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We are fast approaching the end of 2021 and it’s been a stellar year so far for Wall Street. The S&P 500 hit a record high of 4,743.83 for the first time. The index is up now 21.6%. The S&P 500 has emerged as the best among the key U.S. indexes, with the Dow Jones (up 14.1%), the Nasdaq Composite (up 16.2%) and the Russell 2000 (up 8.4%) trailing it.
The key events of this year that pulled the strings of the markets were record-high inflation, the start of Fed’s QE tapering from November, the likelihood of rate hikes in 2022, President Biden’s $1.2-trillion infrastructure bill, COVID-19 threat (first Delta and now Omicron variant) and hopes for more COVID-19 therapies from the likes of Merck and Pfizer.
On the international market front, Chinese markets caught attention for regulatory crackdown especially on its tech sector, the property market bubble and toughening of diplomatic ties with the United States. Plus, global economies seesawed between economic reopening and lockdowns, depending on the respective COVID-19 scenarios with Europe facing a huge threat in winter.
Against this backdrop, below we highlight a few ETF areas that have been the winners in 2021.
Shipping
The ongoing supply chain issues have kept the demand for shipping at pretty high levels, leading to higher freight rates. The rate for a single shipping container has shot up materially over the last 18 months as the pandemic disrupted supply chains and trade channels.
As a result, Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) has jumped 211% this year.The underlying Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure the rates for shipping dry bulk freight.
Rising freight rates are likely to push up global import prices by 11% by 2023, according to a UN report, as shipping lines reported record profits for the third quarter.
Carbon Credit ETFs
Going green has become a mantra to save the earth. The governments around the world are focused on moving toward the goal of net-zero emissions by 2050 set by the 2015 Paris agreement. Some companies are trying to reduce their carbon footprint voluntarily.
Another way for companies to manage their carbon footprint is to buy and sell emission allowances. In the cap-and-trade system, a government sets a limit on overall emissions which is tightened over time. Big carbon emitters need to buy these pollution permits to stay under regularity caps.
This is where products like iPath Series B Carbon ETN (GRN - Free Report) (up 127.1%), Kfa Global Carbon ETF (KRBN - Free Report) (up 90.7%) win.
The Barclays Global Carbon II TR USD Index of GRN seeks to provide exposure to the price of carbon as measured by the return of futures contracts on carbon emissions credits from the European Union Emission Trading Scheme and the Kyoto Protocol Clean Development Mechanism. The underlying IHS Markit Global Carbon Index of KRBN tracks the most-liquid segment of the tradable carbon credit futures markets.
Tin
Industrial metals had a sizzling 2021. Vaccines, therapies and President Biden’s $1.2-trillion infrastructure bill instilled considerable optimism in the markets. This, in turn, boosted global economic recovery and industrial activities. No wonder, industrial metals have soared (read: Industrial Metal ETFs Win in 2021: What Next in 2022?).
Among many winners in this space, tin grabbed eyeballs. Tin prices have been hovering around a record high on supply crunch. Prices for the metal have been powered by supply disruptions in key producing countries and surging demand for electronics, in which the metal is used for soldering to connect components, according to a mining.com article.
The global tin market deficit is expected to increase to 12,700 tons in 2022 from 10,200 tons this year, International Tin Association (ITA) predicted in June, as quoted on mining.com. Indonesia — a key producer — plans to stop the soldering metal’s exports from 2024 to attract investments in downstream industries. This metal is also a beneficiary of the rise in clean energy.
Energy
2021 can easily be accredited as a year of comeback for energy. WTI crude United States Oil Fund LP (USO) has added 54% this year. Brent crude United States Brent Oil Fund LP (BNO - Free Report) has gained 53.2% in the year-to-date frame. The rally has been spurred by economic reopening, which has called for higher demand and subdued valuation. OPEC and non-OPEC partners, a group collectively referred to as OPEC+, have also maintained a protocol of a gradual increase in oil supply.
Moreover, bets that the new COVID-19 variant Omicron may cause milder illness than previously feared lessened chances of further lockdowns, which in turn pushed oil prices higher. Apart from the easing concerns about the impact of the Omicron variant on global fuel demand, the fact that Iran nuclear talks hit a snag, deferring the return of Iranian crude supplies, boosted oil prices
Natural Gas ETF First Trust (FCG - Free Report) (up 87.6%), Dynamic Energy Exploration & Production Invesco (PXE) (up 84.1%) are two toppers of this space.
Uranium
Uranium stocks have been on a tear buoyed by growing social media attention, the restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by the COVID-related production cuts. North Shore Global Uranium Mining ETF (URNM - Free Report) has jumped 74.2% this year.
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5 ETF Areas Up At Least 70% in 2021
We are fast approaching the end of 2021 and it’s been a stellar year so far for Wall Street. The S&P 500 hit a record high of 4,743.83 for the first time. The index is up now 21.6%. The S&P 500 has emerged as the best among the key U.S. indexes, with the Dow Jones (up 14.1%), the Nasdaq Composite (up 16.2%) and the Russell 2000 (up 8.4%) trailing it.
The key events of this year that pulled the strings of the markets were record-high inflation, the start of Fed’s QE tapering from November, the likelihood of rate hikes in 2022, President Biden’s $1.2-trillion infrastructure bill, COVID-19 threat (first Delta and now Omicron variant) and hopes for more COVID-19 therapies from the likes of Merck and Pfizer.
On the international market front, Chinese markets caught attention for regulatory crackdown especially on its tech sector, the property market bubble and toughening of diplomatic ties with the United States. Plus, global economies seesawed between economic reopening and lockdowns, depending on the respective COVID-19 scenarios with Europe facing a huge threat in winter.
Against this backdrop, below we highlight a few ETF areas that have been the winners in 2021.
Shipping
The ongoing supply chain issues have kept the demand for shipping at pretty high levels, leading to higher freight rates. The rate for a single shipping container has shot up materially over the last 18 months as the pandemic disrupted supply chains and trade channels.
As a result, Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) has jumped 211% this year.The underlying Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure the rates for shipping dry bulk freight.
Rising freight rates are likely to push up global import prices by 11% by 2023, according to a UN report, as shipping lines reported record profits for the third quarter.
Carbon Credit ETFs
Going green has become a mantra to save the earth. The governments around the world are focused on moving toward the goal of net-zero emissions by 2050 set by the 2015 Paris agreement. Some companies are trying to reduce their carbon footprint voluntarily.
Another way for companies to manage their carbon footprint is to buy and sell emission allowances. In the cap-and-trade system, a government sets a limit on overall emissions which is tightened over time. Big carbon emitters need to buy these pollution permits to stay under regularity caps.
This is where products like iPath Series B Carbon ETN (GRN - Free Report) (up 127.1%), Kfa Global Carbon ETF (KRBN - Free Report) (up 90.7%) win.
The Barclays Global Carbon II TR USD Index of GRN seeks to provide exposure to the price of carbon as measured by the return of futures contracts on carbon emissions credits from the European Union Emission Trading Scheme and the Kyoto Protocol Clean Development Mechanism. The underlying IHS Markit Global Carbon Index of KRBN tracks the most-liquid segment of the tradable carbon credit futures markets.
Tin
Industrial metals had a sizzling 2021. Vaccines, therapies and President Biden’s $1.2-trillion infrastructure bill instilled considerable optimism in the markets. This, in turn, boosted global economic recovery and industrial activities. No wonder, industrial metals have soared (read: Industrial Metal ETFs Win in 2021: What Next in 2022?).
Among many winners in this space, tin grabbed eyeballs. Tin prices have been hovering around a record high on supply crunch. Prices for the metal have been powered by supply disruptions in key producing countries and surging demand for electronics, in which the metal is used for soldering to connect components, according to a mining.com article.
The global tin market deficit is expected to increase to 12,700 tons in 2022 from 10,200 tons this year, International Tin Association (ITA) predicted in June, as quoted on mining.com. Indonesia — a key producer — plans to stop the soldering metal’s exports from 2024 to attract investments in downstream industries. This metal is also a beneficiary of the rise in clean energy.
Energy
2021 can easily be accredited as a year of comeback for energy. WTI crude United States Oil Fund LP (USO) has added 54% this year. Brent crude United States Brent Oil Fund LP (BNO - Free Report) has gained 53.2% in the year-to-date frame. The rally has been spurred by economic reopening, which has called for higher demand and subdued valuation. OPEC and non-OPEC partners, a group collectively referred to as OPEC+, have also maintained a protocol of a gradual increase in oil supply.
Moreover, bets that the new COVID-19 variant Omicron may cause milder illness than previously feared lessened chances of further lockdowns, which in turn pushed oil prices higher. Apart from the easing concerns about the impact of the Omicron variant on global fuel demand, the fact that Iran nuclear talks hit a snag, deferring the return of Iranian crude supplies, boosted oil prices
Natural Gas ETF First Trust (FCG - Free Report) (up 87.6%), Dynamic Energy Exploration & Production Invesco (PXE) (up 84.1%) are two toppers of this space.
Uranium
Uranium stocks have been on a tear buoyed by growing social media attention, the restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by the COVID-related production cuts. North Shore Global Uranium Mining ETF (URNM - Free Report) has jumped 74.2% this year.