Best and Worst Performing ETFs of Last Week
Wall Street recorded back-to-back weekly gains on optimism around U.S.-China trade relations. The world’s two largest superpowers are expected to resume trade talks next month and this could deescalate the year-long dispute. Notably, the Dow Jones and the S&P 500 gained at least 1.5% last week while the Nasdaq Composite Index advanced 1.8% (read: 5 High-Beta ETFs to Buy on Trade Talk Hopes).
Additionally, fresh round of stimulus from China renewed investors’ confidence in riskier assets. The People’s Bank of China plans to cut the amount of cash that banks must hold as reserves to the lowest level since 2007, injecting liquidity into the economy. The move is expected to free up as much as $126 billion for loans, with the first round of reserve cuts taking effect Sep 16.
Further, weak jobs data bolstered the case for a rate cut later this month that will drive stocks higher. The U.S. economy added 130,000 jobs in August, below the MarketWatch expectation of 173,000 and down from the 159,000 jobs added in July. The unemployment rate remained steady at 3.7%, while average hourly earnings rose 0.4% month over month and 3.2% year over year. Market expectations for a 25 basis-point rate cut are at 91.2%, according the CME Group’s FedWatch tool. Expectation that European Central Bank (ECB) would also cut interest rates this month buoyed market confidence.
Given this, we have highlighted last week’s best and worst performing ETFs:
Global X MSCI China Information Technology ETF CHIK
Chinese stocks led the way higher on the dual news of trade hopes and the central bank’s stimulus package. CHIK emerged as the biggest winner, climbing 8.5% last week. This fund offers exposure to the information technology sector of China market by tracking the MSCI China Information Technology 10/50 Index. It holds 47 stocks in its basket with modest concentration on the top five firms. This fund has accumulated $1.7 million in its asset base and trades in a light average daily volume of 3,000 shares. It charges 65 bps in annual fees.
The Cannabis ETF THCX
This ETF offers investors exposure to a basket of stocks that are expected to benefit from growth of the hemp and legal marijuana industries. Holding 36 stocks in the basket, it is moderately concentrated on the top firms. The fund has amassed about $20.9 million in AUM and trades in good volume of about 72,000 shares per day on average. It charges 70 bps in annual fees and gained 8.1% last week (read: Worst Sector ETFs of August).
iShares MSCI New Zealand ETF ENZL
New Zealand's benchmark S&P/NZX 50 index closed at a record high last week, logging its biggest weekly gain in more than 10 years. ENZL tracks the MSCI New Zealand IMI 25/50 Index. It holds 27 stocks in its basket with heavy concentration on the top four firms. The ETF has amassed $174 million in in its asset base and trades in average daily volume of 50,000 shares. It climbed 6.5% last week and has a Zacks ETF Rank #3 (Hold) with a Low risk outlook.
iPath Series B S&P 500 VIX Short-Term Futures ETN VXX
Volatility took the back seat last week on a spate of positive news flow. As such, volatility products are the biggest losers with VXX stealing the show and shedding 8.4%. This is a popular option providing exposure to volatility that sees a truly impressive average volume of about 26 million shares a day. The note has amassed $749.8 million in AUM and charges 89 bps in fees per year. The ETN focuses on the S&P 500 VIX Short-Term Futures Index, which reflects implied volatility in the S&P 500 Index at various points along the volatility forward curve. It provides investors with exposure to a daily rolling long position in the first and second months of VIX futures contracts (read: ETF Strategies to Follow as Volatility Seems Underpriced).
iShares MSCI Global Gold Miners ETF RING
Gold lost its sheen last week on bullishness in the stock market and ebbing trade tensions. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more losses than their bullion cousins in a rising metal market. While most of the ETFs lost last week, RING sheds 5.4%. This ETF follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. Canadian firms take half of the portfolio, while United States, Australia and South Africa round out the top four with double-digit exposure each. RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. The fund has been able to manage assets worth $319.4 million and trades in a good volume of 223,000 shares per day (read: 5 Gold Mining ETFs & Stocks Shining in August).
ETFMG Prime Junior Silver ETF SILJ
Silver also took a beating due to its lost appeal for the metal as a store of wealth and an alternative investment to risky assets during economic and political uncertainty. SILJ provides direct exposure to the silver mining exploration and production industry by tracking the Prime Junior Silver Miners & Explorers Index. It holds 32 stocks in its basket with higher concentration on the top four firms. Canadian firms take the lion’s share at 67.9%, while the United States, Peru and Brazil take the remainder. The fund has managed assets worth $108 million and trades in good volume of nearly 236,000 shares a day. It charges 69 bps in annual fees and was down 5% last week (read: Why Silver ETFs are Outshining Gold).
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iShares MSCI Global Gold Miners ETF (RING): ETF Research Reports
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX): ETF Research Reports
iShares MSCI New Zealand ETF (ENZL): ETF Research Reports
The Cannabis ETF (THCX): ETF Research Reports
Global X MSCI China Information Technology ETF (CHIK): ETF Research Reports
ETFMG Prime Junior Silver ETF (SILJ): ETF Research Reports
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