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Best & Worst ETFs of February 2017

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Continuing the Trump rally, the month of February ushered in strong gains. Especially, hopes of fat spending on the U.S. infrastructure and defense sectors, tax cuts and deregulations sent the stocks rallying. Several U.S. indices hit all-time highs. The S&P 500-based ETF SPY, Dow Jones-based ETF DIA and Nasdaq 100-based QQQ added in the range of 3.7% to 4.7% in February.

Also, a slew of upbeat earnings this reporting cycle spurred market movement. Further, things are looking up in Europe and Japan which renewed confidence in global economic growth.

However, slight overvaluation concerns prevailed, keeping some safe haven assets and low-volatility products alive. That said, we have highlighted the three best and worst performing ETFs of February. The data are as per (read: February ETF Asset Report: EM Gains, U.S. Loses).

Best ETFs

iPath Dow Jones-UBS Nickel ETN JJN

Nickel prices rose in February as the Philippines launched an environmental clampdown on the mining industry. As part of this crackdown, 21 mines were closed while six pits were suspended. The country is the world’s most significant producer of unprocessed nickel ore and a huge supplier to China, per the source.

If this was not enough, the long-struggling manufacturing sector of China is finally turning around. This gave a boost to the demand outlook of this industrial metal and pushed up prices. Also, Trump’s focus on increasing infrastructure in America has charged up industrial metals somewhat in recent times. As a result, nickel ETN JJN added 18.9% while iPath Pure Beta Nickel ETN NINI advanced about 12.7% in the last one month (as of February 28, 2017).

 BioShares Biotechnology Clinical Trials BBC

After some initial glitches, thanks to the price-gouging issue and uncertainty regarding the repealing of Obamacare, healthcare stocks have seen a turnaround. Compelling valuation after the recent sell-off and a somewhat positive meeting between Trump and drug makers did the trick. Trump also indicated that regulatory approvals to pharmaceutical companies would be made easy.

Probably this is why BBC was up 15.1% in the month followed by ALPS Medical Breakthroughs ETF SBIO (up 14.9%) and SPDR S&P Pharmaceuticals ETF XPH (up 12.4%).

ELEMENTS DJ High Yield Select 10 ETN DOD

Now who doesn’t know about the sweeping Dow rally? The index scaled its 12th successive high in the month, almost similar to the 1987’s streak of thirteen sessions of record closes. While all the indexes benefited from the Trump bump, Dow Jones emerged as the best-positioned (read: Dow Jones Hits 12th Session of Record High: ETFs in Focus).

As a result, the ETN gained about 14.2% in the month. This ETN provides investors pure play to the 10 highest dividend-yielding securities in Dow Jones Industrial Average in equal proportions.

Worst ETFs

United States Natural Gas Fund UNG

Last month, natural gas prices plummeted to their lowest level since November on warmer weather in the U.S. As a result, storage levels shrank at a slower-than-expected clip. The fund UNG thus lost about 22.6% in February. The index looks to reflect the daily changes of the price of natural gas delivered at the Henry Hub, Louisiana.

Another natural gas fund, United States 12 Month Natural Gas UNL shed about 15.9% followed by iPath Bloomberg Natural Gas SubTR ETN GAZ (down 14.6%).

Global X MSCI Nigeria ETF (NGE - Free Report)

The economy recorded its first yearly reduction in growth in 25 years as Africa’s top oil producer saw economic contraction for the fourth successive quarter of 2016 on oil price issues. So, NGE was down about 9.4% in February.

PowerShares DWA Energy Momentum ETF PXI

The energy sector underperformed in the month despite stable oil prices. Several energy funds including PXI, PowerShares S&P SmallCap Energy ETF PSCE and iPath Bloomberg Energy SubTR ETN JJE retreated about 8.7%, 8.2% and 7.7%, respectively, in the month (read: Can Oil ETFs Rebound on Possibility of More OPEC Cuts?).

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