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Top and Flop ETFs of January 2018

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As the first month of 2018 has come to a close, it’s time to look back and see what was hot and what not in this time period. In any case, the market behaved decently. The S&P 500 offered 5.9% gains in the last one month (as of Jan 29, 2017) while the Dow Jones index returned about 6.5% during this time frame.

Against this backdrop, let’s delve a little deeper and find out the winning and losing ETFs.

Best Performers

United States Natural Gas (UNG - Free Report) – Up 28.2%

Natural gas prices shot up on winter chills. Ample supplies were responsible for downbeat natural gas prices. Normally, Arctic Chills give life to this commodity every winter. The cold snap boosts electricity demand across the region, putting natural gas in focus. The fund thus gained substantially in January (read: Polar Blast Warms Up Natural Gas ETFs).

ETFMG Alternative Harvest ETF – Up 24.6%

The underlying index of the fund enables investors to take advantage of both event-driven news and long-term trends in the cannabis industry as well as the industries likely to be influenced by the medicinal and recreational cannabis legalization initiatives taking place in many locations globally.

The medical marijuana industry is growing by leaps and bounds lately and amassing investors’ interest. While the medical usage of marijuana is legalized in many areas, lately there has been a surge in legalization in the recreational usage of marijuana in some U.S. states. In an election held in 2016, marijuana was declared legal for recreational and medical purposes in seven additional states.

Legal marijuana sales surged 34% to $6.9 billion in 2016 according to the cannabis research firm ArcView. The firm expects the sales figure to skyrocket about 213% by 2021. This clearly explains the gains in MJX (read: Rush for Marijuana ETFs Getting Stronger).

First Trust China AlphaDEX ETF (FCA - Free Report) – Up 21.7%

The Chinese economy expanded 6.8% year over year in Q4, the same as in the previous three months and beating market expectations of 6.7%. This makes China ETF a gainful investment tactic.

Loncar Cancer Immunotherapy ETF (CNCR - Free Report) – Up 21.2%

Buyouts in the biotech space are in the spotlight currently. Celgene Corporation (CELG - Free Report) buying Juno Therapeutics Inc for $9 billion and Sanofi SA (ADR) (SNY - Free Report) buying Bioverativ Inc for $11.6 billion recently are probably pushing the space higher. Plus, the tax reform entails biotech companies to repatriate hundreds of billions of dollars stacked in the international economies. This extra cash may be used to buy back shares or pay out dividends in the coming days.

Worst Performers

iPath Bloomberg Sugar SubTR ETN – Down 12%

Higher supplies amid weak demand probably weighed on sugar prices which hurt the sugar-related exchange-traded products.

iShares Residential Real Estate Capped ETF (REZ - Free Report) – Down 5.2%

Amid rising interest rates, real estate stocks have underperformed and weighed on the fund.

iPath Pure Beta Softs ETN – Down 4.3%

The underlying index of the fund -- the Barclays Commodity Index Softs Pure Beta TR -- reflects the returns that are potentially available through an unleveraged investment in three futures contracts on softs commodities traded on U.S. exchanges. Coffee (43.6%), sugar (36.1%) and cotton (20.4%) are the three holdings of the ETN. A lower sugar price obviously weighed on the fund.

WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU - Free Report) – Down 3.8%

The fund looks to provide total returns, before expenses, that surpass the performance of the Bloomberg Dollar Spot Index. U.S. Treasury Secretary Steven Mnuchin recently promoted a weaker greenback, in order to boost the nation’s trade. This in turn weighed on the U.S. dollar (read: A Tale of Two Currencies and The ETF Impact).

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