While the S&P 500 sputtered to a small loss in April, a
month that is historically kind to equities, plenty of ETFs
closed in the green in the fourth month of the year. According to
Finviz data, nearly 600 ETFs rose in the just completed month,
but few notched gains that could be considered noteworthy.
Finding a fair amount of ETFs and ETNs that rose 5% or more in
April was a struggle and the endeavor was made more taxing by
stripping out leveraged and obscure, thinly traded volatility
products. That said, there were some exchange-traded products
that were truly impressive last month and some have the potential
to build on those gains. Some of April's other ETF/ETN winners
provide investors with cautionary tales and are screaming to be
Here are some of April's winners to avoid and embrace.
Market Vectors Vietnam ETF (NYSE:
turned bullish on VNM on February 1, right before
the bandwagon started to become heavily occupied
. Good thing we did. VNM surged over 9% last month and it's
year-to-date gain of more than 43% has all but wiped out all of
the ETF's 2011 losses, indicating that once in a while, ETFs do
rise faster than they fall.
The International Monetary Fund has forecast Vietnamese GDP
growth of 5.6% this year and 6.3% in 2013 and investors can tap
into that growth with VNM, one of just a few frontier market ETFs
on the market today, at a reasonable valuation.
VNM trades at 9.7 times forward earnings and 1.05 times book
value. That's while the emerging markets on average trade at 11.1
times forward earnings and 1.47 times book
Investor's Business Daily reported, citing
iPath DJ-UBS Natural Gas TR Sub-Index ETN (NYSE:
Avoid. The controversial GAZ gained 8.95% in April, a run that
was better than double the move in natural gas futures and well
ahead of the gain posted by the U.S. Natural Gas Fund (NYSE:
). Continued bullishness in natural gas can be played with UNG or
other, safer exchange-traded products
The commodity's rise is, in theory, good for GAZ, but it could
also mean the ETN continues trading at prices that are well above
its indicative value making it vulnerable to
intense short-selling in the future
iPath Global Carbon ETN (NYSE:
Avoid. GRN's almost 8% April gain may look compelling, but as we
noted on Monday, this ETN doesn't trade much. There were multiple
days during April when GRN did not trade at all and if an ETN can
move up 8% on anemic volume, imagine how few shares it would take
to hammer this thing down by 8%-10%.
iShares Asia/Pacific Dividend 30 Index Fund (
Embrace. Another Asia-Pacific fund makes the list, but this one
is decidedly more developed markets in its bias. An almost 11.2%
allocation to China is the only pure emerging markets exposure in
the newly minted DVYA, which debuted in late February.
Australia, Singapore and Hong Kong,
three members of the CASSH acronym
, combine for about 71% of DVYA's weight while New Zealand and
Japan follow China for the remaining country weights.
Staples and telecom names combine for over 37% of DVYA's
weight, so there's one trait conservative investors will like.
The other: a 30-day SEC yield of 4.82%, according to iShares
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