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After hitting a peak on the first trading day of May, U.S. stocks were once again caught in the trade drama. President Donald Trump is looking to increase tariffs from 10% to 25% on Chinese goods worth $200 billion today midnight and has threatened further tariffs on $325 billion shortly. China has threatened to retaliate if Trump implements the latest tariffs.
The move has escalated trade war fears and dimmed the chances of a deal between the two largest countries. This has made investors jittery in recent week, leading to a broad sell-off in the markets.
Many corners of the market have seen rough trading while a few still stand tall to start May. Below, we have highlighted ETFs from the best and worst zones over the past week:
Trump’s fresh tariff threat, which escalated the trade tariff spat between the United States and China, increased volatility and pushed up volatility products. VIXY focuses on the S&P 500 VIX Short-Term Futures Index, measuring the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration. It has amassed $266.7 million in AUM and charges 85 bps in fees per year. The fund trades in average daily volume of 1.9 million shares (read: Volatility ETFs Spike on Renewed Trade Tensions).
Aerospace & defense sector stocks have risen on better-than-expected solid earnings. PPA offers exposure to 48 companies that are involved in the development, manufacturing, operations as well as support U.S. defense, homeland security and aerospace operations. It tracks the SPADE Defense Index, charging 60 bps in annual fees from investors. Each security holds less than 7.5% of the portfolio. The fund has so far managed assets of $930.5 million while trading in lower average daily volume of about 75,000 shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Aerospace and Defense ETFs Rally on Strong Q1 Earnings).
The insurance corner of the broad financial market has been riding higher on a growing economy backed by a solid job market, growing wages and rising consumer confidence that is leading to higher demand for all types of insurance services. KBWP offers exposure to companies primarily engaged in U.S. property and casualty insurance activities. It holds 24 stocks in its basket with none making up for more than 8.82% of the assets. The fund charges 35 bps in fees per year and trades in average daily volume of 4,000 shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Worst Zones
Xtrackers Harvest CSI 500 China-A Shares Small Cap Fund (ASHS - Free Report) – Down 15.7%
Chinese stocks tumbled on fresh deterioration in Sino-US trade tensions. While most ETFs in the space have fallen over the past week, China-A shares ETF declined the most. ASHS offers direct exposure to small-cap China A-share equities and follows the China Securities 500 Index. Holding 502 stocks in its basket, it is widely spread across components with none holding more than 0.65% of the assets. The product is often overlooked by investors as depicted by AUM of $75.6 million and average daily volume of around 57,000 shares. The product charges 65 bps in annual fees and has a Zacks ETF Rank #3 with a High risk outlook (What Led China ETFs Outperform in Q1 & Have More Room to Run).
As China produces over 90% of the world's rare earths, the tariff threat has pushed rare earth metal ETF lower on concerns over the global supply outlook. REMX offers exposure to companies engaged in producing, refining, and recycling of rare earth and strategic metals and minerals. The ETF follows the MVIS Global Rare Earth/Strategic Metals Index, charging investors 59 bps in annual fees. With AUM of $131.1 million, the fund holds 20 stocks in its basket with each security accounting for less than 8% of the assets. It trades in good volume of 81,000 shares a day on average.
Oil price has been moving down over the past week on concerns that the intensifying U.S.-China trade war will dent demand for energy. OIH tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling. With AUM of $773.2 million, it holds 24 stocks in its basket and charges 35 bps in annual fees. The product has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs to Buy/Avoid on Higher Oil Prices).
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ETFs From Top and Flop Zones to Start May
After hitting a peak on the first trading day of May, U.S. stocks were once again caught in the trade drama. President Donald Trump is looking to increase tariffs from 10% to 25% on Chinese goods worth $200 billion today midnight and has threatened further tariffs on $325 billion shortly. China has threatened to retaliate if Trump implements the latest tariffs.
The move has escalated trade war fears and dimmed the chances of a deal between the two largest countries. This has made investors jittery in recent week, leading to a broad sell-off in the markets.
Many corners of the market have seen rough trading while a few still stand tall to start May. Below, we have highlighted ETFs from the best and worst zones over the past week:
Best Zones
ProShares VIX Short-Term Futures ETF (VIXY - Free Report) – Up 11.4%
Trump’s fresh tariff threat, which escalated the trade tariff spat between the United States and China, increased volatility and pushed up volatility products. VIXY focuses on the S&P 500 VIX Short-Term Futures Index, measuring the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration. It has amassed $266.7 million in AUM and charges 85 bps in fees per year. The fund trades in average daily volume of 1.9 million shares (read: Volatility ETFs Spike on Renewed Trade Tensions).
Invesco Aerospace & Defense ETF (PPA - Free Report) – Up 4.4%
Aerospace & defense sector stocks have risen on better-than-expected solid earnings. PPA offers exposure to 48 companies that are involved in the development, manufacturing, operations as well as support U.S. defense, homeland security and aerospace operations. It tracks the SPADE Defense Index, charging 60 bps in annual fees from investors. Each security holds less than 7.5% of the portfolio. The fund has so far managed assets of $930.5 million while trading in lower average daily volume of about 75,000 shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Aerospace and Defense ETFs Rally on Strong Q1 Earnings).
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) – Up 3.8%
The insurance corner of the broad financial market has been riding higher on a growing economy backed by a solid job market, growing wages and rising consumer confidence that is leading to higher demand for all types of insurance services. KBWP offers exposure to companies primarily engaged in U.S. property and casualty insurance activities. It holds 24 stocks in its basket with none making up for more than 8.82% of the assets. The fund charges 35 bps in fees per year and trades in average daily volume of 4,000 shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Worst Zones
Xtrackers Harvest CSI 500 China-A Shares Small Cap Fund (ASHS - Free Report) – Down 15.7%
Chinese stocks tumbled on fresh deterioration in Sino-US trade tensions. While most ETFs in the space have fallen over the past week, China-A shares ETF declined the most. ASHS offers direct exposure to small-cap China A-share equities and follows the China Securities 500 Index. Holding 502 stocks in its basket, it is widely spread across components with none holding more than 0.65% of the assets. The product is often overlooked by investors as depicted by AUM of $75.6 million and average daily volume of around 57,000 shares. The product charges 65 bps in annual fees and has a Zacks ETF Rank #3 with a High risk outlook (What Led China ETFs Outperform in Q1 & Have More Room to Run).
VanEck Vectors Rare Earth/Strategic Metals ETF (REMX - Free Report) – Down 13.6%
As China produces over 90% of the world's rare earths, the tariff threat has pushed rare earth metal ETF lower on concerns over the global supply outlook. REMX offers exposure to companies engaged in producing, refining, and recycling of rare earth and strategic metals and minerals. The ETF follows the MVIS Global Rare Earth/Strategic Metals Index, charging investors 59 bps in annual fees. With AUM of $131.1 million, the fund holds 20 stocks in its basket with each security accounting for less than 8% of the assets. It trades in good volume of 81,000 shares a day on average.
VanEck Vectors Oil Services ETF (OIH - Free Report)
Oil price has been moving down over the past week on concerns that the intensifying U.S.-China trade war will dent demand for energy. OIH tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling. With AUM of $773.2 million, it holds 24 stocks in its basket and charges 35 bps in annual fees. The product has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs to Buy/Avoid on Higher Oil Prices).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>