Volatility has been dominating Wall Street over the past couple of weeks. Both the S&P 500 and the Dow Jones saw second consecutive weeks of loss, with the Dow suffering its largest percentage decline in two weeks since mid-September 2016. Meanwhile, the Nasdaq Composite Index witnessed the fourth week of losses, marking the longest weekly losing streak since May 2016 (read: 4 ETF Ways to Hedge Against Volatility).
The Washington turmoil, a terrorist attack in Barcelona and rumors over the resignation of President Donald Trump's Chief Economic Advisor Gary Cohn led to investors’ pessimism, sparking off risk aversion. Investors losing faith over Trump’s ability to deliver business-friendly policies following the abandon of his plans to form an infrastructure advisory council to implement his keystone $1-trillion infrastructure spending plan took a toll on the stock market last week.
Further, lingering tensions over North Korea and a slew of disappointing earnings reports added to the woes. In particular, Foot Locker (FL - Free Report) tumbled nearly 30% following weaker-than-expected earnings while Wal-Mart (WMT - Free Report) dropped 1.6% despite earnings and revenue beat.
Both, network equipment maker Cisco Systems (CSCO - Free Report) and data storage company NetApp (NTAP - Free Report) issued weak sales forecasts for the current quarter while L Brands (LB - Free Report) cut its annual profit forecast on weakening sales that led to a decline in their share price following their reports (read: Consumer ETFs in Focus on Wal-Mart Earnings Beat).
The feeble domestic backdrop coupled with a weak dollar has given an edge to international and commodity investing. As such, we have highlighted five top-performing ETFs of last week. Any of these could be strong momentum plays for investors should uncertainty prevail this week.
iPath Pure Beta Aluminum ETN (FOIL - Free Report)
This note provides exposure to the Barclays Aluminum Pure Beta TR Index, which reflects returns that are potentially available through an unleveraged investment in the futures contracts in the aluminum markets. The index may roll into one of a number of futures contracts with varying expiration dates, as selected using the Barclays Pure Beta Series 2 Methodology. The ETN has accumulated just $0.9 million in its asset base and trades in a paltry average daily volume of about 1,000 shares. It charges 75 bps in annual fees and gained 9.6% last week. FOIL has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
Columbia India Small Cap ETF (SCIN - Free Report)
SCIN targets the small cap segment of the Indian stock market. It tracks the Indxx India Small Cap Index and holds 75 securities in its basket with none making up for more than 3.9% of assets. From a sector look, industrials dominates the fund’s returns at 29%, closely followed by financials (18.9%) and consumer discretionary (17.7%). The fund has so far amassed $30.7 million in its asset base while charging 86 bps in annual fees. Volume is light, exchanging around 14,000 shares in hand a day. SCIN was up 6.1% last week and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 4 Best Performing International ETFs of 1H).
iPath Pure Beta Nickel ETN (NINI - Free Report)
This product is designed to provide exposure to the Barclays Nickel Pure Beta TR Index, which reflects returns that are potentially available through an unleveraged investment in the futures contracts in the nickel markets. The index may roll into one of a number of futures contracts with varying expiration dates, as selected using the Barclays Pure Beta Series 2 Methodology. NINI has AUM of $1.3 million while trades in a paltry volume of more than 1,000 shares. It charges 75 bps in annual fees and gained 5.9% last week. However, the note has an unfavorable Zacks ETF Rank #4 (Sell) with a High risk outlook.
VanEck Vectors China SME-ChiNext ETF (CNXT - Free Report)
This fund offers exposure to the largest and most-liquid China A-share stocks listed and trading on the Small and Medium Enterprise (SME) Board and the ChiNext Board of the Shenzhen Stock Exchange by tracking the SME-ChiNext 100 index. It holds 101 stocks in its basket with none accounting for more than 4.9% share. About one-third of the portfolio is allotted to information technology, while industrials, consumer discretionary and materials round off the next three spots with double-digit exposure each. The product is unpopular with AUM of $21.2 million and average daily volume of around 7,000 shares. It charges 81 bps in fees per year and added 4.8% last week. CNXT has a Zacks ETF Rank #3 with a High risk outlook (read: What Does the MSCI Inclusion Mean for China A Shares and ETFs?).
Renaissance International IPO ETF (IPOS - Free Report)
This fund provides international exposure to the IPO market by tracking the Renaissance International IPO Index and adds new companies on the fifth day of trading. It currently holds 51 stocks with each holding less than 7.7%, suggesting diversification benefits. Sector wise, the product is skewed toward financials at 37%, followed by utilities (14%) and technology (12%). In terms of country exposure, Europe takes the top spot at 62% while Asia and Asia Pacific round off the top two with double-digit allocation in the basket. The fund has accumulated $2.2 million and gained 4.2% last week. It trades in a paltry volume of under 1,000 shares while the expense ratio comes in at 0.80%. CNXT has a Zacks ETF Rank #3 with a High risk outlook.
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