5 Top & Flop ETF Areas Of Q2
Zacks Investment Research | Jul 03, 2019 01:00AM ET
Wall Street had a moderate second quarter this year with the S&P 500, the Dow Jones and the Nasdaq adding 3.4%, 2.1% and 3.1%, respectively. After an upbeat April and May swoon, Wall Street logged the best June gains in decades.
Trade tensions that caused severe market turmoil in May have probably made the market oversold and cheaper-valued, on which June continued to build up its gains. Dovish Fed comments, chances of a U.S.-China trade truce and likelihood of continuation of OPEC output cut led to this stellar gain.
Against this backdrop, below we highlight a few best-and-worst performing ETFs of June.
Dry Bulk Shipping
BDRY is an actively managed ETF that seeks to provide exposure to daily changes in the price of dry bulk freight futures. Though the freight rate market is not in a good position, there has been slight improvement of late. Breakwave Dry Bulk Shipping ETF (ETFs That Topped & Flopped in Q1 ).
Solar
An announcement from the U.S. trade delegation that a particular type of solar panel is being taken out from the tariff list probably boosted solar stocks in the quarter, per a source . Some of the holdings of the fund TAN — Canadian Solar and Jinko — shot up on the announcement.
Also, there is news that some states, including California, are using solar subsidies to boost the adoption of solar power. California, in fact, mandated 6 Top ETFs of April ).
Greece
The Greek stock market has been on a tear on a recovering economy. There has been a GREK ) was up 19.4%.
Argentina
After the 2018 swoon, Argentina’s stock market rebounded this year. Argentina's central bank’s move to introduce a tighter monetary policy late last year to curtail the peso's slide and curb inflation has started to pay off. A dovish Fed and moderate strength in the greenback are other positives. iShares MSCI Argentina and Global Exposure ETF ( (NYSE:A) ) (up 17.7%) and Global X MSCI Argentina ETF (NYSE:A) (up 17.5%) gained from the trend (read: Top Performing Country ETFs of 1H ).
Gold Mining
Gold had a stellar June (its best month in three years) thanks to dovish Fed comments and a safe-haven rally amid fears of heightened tariff wars and geopolitical tensions. Since mining stocks are leveraged plays of the underlying metal, gold mining stocks went through the roof in the second quarter. iShares MSCI Global Gold Miners ETF (NYSE:GDX) (OL:RING) (up 17.2%) and Sprott Gold Miners ETF SGDM (up 16.2%) are the toppers in this segment.
Flop ETFs
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FAANG stocks suffered in the quarter amid Anti-Trust scrutiny fears. Government regulators are setting the stage for potential antitrust probes into four technology giants, namely Apple (NASDAQ:AAPL) , Facebook (NASDAQ:FB) , Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) . AdvisorShares New Tech And Media ETF FNG (down 21.5%) led the slump.
Inverse Treasury
Amid lower rates, bond yields fell, boosting the price of U.S. Treasury ETFs. Thus, Barclays (LON:BARC) Inverse US Treasury Aggregate ETN TAPR shed about 20.9% in the quarter.
Oil Services
Investors should note that the S&P downgraded Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB) in late May. The news dealt a blow to oil service stocks. "Oilfield services companies will no longer be able to generate the high operating margins they did in 2014," S&P analyst Carin Dehne-Kiley said in the note.
Also, U.S. oil rig count fell to the What Went Wrong With Oil Services ETFs in May? ).
Natural Gas
U.S. natural gas reached its lowest price level Will Natural Gas ETFs Recover in the Near Term? ).
Marijuana
After a rally in the beginning of the year, price of marijuana fell in the second quarter probably on overvaluation concerns. ETFMG Alternative Harvest ETF MJ retreated about 12.4% in the quarter.
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