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Wall Street was downbeat last week with the S&P 500 (down 1.3%), the Dow Jones (down 0.3%), the Nasdaq Composite (down 3.9%) and the Russell 2000 (down 4.6%) seeing massive loses. This happened on the likelihood of faster monetary policy tightening by the Federal Reserve.
St. Louis Fed President James Bullard said that he seeks rising rates by 3% to 3.25% in the second half of 2022, while Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral. As a result, bond yields rose. The benchmark U.S. treasury yield jumped to 2.72% on Apr 8, 2022 from 2.42% recorded at the start of the week.
Last week’s data showed applications for U.S. state unemployment insurance dropped more than forecast, supporting the Fed’s argument that the economy is strong enough to endure faster rate increases. Growth stocks that underperform in a rising rate environment slumped heavily on such cues.
Against this backdrop, below we highlight a few top-performing ETF areas of last week.
Natural gas futures spiked to a fresh 13-year high on tight supply conditions, adverse weather conditions and declining inventories. With this, natural gas is up 65% so far this year. The jump in prices came as the conflict between Russia and Ukraine has sparked fears of global supply disruption in an already tight-supply market. Western countries have slapped severe sanctions against Russia over Ukraine that has disrupted trade flows. Sanctions by the United States and other countries will force Russia to supply less natural gas, thereby pushing prices higher (read: Tap Soaring Natural Gas With These ETFs).
Uranium Mining
Northshore Global Uranium Mining ETF (URNM - Free Report) – Up 10.6%
“The fear of Russian nuclear fuel supplies being cut off in the West (especially the US and European Union) has led buyers to enter the spot uranium market over the past two weeks,” said Jonathan Hinze, president of UxC, as quoted on mining.com.
North Shore Global Uranium Mining ETF provides exposure to companies involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee.
Rising Rates ETF
Advocate Rising Rate Hedge ETF – Up 10.3%
Since a hawkish Fed caused a rally in long-term rates, ETFs that gives shelter against rising rates rose. RRH is one such option. The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.
China Real Estate
Global X MSCI China Real Estate ETF – Up 9.8%
The Chinese government’s pledge of support for beleaguered developers stirred a feverish rush for real estate stocks. The cheap valuation also supported the rally. The Global X MSCI China Real Estate ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI China Real Estate 10/50 Index. The fund charges 66 bps in fees.
It is important to note that Russia stands as the largest wheat exporter. Ukraine also occupies a spot among the four major wheat exporters (according to JPMorgan). Bank of America states that Russia is responsible for 17% and Ukraine for 12% of the 207-million-ton international wheat trade. Hence, the war has boosted the price of wheat.
The WHEAT FUTURES looks to reflect the daily changes of a weighted average of the closing prices for 3 futures contracts for wheat that are traded on the CBOT : the second-to-expire contract, the third-to-expire contract and the contract expiring in the Dec. following the expiration month of the third-to-expire contract. The expense ratio of WEAT is 1.91%.
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Top-Performing ETF Areas of Last Week
Wall Street was downbeat last week with the S&P 500 (down 1.3%), the Dow Jones (down 0.3%), the Nasdaq Composite (down 3.9%) and the Russell 2000 (down 4.6%) seeing massive loses. This happened on the likelihood of faster monetary policy tightening by the Federal Reserve.
St. Louis Fed President James Bullard said that he seeks rising rates by 3% to 3.25% in the second half of 2022, while Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral. As a result, bond yields rose. The benchmark U.S. treasury yield jumped to 2.72% on Apr 8, 2022 from 2.42% recorded at the start of the week.
Last week’s data showed applications for U.S. state unemployment insurance dropped more than forecast, supporting the Fed’s argument that the economy is strong enough to endure faster rate increases. Growth stocks that underperform in a rising rate environment slumped heavily on such cues.
Against this backdrop, below we highlight a few top-performing ETF areas of last week.
Natural Gas
US 12 Month Natural Gas (UNL - Free Report) – Up 11%
US Natural Gas Fund (UNG) – Up 10.9%
iPath.B Natural Gas Subindex ETN – Up 10.8%
Natural gas futures spiked to a fresh 13-year high on tight supply conditions, adverse weather conditions and declining inventories. With this, natural gas is up 65% so far this year. The jump in prices came as the conflict between Russia and Ukraine has sparked fears of global supply disruption in an already tight-supply market. Western countries have slapped severe sanctions against Russia over Ukraine that has disrupted trade flows. Sanctions by the United States and other countries will force Russia to supply less natural gas, thereby pushing prices higher (read: Tap Soaring Natural Gas With These ETFs).
Uranium Mining
Northshore Global Uranium Mining ETF (URNM - Free Report) – Up 10.6%
“The fear of Russian nuclear fuel supplies being cut off in the West (especially the US and European Union) has led buyers to enter the spot uranium market over the past two weeks,” said Jonathan Hinze, president of UxC, as quoted on mining.com.
North Shore Global Uranium Mining ETF provides exposure to companies involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee.
Rising Rates ETF
Advocate Rising Rate Hedge ETF – Up 10.3%
Since a hawkish Fed caused a rally in long-term rates, ETFs that gives shelter against rising rates rose. RRH is one such option. The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.
China Real Estate
Global X MSCI China Real Estate ETF – Up 9.8%
The Chinese government’s pledge of support for beleaguered developers stirred a feverish rush for real estate stocks. The cheap valuation also supported the rally. The Global X MSCI China Real Estate ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI China Real Estate 10/50 Index. The fund charges 66 bps in fees.
Wheat
Teucrium Wheat (WEAT - Free Report) – Up 8.7%
It is important to note that Russia stands as the largest wheat exporter. Ukraine also occupies a spot among the four major wheat exporters (according to JPMorgan). Bank of America states that Russia is responsible for 17% and Ukraine for 12% of the 207-million-ton international wheat trade. Hence, the war has boosted the price of wheat.
The WHEAT FUTURES looks to reflect the daily changes of a weighted average of the closing prices for 3 futures contracts for wheat that are traded on the CBOT : the second-to-expire contract, the third-to-expire contract and the contract expiring in the Dec. following the expiration month of the third-to-expire contract. The expense ratio of WEAT is 1.91%.