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3 ETF Areas that Investors Are Following the Most

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Volatility is once again widespread thanks mainly to the December Fed lift-off talks. Faltering global economics, the Fed rate hike fears and the resultant dollar strength started to trouble stocks leading many to fear that the six-year bull-run may be on the verge of a crash.

The expected Fed move sped up the plunge in commodities as well as emerging market currencies, raising questions over the health of the global economy. If this was not enough, never-ending issues with oil prices are there to make the matter worse.

The mood of the Wall Street and some highly vulnerable economies soured, compelling investors to weigh their investing options carefully. So, this may be a good time to look at the investment landscape and find out the ETF areas (as per xtf.com) that investors analyzed the most in the last seven days in anticipation of potential loss or gains.

Income

No wonder, income-generating ETFs would be in focus on the looming Fed policy tightening. At the time of writing, the yield on the 10-year U.S. Treasury note was 2.32% (as of November 10, 2015) which was a multi-week high. This marred the lure for the high-income investing (read: Watch These Income ETFs as Fed Meets ).

As a result, most of the inverse Treasury ETFs including Barclays Inverse U.S. Treasury Aggregate ETN (TAPR) , iPath US Treasury 10-year Bear Exchange Traded Note (DTYS) and iPath US Treasury Long Bond Bear Exchange Traded Note (DLBS) added gains of about 7.6%, 5.6% and 4.3% in the last one week (as of November 11, 2015). On the other hand, the bull Treasury ETF iPath US Treasury 10-year Bull Exchange Traded Note (DTYL) was down 3.7%.

India

India equities and ETFs were closely watched in recent times on the dual impact of a state election and the occasion of Hindu New Year celebrated as Diwali - the 'Festival of Lights'. Investors should note that all events are going wrong for India lately. The major happening that crushed Indian stocks of late was the loss of Prime Minister Narendra Modi's party in the state election in Bihar (read: Visit India ETFs on Diwali ).

The election was viewed as the Indian population's perception of Modi's pro-growth policy reforms - enacted and submitted so far. This loss might halt the reform momentum ahead as analysts now expect to ' see economic policies evolve over the next few months'. This, along with the Fed worries, muddled India ETFs so much that even a pro-business occasion Diwali could not shower gains on some India ETFs.

Large-cap India ETFs including iShares India 50 (INDY) and iShares MSCI India (INDA) lost about 3.5% each. However, small-cap India ETFs still were winners in this somber environment. iShares MSCI India Small Cap Index Fund (SMIN) and EGShares India Small Cap ETF (SCIN) added over 1.2% and 0.6%, respectively.

Financial

Investors pinned hopes on the Financial ETFs for strong returns lately on rate hike speculations. A rising interest rate scenario would be highly profitable for the banking sector. This is because banks borrow money at short-term rates and lend the capital at long-term rates. This benefits the net interest margin earned by banks. Further, U.S. banks now have much stronger balance sheets (read: Financial ETFs in Focus on Rising Rates Buzz ).

Thanks to the widening spread between short and long-dated yields, regional bank ETFs emerged as winners in the recent sessions. SPDR S&P Regional Banking ETF (KRE) is one such gainer. Other financial ETFs that advanced the most in the last one-week frame were First Trust NASDAQ ABA Community Bank ETF (QABA) and PowerShares KBW Regional Bank ETF (KBWR) . All three ETFs gained around 4% each.

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BARCLY-INV USTC (TAPR): ETF Research Reports

IPATH-UST 10YBL (DTYL): ETF Research Reports

SPDR-KBW REG BK (KRE): ETF Research Reports

PWRSH-KBW RBP (KBWR): ETF Research Reports

ISHARS-SP INDIA (INDY): ETF Research Reports

ISHARS-M INDIA (INDA): ETF Research Reports

EMERG-GS INDIA (SCIN): ETF Research Reports

ISHARS-M IND SC (SMIN): ETF Research Reports

FT-NDQ ABA CBIF (QABA): ETF Research Reports

IPATH-UST 10YBR (DTYS): ETF Research Reports

IPATH-UST LB BR (DLBS): ETF Research Reports

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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.


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

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