The year 2016, saw a somber start with equities being marred by global growth worries. The end however is poised to be a grand with
SPDR S&P 500 ETF SPY, SPDR Dow Jones Industrial Average ETF DIA, PowerShares QQQ ETF QQQ and iShares MSCI ACWI ACWI returning 11.3%, 14.2%, 7.6% and 7.4% respectively as of December 15, 2016. Surprisingly, Donald Trump, who was widely speculated to dampen spirits, did the contrary and took equities to new highs post-election.
Amid all the aplomb, a look at some ETFs that have seen staggering growth makes sense. With just a handful of days remaining in 2016, investors deserve to know which ETFs delivered over 100% so far this year (as of December 15, 2016).
PureFunds ISE Junior Silver ETF ( SILJ Quick Quote SILJ - Free Report) – Up 147.7%
Silver prices had a great run this year thanks to its huge safe haven demand in the initial phase of the year and recovery in global manufacturing activities in the latter half. Silver has high usage in industrial activities with about 50% of total demand coming from industrial applications.
With most of the key economies’ manufacturing data coming in the growth zone lately, silver definitely had a great run. As a result, silver miners benefited greatly out of this uptrend, giving SILJ about 150% boost this year (as of December 15, 2016) (read:
Will Silver ETFs Outshine Gold in 2017?). SPDR S&P Metals & Mining ETF XME – Up 116.9%
Most metal and mining stocks and the related fund XME have benefited this year because of the same reason that silver has gained. Also, to close out the year, the dual dose of Trump and China boosted the metals and mining space. Trump’s pledge to invest in infrastructure activities also favored some metals that are used as raw materials in infrastructural activities.
Plus, China's factory activity grew at its
fastest clip in over two years in November. Since the Chinese economy accounts for about half of the global consumption of industrial commodities, the surge in metal and mining stocks are self-explanatory (read: Top and Flop ETFs of November). VanEck Vectors Steel ETF SLX – Up 106.2%
Trump’s intention to give a boost to infrastructure activities and upgrade the nation’s crumbling roads, bridges and waterways has favored steel prices. Also, the implementation of tariff on steel imports in the U.S. in order to safeguard domestic companies from the adverse impact of cheap supplies from China helped the sector. If these were not enough, bets on
tighter supply from China with the country taking measures to ‘ cut excess steel capacity’ also pushed up prices in recent sessions. Therefore, SLX is up over 106% this year (as of December 15, 2016) (read: Steel ETF Looks Promising after Trump Win). VanEck Vectors Coal ETF KOL – Up 105.6%
Here also, China and Trump acted as tailwind.China executed a policy to lower its dependence on coal by restricting on output to below the required amount. This led to a tight supply situation and triggered
a price rally.
Taking a completely difference stance from president Obama, Trump is ready to push for more fossil fuel generation, be it from crude oil, natural gas or coal. He also expressed skepticism over global climate change in his campaign. Naturally, coal stocks and the related ETF had a great 2016.
Investors should note that an over 100% jump in KOL is a very big thing given how downtrodden the commodity was previously thanks to the gradual shift noticed from this pollution-generating commodity (read:
Are the Dark Days of Coal ETF Really Over?). VanEck Vectors Russia Small-Cap ETF RSXJ – Up 102.5%
The Russian economy is highly energy-dependent. Now, with Brent crude oil ETF
United States Brent Oil BNO rallying over 23%, the Russian economy gained some traction. Plus, Russia emerged as a winner post Trump’s win in the U.S. presidential election.
Notably, the relationship between the U.S. and Russia was stressed when the latter annexed Crimea from Ukraine in early 2014. But now the ice may start melting. In fact, there is
information that the two leaders have already conversed on issues like “shared threats, strategic economic issues and the historical US-Russia relationship (read: Will Russia ETFs Prosper Under Trump Presidency?).” Want key ETF info delivered straight to your inbox?
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