Top And Flop ETF Areas Of August

The July upsurge in the key U.S. indexes wavered to start August as stocks slipped mainly on renewed U.S.-China trade tension. Also, the Fed’s less-hawkish guidance on monetary policy released at July-end triggered a broader market rout to start August (read: on Sep 1 and Dec 15 , the announcement prompted China to counteract.

After markets closed in the United States on Aug 23, Trump said, “he would raise tariffs on $250 billion in Chinese exports to Consumer ETFs in Focus on Fresh Tariff Threats ).

Apart from trade tensions, the month saw a host of global stimulus from various central banks and a bond market rally. Overall, the global stock markets remained edgy. SPDR S&P 500 ETF (NYSE:SPY) (ASX:SPY) (down 4.2%), SPDR Dow Jones Industrial Average (NYSE:DIA) ETF (TSXV:DIA) (down 4.3%) and Invesco QQQ Trust QQQ (down 4.9%) — all lost heavily in the past month (as of Aug 28, 2019).

Against this backdrop, below we highlight a few winning and losing ETF areas of the month.

Toppers

Volatility

Hostility in terms of tariff caused a bloodbath in Wall Street and volatility levels spiked. VelocityShares 1x Long VSTOXX Futures ETN (NYSE:EVI) (up 32.6%), iPath Series B S&P 500 VIX Short-Term Futures ETN Volatility ETFs Jump on Fresh Trade Tensions & Growth Worries ).

U.S. Treasury

Thanks to the market turmoil and the safe-haven rally, yields on the 10-year U.S. treasuries fell drastically in the month. As of Aug 28, the benchmark yield was 1.47%, down from 1.90% seen at the start of the month. This has led to a spike in the long-term bond prices and ETFs like PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (ZROZ ) (up 20.2%) and Vanguard Extended Duration Treasury Index Fund ETF Shares (TSX:EDV) (up 17.9%) benefited greatly.

Precious Metal Miners

Since tariff-related moves and countermoves have shaken the investment world, investors sought safety in the safe-haven asset gold. Also, several global central banks cut rates in recent times, which favored the non-interest-bearing assets like precious metals. Needless to say, the precious metal rally boosted gold and silver-mining ETFs like iShares MSCI Global Gold Miners ETF (NYSE:GDX) (OL:RING) (up 14.2%) and ETFMG Prime Junior Silver ETF Precious Metal ETFs Gain From Tit-for-Tat Tariff Action ).

Losers

Energy

Global growth worries weighed on the demand outlook of oil prices. United States Oil Fund (NYSE:USO), LP IEZ lost about 22.3% each in the past month.

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Steel Producer

VanEck Vectors Steel ETF (ASX:SLX) lost about 19.3% in the past month. The underlying NYSE Arca Steel Index tracks the overall performance of companies involved in the steel sector. Per a Citigroup (NYSE:C) analyst, “benefits from the Trump administration’s tariffs on foreign steel imports have diminished and demand has been disappointing,” as quoted on Bloomberg .

Copper Miner

U.S.-China trade tensions have been playing foul on the demand for copper. This is because China is a huge consumer of copper. Any slowdown in China could disrupt the copper-producing industry.Global X Copper Miners ETF (COPX ) lost 18.6% in the past month.

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