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Top ETF Stories of September

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The third quarter of 2015 was utterly downbeat for the broader U.S. market as well as the global indices with the China-led rout surfacing in August and spilling over into September. Not only global growth worries but also high speculation of a Fed lift-off has made the month of September the most-watched one so far this year.

In any case, according to the Stock Trader's Almanac , September ended in red 55% of the times while S&P Dow Jones Indices indicated an average fall of 1.03% return over the last 87 years in September. As a result, after a worldwide investing massacre in August, the investing cohort must be keen to know the top financial stories of September and check their impact on the ETF world.

Still a Dovish Fed

Turning loads of hearsays off, the Fed remained supportive in its most talked-about September meeting. A dreaded uproar in the global investing backdrop in August led by the Chinese market crash, swooning commodities and their shockwaves on other emerging economies held the Fed back from switching on the lift-off button this September. Muted inflation and a still-strong greenback were also other forces to inhibit the Fed from policy tightening.

As the Fed stayed put, some big moves in various markets and asset classes were prompted. Though the Fed has kept the option for a 2015 hike still alive, a small section of policymakers and traders have started to bet that the rates may not be hiked before 2016 (read: 6 ETFs to Watch in September ).

Whatever the case, financial ETFs like SPDR S&P Regional Banking ETF (KRE) and iShares Broker Dealer ETF (IAI) and U.S. dollar ETF PowerShares DB US Dollar Bullish Fund ( UUP ) were the foremost losers post Fed meeting. UUP shed 0.04%, KRE lost 1.1% and IAI was off 6.4% in the month.

However, there were plenty of gainers too. Long-term Treasury bond ETFs like Vanguard Extended Duration Treasury ETF ( EDV ), high-yield m-REIT ETFs like iShares FTSE NAREIT Mortgage Plus Capped Index Fund (REM)and gold-related ETFs likeSPDR Gold Shares ( GLD ) and Market Vectors Gold Miners ETF ( GDX ) added gains post meeting.

Overall, EDV was up over 1.5% in the month but other products could not hold on to gains. REM was off 4.2% while GLD and GDX shed 0.45% and 5.6% in the month (as of September 28, 2015).

Biotech Meltdown

If China made August infamous, biotech did the same for September. Pricing issues in the biotech space has long been a concern but came into the limelight in September following a tweet by the Democratic presidential candidate Hillary Clinton (read: Guide to Inverse & Leveraged Biotech ETF Investing ).

Her tweet raised concerns on over pricing on life-saving drugs at the end of the month. Questions over biotech pricing came on the heels of a 5,455% price hike (in about two months) of a drug called Daraprim, used to treat malaria and toxoplasmosis. This gigantic leap in pricing action was taken by a privately held biotech company Turing Pharmaceuticals (read: How Hillary Clinton Crushed Biotech ETFs with One Tweet ).

Not only Turing Pharmaceuticals, Valeant Pharmaceuticals International Inc. ( VRX ) is also likely to be summoned by Democrats on the House oversight committee for hiking 525% and 212% prices for two heart drugs. The talks pulled VRX shares down by 16.5% on September 28 and hit all biotech ETFs.

In fact, growing pains for biotech investing led the biggest related ETF iShares Nasdaq Biotechnology ( IBB ) to incur the largest weekly loss in seven years. IBB was down over 15% in the last one month while ETFs like SPDR S&P Biotech ETF (XBI),Medical Breakthroughs ETF (SBIO) and BioShares Biotechnology Clinical Trials Fund (BBC) were off 15.4%, 16.5% and 15%, respectively.

Volkswagen Scandal

This dealt quite a blow to the entire auto industry. The iconic German carmaker Volkswagen AG ( VLKAY ) has been accused of tricking on the Environmental Protection Agency (EPA) test. Per EPA, Volkswagen had set up a software algorithm which allowed it to mislead U.S. emissions tests and the carmaker has admitted the charge.

This immediately weighed on the key auto industry of Germany as other automakers have also been hit. Germany ETFs like iShares MSCI Germany ETF ( EWG ), Recon Capital DAX Germany ETF ( DAX ), Germany AlphaDEX Fund ( FGM ) and db X-trackers MSCI Germany Hedged Equity Fund ( DBGR ) were hit hard on this car scandal and registered a steep retreat in the month. The funds were off over 6.6%, 6.5%, 6.4% and 5.15 respectively in September (read: Europe ETFs That Hit 52-Week Lows on Volkswagen Scandal ).

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

ISHARS-US BR-D (IAI): ETF Research Reports

VOLKSWAGEN-ADR (VLKAY): Free Stock Analysis Report

ISHARS-GERMANY (EWG): ETF Research Reports

ISHARES NDQ BIO (IBB): ETF Research Reports

SPDR-SP BIOTECH (XBI): ETF Research Reports

VALEANT PHARMA (VRX): Free Stock Analysis Report

VANGD-EX DUR TR (EDV): ETF Research Reports

ISHARS-MTG RE (REM): ETF Research Reports

MKT VEC-GOLD MI (GDX): ETF Research Reports

ALPS-MED BRKTH (SBIO): ETF Research Reports

BIOSH-BIO CLNCL (BBC): ETF Research Reports

DOMINION RES VA (D): 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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