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Best and Worst ETFs of Q2

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The second quarter of Q2 can be vital to investors for many reasons starting from global policy tightening talks to wavering Trump trade and key elections in an otherwise-improving Europe. Though the broader market was pretty upbeat in the quarter, international markets, especially Europe, clearly beat the U.S. (read: Trump Slump to Oil Slide: Top ETF Stories of First-Half 2017).

All world ETF iShares MSCI ACWI ETF (ACWI - Free Report) added 4.7% in Q2 while key U.S. ETF SPDR S&P 500 ETF (SPY - Free Report) advanced about 3.3%. Europe ETF Vanguard FTSE Europe ETF (VGK - Free Report) jumped 8.9%, emerging market fund iShares MSCI Emerging Markets ETF (EEM - Free Report) gained about 5%, iShares Asia 50 ETF (AIA - Free Report) spurted 8% and iShares MSCI All Country Asia ex Japan ETF (AAXJ - Free Report) added over 6.8%.

Against this backdrop, we highlight the ETF options that topped in the quarter and the ones that flopped.

Gainers

Global X MSCI Greece ETF (GREK - Free Report) – Up 26.3%

The Greek economy grew 0.4% sequentially in the first quarter of 2017, higher than preliminary estimates of 0.1% shrinkage and a downwardly revised 1.1% decline in the previous period. The economy’s credit rating recently got an upgrade from Moody’s, following which its 10-year borrowing costs plunged to their lowest level since 2009.

“Moody's expects to see growth this year and next, after three years of stagnation and a cumulative loss in output of more than 27 percent since the onset of Greece's crisis," the agency said as per the article published on CNBC. As a result, GREK gained 26.3% in the last three months.

ARK Web x.0 ETF (ARKW - Free Report) – Up 21.0%

The fund focuses on companies tied to innovation and “expected to benefit from shifting the bases of technology infrastructure to the cloud, enabling mobile, new and local services.” It “gives to game-changing companiesin some of the most promising areas of the economy.” Since the second quarter was all about the tech sector rally in the U.S., this fund had every reason to outperform. An almost similar-themed product ARK Innovation ETF ARKK also added 20.5% in the fund (read: Top Sector ETFs of 1H).

Amplify Online Retail ETF (IBUY - Free Report) – Up 19.9%

As of now, online retail sales make up one tenth of total retail and about 5% of annual e-commerce revenue in the U.S. The space is developing fast with increased usage of smartphones and other mobile Internet devices. More than the U.S., the real growth opportunities lay in the under-penetrated emerging markets. Overall, its fast rise has made this fund a winner (read: 5 ETFs & Stocks: Silver Lining in Soft May Retail Sales).

Losers

iPath Bloomberg Natural Gas SubTR ETN – Down 30.7%

Overall, energy prices underperformed in Q2 on solid U.S. output. Natural gas prices were also victims of the demand-supply imbalance (read: Top & Flop Zones of First Half and Their ETFs).

Rex VolMaxx Long VIX Weekly Futures Strategy ETF (VMAX - Free Report) – Down 30.1%

The fund provides long exposure to the VIX Index by holding a combination of VIX futures contracts that are near expiration. Since volatility touched a multi-year low in Q2, this volatility based fund was badly hurt.

iPath Pure Beta Sugar ETN – Down 29.5%

Global sugar trading was in dire straits in Q2. “Apparent weaker sugar consumption" in India, which is the biggest consumer, was the main reason for the price fall. Second, ethanol is co-produced by sugar mills as sugar cane juice us needed to produce ethanol. With oil price dropping, price of ethanol — which is often used to fuel cars — also declined. This curbed the price of sugar too. Also, “higher duties on sugar imports to top buyer China” hurt sugar prices as per an article published on agrimoney.

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