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Top & Flop ETFs of November

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Finally, the U.S. stock market has entered into its strong stretch. Historically, the three months from November through January are the most successful in the stock markets. A consensus carried out from 1950 to 2013 has revealed that November has ended up offering positive returns in 43 years and negative returns in 22 years, with an average return of 1.37%, as per moneychimp.com.

November stands second in terms of monthly returns over the past two decades. However, this year, the market looked more like the down-years due to a host of concerns, with rising rate worries being at the helm. Global growth has been in jeopardy and commodities falling fast.

Among the top ETFs, investors saw U.S. ETFs advance slightly with SPY adding 0.3%, DIA gaining 0.12% and QQQ moving higher by about 0.25% in the month (as of November 27, 2015).  Let’s take a look at the three best and worst performing ETFs of the month.

Top Performers

KraneShares CSI China Five Year Plan ETF (KFYP) – Up 14.7%

China was the beneficiary of compelling valuation. After a bloodbath in August following the currency devaluation and several offhand economic data, China started to recoup losses from October with its A-Shares ETFs turning out as chartbusters in November. Plenty of monetary easing policies, changes in demographic policy and hopes for further easing (as the economy is still reeling under pressure) helped KFYP to add over 14% in the month (read: China Ends One Child Policy: Stocks & ETFs to Watch).

BioShares Biotechnology Clinical Trials Fund (BBC) – Up 13%

The biotech space was hit hard in September on drug pricing concerns. However, the sell-off made this piping hot corner affordable. A whirlwind of mergers and acquisitions, plenty of drug launches, FDA approvals for the highly awaited drugs, ever-increasing demand in the emerging markets and surging health care spending made this sector the star performer of November.

Needless to say, the operating fundamentals of the health care space are stronger than many other sectors. Other biotech and pharma ETFs that stole the show in the month were SPDR S&P Pharmaceuticals ETF (XPH), Loncar Cancer Immunotherapy ETF (CNCR - Free Report) and ALPS Medical Breakthroughs ETF (SBIO - Free Report) which advanced about 9.6%, 9.2% and 7%, respectively (read: 4 Sector ETFs Crushing the Market in Q4).

Deutsche X-trackers Japan JPX-Nikkei 400 Hedged Equity ETF (JPNH) – Up 12%
Japan may have entered into a technical recession in Q3, but that did not turn off investors’ enthusiasm toward Japanese investing. An ongoing QE measure and hopes of further monetary support which can fight weakening growth and boost consumer prices were behind the optimism in the Japanese stocks. Another Japanese ETF that soared (about 10.7%) in the month was WisdomTree Japan Hedged Health Care Fund (DXJH)
 
Barclays Inverse US Treasury Aggregate ETN (TAPR) – Up 8.2%
 
As the Fed gave cues of a rate hike, the inverse U.S. Treasury ETF which follows a unique strategy to hedge against or benefit from the rising U.S. dollar interest rates by tracking the Barclays Inverse US Treasury Futures Aggregate Index, gained over 8% (read: Rate Hike Fears Rise, Time for Taper ETF?).
 
Worst Performers
 
Metals were slaughtered in the month. The double whammy of flagging global growth suppressing demand and the strength of the greenback in the wake of the U.S. policy tightening have weighed heavily on metal ETFs.
 
ETFS Physical Palladium Shares (PALL) – down 19.1%

This product looks to reflect the price of palladium. This precious metal has a number of uses in society including jewelry and dentistry, though the key use is in the auto sector with catalytic converters to control emissions. As a result, following the Volkswagen scandal, demand for the metal declined. While a higher greenback dampened the metal price, the rise in U.S. interest rates would make auto loans pricier, which in turn might curb auto sales in the country.

E-TRACS UBS Bloomberg CMCITR Long Platinum ETN (PTM) – down 18.4%
 
This is a sub-index of the UBS Bloomberg Constant Maturity Commodity Index & measures the collateralized returns from a basket of platinum futures contracts which is designed to be representative of the entire liquid forward curve of the platinum contracts. In addition to usage in jewelry, platinum is widely used in auto-catalysts to control emissions and so its decline is self-explanatory.
 
Global X Copper Miners ETF (COPX) – down 18.9%
 
Copper prices slipped to a six-year low on growth concerns. A weak Chinese economy remains a concern for the fund for long. China matters the most for this metal as the country is the world’s biggest consumer of this industrial metal, making up roughly 40% of global copper demand. This headwind shattered the copper mining ETFs in November. Notably, mining ETFs generally trade as a leveraged play on the underlying metal and thus see a higher jump (read: Will the China Stimulus Boost Copper ETFs This Quarter?). 
 
iPath Dow Jones-UBS Nickel ETN (JJN) – down 16.6%
 
Nickel prices plummeted to a nine-year low. Solid exports from Malaysia are resulting in a supply glut and soft demand for stainless steel in Europe has wrecked havoc on nickel ETFs.
  
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