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Best ETFs of July

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The markets were in great shape in July after a steep sell-off in late June thanks to Brexit. The key U.S. gauges, the S&P 500 and the Dow Jones Industrial Average, hit consecutive highs. Tailwinds were sufficient for the indices to log a steady ascent.

These included the energy sector rebound, the much less-than-feared impact of Brexit on the global economy (at least so far), modest improvement in the ongoing earnings season and relatively better banking earnings despite low levels of yields.

Plus, upbeat U.S. economic data and hints of a more accommodative monetary policy from foreign shores boosted investors’ confidence and showered gains on the U.S. market. Among the top ETFs, the S&P 500-based SPY added 8.6%, Dow Jones-based DIA gained 7.8%, Nasdaq-100 QQQ surged 12.5%, Europe ETFVGK added 10.4% and all-world ETF ACWI returned about 8.9%.

With all that’s been happening, a look at the top ETFs of the month is warranted. Following are the ETFs which fared better in the last one-month period (as of July 28, 2016) (as per xtf.com)

Best Performing ETFs

VanEck Vectors Steel ETF SLX – Up 28.12%

The price of steel has been rising lately. The implementation of tariff on steel imports in the U.S. was behind this jump. With this method, domestic companies were given a chance to guard themselves against the adverse impact of Chinese competitors thronging the market with cheap supply (read: Time to Invest in the Steel ETF).

SPDR S&P Metals and Mining ETF XME – Up 27.77%

Material ETFs have given a commendable performance so far this year (as of July 28, 2016). As the Fed remained dovish, the greenback stayed calm and safe-haven demand continued to be steady, demand for gold and silver mining stocks was strong. Plus, other metals like platinum and palladium are also on a tear lately on favorable demand-supply dynamics giving this metal and mining ETF every reason to skyrocket (read: Top ETFs of the Best Sectors This Year).

Investors should also note that PureFunds ISE Junior Silver ETF SILJ and ETFS Physical Palladium PALL were also among the top performers of the month. SILJ and PALL advanced about 27.71% and 25.67% in the last one month, respectively.

SPDR S&P Biotech ETF XBI – Up 24.03%

The return of risk-on sentiments helped biotech shares to soar. The space has been a subdued so far this year being caught in a web of issues. However, after steep sell-offs, especially in the biotech space, it seems to have returned to reasonable valuation. XBI added about 24% in the last one month (as of July 28, 2016) (read: Best Sector ETFs for Q3).

UBS ETRACS ISE Exclusively Homebuilders ETN HOMX – Up 23.67%

Housing is yet another soaring sector. Low levels of mortgage rates and multi-year high new and existing home sales are proffering gains on this sector. HOMX tacked on 23.7% gains in the last one month (as of July 28, 2016) (read: Play the Housing Boom with 3 Sector ETFs).

iShares MSCI Brazil Small-Cap ETF (EWZS - Free Report) – Up 22.37%

Brazil has been an eventful market lately on impeachment trials against the former president Dilma Rousseff. Plus, Olympics 2016 from August 5 to August 21 will likely have a considerable impact on smaller-cap companies like what we see in EWZS portfolio. This is because such events normally boost the economy of the concerned country and small-caps are mostly tied to the domestic economy (read: Is Summer Olympic 2016 a Boon to Brazil ETFs?).

EWZS jumped 22.4% in the last one month while another fund VanEck Vectors Brazil Small-Cap ETF BRF clung on to 22.1% gains in the same period (as of July 28, 2016).

iShares MSCI South Africa EZA – Up 21.38%

South Africa is a commodity-rich nation. Since commodity prices, especially metals, shot up in recent times, the South Africa ETF gained considerably. The fund was up 21.4% in the last one month (read: Fragile Five ETFs Not At All Fragile This Year?)

iShares PHLX Semiconductor ETF PSI– Up 21.14%

The tech space has been drawing investor attention lately on a slew of upbeat earnings. But within the broader tech space, semiconductor, the value-centric traditional tech area, is taking an upper hand against a still-edgy investing backdrop. Higher demand from emerging technology applications like tablets and smartphones despite still-subdued PC shipments acted as tailwinds to the space (read: Semiconductor ETFs Shine On Q2 Earnings Beat).

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