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Wall Street was in a mayhem in April due to mounting inflationary pressures, rising rate worries and geopolitical tensions in Russia and Ukraine. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000, declined 9.11%, 5.3%, 13.5% and 10.9%, respectively. FAANG stocks plus Microsoft lost $1.4 trillion in market value during April, per a MarketWatch article.
As far as rates are concerned, the benchmark treasury yield started the week at 2.85%, hit a high of 2.93% and then closed the week at 2.90%. Fed Chairman Jerome Powell said the central bank is committed to raising rates “expeditiously” to tame inflation. No only this, the yield curve also inverted to start April.
Against this backdrop, below we highlight a few top-performing ETF areas of last month.
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.
Since a hawkish Fed caused a rally in long-term rates, ETFs that give shelter against rising rates rose. PFIX is one such option. This ETF is active and does not track a benchmark. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income (read: 3 New ETFs to Play Rising Rates).
Russia and Ukraine (two countries involved in the war) are the major exporters of grains. Both countries are major wheat producers. As the conflict shows no signs of easing, Ukrainian farmers are finding it difficult to plant spring crops. Supply chain disruptions are the other concerns. Hence, agricultural commodities have been exhibiting an uptrend (read: Stocks' Worst Start to a Year Since 1942: ETF Areas That Won).
Defensive
US Anti-Beta Fund Market Neutral QuantShares ETF (BTAL - Free Report) – Up 10.2%
The Russia-Ukraine war, high inflation levels, the Federal Reserve’s aggressive stance on rate hikes and China’s zero-Covid policy are keeping investors on the edge, adding to the market gyrations this year. This made defensive funds like BTAL an attractive investment option.
AGFiQ US Market Neutral Anti-Beta Fund has the potential to generate positive returns regardless of the direction of the stock market as long as low-beta stocks outperform high-beta stocks. It invests primarily in the long positions in low-beta U.S. equities and short positions in high-beta U.S. equities on a dollar-neutral basis, within sectors.
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Best ETF Areas of a Brutal April
Wall Street was in a mayhem in April due to mounting inflationary pressures, rising rate worries and geopolitical tensions in Russia and Ukraine. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000, declined 9.11%, 5.3%, 13.5% and 10.9%, respectively. FAANG stocks plus Microsoft lost $1.4 trillion in market value during April, per a MarketWatch article.
As far as rates are concerned, the benchmark treasury yield started the week at 2.85%, hit a high of 2.93% and then closed the week at 2.90%. Fed Chairman Jerome Powell said the central bank is committed to raising rates “expeditiously” to tame inflation. No only this, the yield curve also inverted to start April.
Against this backdrop, below we highlight a few top-performing ETF areas of last month.
Natural Gas
US Natural Gas Fund (UNG - Free Report) – Up 34.4%
iPath.B Natural Gas Subindex ETN – Up 34.3%
US 12 Month Natural Gas (UNL) – Up 32.9%
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.
Rising Rates
Simplify Interest Rate Hedge ETF (PFIX - Free Report) – Up 16.1%
Since a hawkish Fed caused a rally in long-term rates, ETFs that give shelter against rising rates rose. PFIX is one such option. This ETF is active and does not track a benchmark. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income (read: 3 New ETFs to Play Rising Rates).
Agriculture
Teucrium Corn (CORN - Free Report) – Up 15.1%
iPatha.B Grains Subindex TR ETN (JJG) – Up 9.8%
Russia and Ukraine (two countries involved in the war) are the major exporters of grains. Both countries are major wheat producers. As the conflict shows no signs of easing, Ukrainian farmers are finding it difficult to plant spring crops. Supply chain disruptions are the other concerns. Hence, agricultural commodities have been exhibiting an uptrend (read: Stocks' Worst Start to a Year Since 1942: ETF Areas That Won).
Defensive
US Anti-Beta Fund Market Neutral QuantShares ETF (BTAL - Free Report) – Up 10.2%
The Russia-Ukraine war, high inflation levels, the Federal Reserve’s aggressive stance on rate hikes and China’s zero-Covid policy are keeping investors on the edge, adding to the market gyrations this year. This made defensive funds like BTAL an attractive investment option.
AGFiQ US Market Neutral Anti-Beta Fund has the potential to generate positive returns regardless of the direction of the stock market as long as low-beta stocks outperform high-beta stocks. It invests primarily in the long positions in low-beta U.S. equities and short positions in high-beta U.S. equities on a dollar-neutral basis, within sectors.