commodity into a bear market. Increased usage of low-priced fabric like polyester also dented cotton demand. As a result, BAL lost about 13% last month (read: Cotton ETFs in Focus as Crash Continues

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IPATH-DJ-A COTN (BAL): ETF Research Reports

MKT VEC-INDO SC (IDXJ): ETF Research Reports

IPATH-DJ-A NGAS (GAZ): ETF Research Reports

TEUCRM-CORN FD (CORN): ETF Research Reports

EMERG-GS CHINA (CHXX): ETF Research Reports

ISHARS-MS QATAR (QAT): ETF Research Reports

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Zacks Investment Research

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing ETFs
Referenced Stocks: BAL , IDXJ , GAZ , CORN , CHXX

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