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August was an average-to-downbeat month for investors, mainly due to rising rates. A cooling U.S. economy, falling consumer confidence, a series of bank downgrades also made matters worse for Wall Street. The S&P 500 has added 0.3% past month, the Nasdaq is up 0.4%, the Dow Jones has lost 0.9% and the Russell 2000 has slumped about 3% (as of Aug 30, 2023).
Against this backdrop, below we highlight a few winning and losing ETFs of August.
Growing energy concerns and the increasing need for dependable and eco-friendly energy sources are also fueling the surge in uranium ETF. The ability of nuclear power to cut carbon emissions has brought it back in the public eye (read: Use Uranium ETFs to Power Your Investment Strategy).
AXS Short Innovation Daily ETF (SARK - Free Report) – Up 13.4%
There have been bearish sentiments around next-gen Internet, electric vehicles, genomics, fintech as many believed initially that the valuations are stretched and rising rates could hurt them further. Hence, the bear ETF on this concept – SARK – gained in August.
Turkey's central bank made headlines on Thursday with an unexpected interest rate hike to 25%, a significant jump from the previous rate of 17.5%. The move surprised economists who had anticipated a more modest increase to around 20%. The rate hike is a clear indication that Turkey is committed to curbing inflation through proactive monetary policy measures. The move was welcomed by investors (read: Time to Buy Turkey ETF on Surprise Rate Hike?).
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. With rising rate worries currently doing rounds, the fund has every reason to surge (read: Best ETFs of Last Week).
Raw sugar futures surged to a one-month high amid risks to supply for the key producer. Mounting concerns about impending drought conditions linked to the onset of El Nino are casting a shadow over the output in the key-growing region — India. This has sparked worries that the second-largest global exporter might impose restrictions on international sales during the forthcoming 2023/24 season, per tradingeconomics.
It has been a lackluster month for cryptocurrency as the flight-to-safety totally marred this risky investing in the initial and middle part of August. However, the appreciation of Bitcoin resulting from a U.S. court's favorable decision, bolstered the potential for retail investor-friendly funds, at the end of the month (read: 5 Favorable Events Bitcoin Had in 2023: ETFs in Focus).
Roundhill MEME ETF ) – Down 15.3%
The underlying Solactive Roundhill Meme Stock Index consists of 25 equal-weighted U.S.-listed equity securities that exhibit a combination of elevated social media activity and high short interest. Risk-off trade sentiments did not favor shares of the struggling companies that commonly emerge as meme stocks.
The AdvisorShares Psychedelics ETF is actively managed and seeks long-term capital appreciation by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenues from or devote 50% of their assets to psychedelic drugs. The theme failed to secure investor interest in an otherwise choppy month like August 2023.
Rising rate worries hurt the high-growth investing areas in August. Hence, the underlying Indxx Global CleanTech Index of CTEC, which provides exposure to companies adopting technologies focused on improving the efficiency of renewable energy production & mitigating the adverse environmental effects of resource consumption, was hurt badly.
Wheat futures dropped, resembling November 2020 levels in late August. This happened due to strong supply signals and predictions of weak demand. Russia is also increasing grain shipments this year due to improved weather during the late harvest, countering previous worries of Siberian dryness and boosting production.
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Top & Flop ETFs of August
August was an average-to-downbeat month for investors, mainly due to rising rates. A cooling U.S. economy, falling consumer confidence, a series of bank downgrades also made matters worse for Wall Street. The S&P 500 has added 0.3% past month, the Nasdaq is up 0.4%, the Dow Jones has lost 0.9% and the Russell 2000 has slumped about 3% (as of Aug 30, 2023).
Against this backdrop, below we highlight a few winning and losing ETFs of August.
Gainers
Sprott Junior Uranium Miners ETF (URNJ - Free Report) – Up 15.8%
Growing energy concerns and the increasing need for dependable and eco-friendly energy sources are also fueling the surge in uranium ETF. The ability of nuclear power to cut carbon emissions has brought it back in the public eye (read: Use Uranium ETFs to Power Your Investment Strategy).
AXS Short Innovation Daily ETF (SARK - Free Report) – Up 13.4%
There have been bearish sentiments around next-gen Internet, electric vehicles, genomics, fintech as many believed initially that the valuations are stretched and rising rates could hurt them further. Hence, the bear ETF on this concept – SARK – gained in August.
iShares MSCI Turkey ETF (TUR - Free Report) – Up 13.3%
Turkey's central bank made headlines on Thursday with an unexpected interest rate hike to 25%, a significant jump from the previous rate of 17.5%. The move surprised economists who had anticipated a more modest increase to around 20%. The rate hike is a clear indication that Turkey is committed to curbing inflation through proactive monetary policy measures. The move was welcomed by investors (read: Time to Buy Turkey ETF on Surprise Rate Hike?).
Simplify Interest Rate Hedge ETF (PFIX - Free Report) – Up 12.5%
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. With rising rate worries currently doing rounds, the fund has every reason to surge (read: Best ETFs of Last Week).
Teucrium Sugar Fund (CANE - Free Report) – Up 6.2%
Raw sugar futures surged to a one-month high amid risks to supply for the key producer. Mounting concerns about impending drought conditions linked to the onset of El Nino are casting a shadow over the output in the key-growing region — India. This has sparked worries that the second-largest global exporter might impose restrictions on international sales during the forthcoming 2023/24 season, per tradingeconomics.
Losers
Global X Blockchain ETF (BKCH - Free Report) ) – Down 20.8%
It has been a lackluster month for cryptocurrency as the flight-to-safety totally marred this risky investing in the initial and middle part of August. However, the appreciation of Bitcoin resulting from a U.S. court's favorable decision, bolstered the potential for retail investor-friendly funds, at the end of the month (read: 5 Favorable Events Bitcoin Had in 2023: ETFs in Focus).
Roundhill MEME ETF ) – Down 15.3%
The underlying Solactive Roundhill Meme Stock Index consists of 25 equal-weighted U.S.-listed equity securities that exhibit a combination of elevated social media activity and high short interest. Risk-off trade sentiments did not favor shares of the struggling companies that commonly emerge as meme stocks.
AdvisorShares Psychedelics ETF (PSIL - Free Report) ) – Down 15.3%
The AdvisorShares Psychedelics ETF is actively managed and seeks long-term capital appreciation by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenues from or devote 50% of their assets to psychedelic drugs. The theme failed to secure investor interest in an otherwise choppy month like August 2023.
Global X CleanTech ETF (CTEC - Free Report) ) – Down 14.9%
Rising rate worries hurt the high-growth investing areas in August. Hence, the underlying Indxx Global CleanTech Index of CTEC, which provides exposure to companies adopting technologies focused on improving the efficiency of renewable energy production & mitigating the adverse environmental effects of resource consumption, was hurt badly.
Teucrium Wheat ETF (WEAT - Free Report) ) – Down 14.5%
Wheat futures dropped, resembling November 2020 levels in late August. This happened due to strong supply signals and predictions of weak demand. Russia is also increasing grain shipments this year due to improved weather during the late harvest, countering previous worries of Siberian dryness and boosting production.