Best and Worst ETF Performers of March - ETF News And Commentary

March was an extremely volatile month for the U.S. equity markets. The S&P 500 added 0.4% while Dow Jones Industrial Average lost 0.3%. The tech-heavy Nasdaq Composite index crossed the 5,000 mark for the first time in early March since the 2000 dot-com bubble, and gained 3.5% during the month.

While the merger and acquisition frenzy, an improving U.S. economy, and a solid labor market drove the U.S. stocks higher, an uncertain timing of interest rate hike, strong dollar, geopolitical tensions and lofty valuations kept the returns at check. More recently, the Fed's commitment to the slower-than-expected interest rate hike sparked a rally in the stocks. But, the central bank's caution on moderate economic growth and lower inflation pulled back the gains yet again.

Meanwhile, commodities' performance has been weak with a host of agricultural products and industrial metals slumping on weak global trends. Additionally, a strong dollar, lower oil prices , a supply glut, and bumper crop dulled the appeal for the commodities.

With that being said, we have highlighted the two best and worst ETF performers of last month.

Best ETFs

Guggenheim Solar ETF ( TAN )

Being a high growth and high beta sector, solar stocks have been the major victim of oil price collapse over the past several months. However, it made an impressive comeback in March thanks to some respite to the falling oil prices, robust panel installations, surging demand for solar power, and Obama's 'Climate Change Action Plan' (read: Obama Budget Plan Drives Up These Sector ETFs ).

Though both solar ETFs generated handsome returns last month, TAN surged 12.5%. It tracks the MAC Global Solar Energy Index, holding 29 stocks in the basket. The ETF is highly concentrated on the top firm - Hanergy Thin Film Power - at 12.1% share while other firms hold less than 8.30% of total assets. American firms dominate the fund's portfolio with nearly 47%, closely followed by China (22.9%) and Hong Kong (21.0%).

The fund has amassed $362 million in its asset base and charges investors 71 bps in fees per year. Volume is good as it exchanges more than 231,000 shares in hand on a daily basis. The product has a Zacks ETF Rank of 4 or 'Sell' rating with a High risk outlook.

BioShares Biotechnology Clinical Trials Fund ( BBC )

Biotech continued its last year's stellar performance and is once again leading the broad health care world and the broader market from the year-to-date look. The industry is clearly benefiting from promising drug launches, cost-cutting efforts, an aging population, insatiable demand for new drugs, ever-increasing healthcare spending, expansion into emerging markets, and the Affordable Care Act or Obamacare.

Among the biotech ETFs, the brand new BBC - which is less than four months old - has been the top performer, gaining 5.8% last month. It has a novel approach to biotechnology investing as it provides exposure to the companies that have a primary product in Phase I, II, or III of FDA trials by tracking the LifeSci Biotechnology Clinical Trials Index. Holding 68 stocks in its basket, the fund is slightly tilted toward the top two firms - Auspex Pharmaceuticals ( ASPX ) and Ziopharm Oncology ( ZIOP ) - with 4.5% and 3.2%, respectively. Other firms hold no more than 2.90% of assets.

The fund has accumulated $20.3 million since its debut but has a higher charge of 85 bps per year. It trades in volume of 31,000 shares a day (read: SBIO Vs. BBC: 2 Innovative Biotech ETFs Head-To-Head ).

Worst ETFs

iPath Pure Beta Sugar ETN ( SGAR )

Sugar prices have been sliding on excessive supplies and tepid demand. The global sugar supply is expected to outpace demand for the fifth year in a row, according to the International Sugar Organization. Rising cane harvest and higher stockpiles are adding to the global glut of the sweetener.

Given this, SGAR dropped 13.8% last month. This note seeks to match the performance of the Barclays Sugar Pure Beta Total Return Index. Unlike many commodity indexes, this product can roll into one of a number of futures contracts with varying expiration dates, as selected, by using the Barclays Pure Beta Series 2 Methodology (see: all Agricultural ETFs here ).

This approach might result in less contango, which could prove crucial, as shifting from month to month in contracts can eat away returns during an unfavorable market situation. The note is illiquid with a paltry volume of under 1,000 shares and unpopular with AUM of just $0.7 million. Expense ratio came in at 0.75%.

iShares MSCI Global Gold Miners ETF ( RING )

The worst performer of March in the stock world is definitely the mining world, in particular gold and silver miners. Due to plunging metal prices and unfavorable market conditions, miners faced a rough month. Acting as a leveraged play on underlying metal prices, metal miners tend to experience huge losses than their bullion cousins in the slumping metal market.

While all gold miner ETFs lost in double digits last month, RING was the biggest loser with 15.6% decline in value. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 32 securities in its portfolio. The product is heavily concentrated on the top three firms - Goldcorp ( GG ), Barrick Gold ( ABX ) and Newmont Mining ( NEM ) - which combine to make up 37.7% of total assets (read: Gold Mining ETFs: What's Behind the Extremely Bearish Trend? ).

Canadian firms take the lion's share at 55.3%, though South Africa (12.2%) and the U.S. (11.8%) round out the top three. RING is the cheapest choice in the gold mining space, charging just 0.39% in fees and expenses. The fund has been able to manage assets worth $57 million while it trades in good volume of more than 93,000 shares.

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GUGG-SOLAR (TAN): ETF Research Reports

BIOSH-BIO CLNCL (BBC): ETF Research Reports

IPATH-PB SUGAR (SGAR): ETF Research Reports

ISHARS-M GL GLD (RING): ETF Research Reports

NEWMONT MINING (NEM): Free Stock Analysis Report

GOLDCORP INC (GG): Free Stock Analysis Report

BARRICK GOLD CP (ABX): Free Stock Analysis Report


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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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