After a solid comeback, the momentum on the Wall Street cooled down last week given the round of dismal data across the globe, the European Central Bank’s surprise move and dismal U.S. jobs data that renewed threats of global slowdown.
The ECB cut its economic growth forecast for this year and pledged to hold off on any interest rate increases until at least the end of the year. It also announced new measures to support a slowing economy, including a round of long-term loans to European financial institutions. The United States added just 20,000 new jobs in February, the smallest gain since September 2017, signaling the slowdown in the U.S. economy (read: ECB Surprisingly Dovish: Play Currency-Hedged Euro Zone ETFs).
Additionally, the optimism over the U.S.-China trade deal seems to be fading with nothing materializing yet. There are speculations that the two biggest economies of the world may not be as close to a trade deal as President Donald Trump had suggested. Further, weak Chinese trade data set the alarm bells ringing for the global stock market last week. China’s exports tumbled 20.7% year over year in February, the largest decline in three years, while imports fell 5.2% for the third straight month despite a spate of support measures.
Decelerating economic growth in Europe and China resulted in weak global economy , hindering a $10 trillion global stock rally. As a result, the Wall Street posted its biggest weekly declines of the year with the three major indices dropping more than 2%. The S&P 500 logged in the worst week of 2019 while Nasdaq snapped a 10-week winning streak. Dow Jones notched its second weekly decline of the year.
Given this, we have highlighted last week’s best and worst performing ETFs:
iPath Series B S&P 500 VIX Short-Term Futures ETN
Volatility products turned out to be the major gainers last week, as these tend to outperform when markets are falling or fear levels over the future are high. The note is linked to the performance of the S&P 500 VIX Short-Term Futures Index Total Return, which provides access to equity market volatility through CBOE Volatility Index futures. The index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects market participants’ views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the index. The ETF has amassed $711.7 million in its asset base and charges 89 bps in annual fees. It trades in volume of 5.9 million shares a day on average and has gained 10.8% last week (read: Popular Volatility ETFs Expiring: What You Need to Know).
Columbia India Small Cap ETF
Indian stocks market got a boost after the ECB downgraded the outlook for the Eurozone’s economy that resulted in huge money flows from foreign investors. In fact, India’s equities benchmark registered their longest stretch of weekly gains since November with SCIN stealing the show with 7.4% gains. This fund targets the small-cap segment of the Indian market and follows the Indxx India Small Cap Index. It is unpopular and illiquid with $14.6 million in AUM and average daily volume of 5,000 shares. It has an expense ratio of 0.77%. Holding 73 securities, the ETF is pretty spread across components with each accounting for less than 4.7% share. The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Why India ETFs Failed to Catch Up with Global Market Rally).
AdvisorShares Dorsey Wright Short ETF (DWSH - Free Report)
With a decline in the stock market, this ETF has emerged as winner. It adds alpha to an investment portfolio, especially during a bear market. DWSH is an actively managed ETF that short sells U.S. large-cap securities with the highest relative weakness within an investment universe. It holds 103 stocks in its basket and chares higher annual fee of 99 bps. The product trades in lower average daily volume of 33,000 shares and has accumulated $19.6 million in its asset base.
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report)
Freight movement has been uncertain given fundamental and sentimental shifts. BDRY is an actively managed ETF that seeks to provide exposure to daily changes in the price of dry bulk freight futures by tracking the performance of a portfolio consisting of a three-month strip of the nearest calendar quarter of futures contracts on specified indexes that measure rates for shipping dry bulk freight. The fund has accumulated about $2.1 million in AUM. It trades in a paltry volume of about 3,000 shares per day on average and charges a higher annual fee of 1.72%. BDRY was down 10.6% last week (see: Top and Flop ETFs at Half-Way Q1).
SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report)
Oil price dropped last week on fears of economic slowdown and a respite in strength in U.S. dollar. While most of the energy ETFs saw tumultuous ride, XES dropped the most losing 8.3%. With AUM of $202.5 million, XES tracks the S&P Oil & Gas Equipment & Services Select Industry Index, which measures the performance of the companies engaged in the oil and gas equipment and services industry. It holds 40 securities in its basket and charges 35 bps in annual fees. The fund trades in a solid average daily volume of 1.6 million shares and has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: Trade Optimism & Earnings Effect: 5 Hot ETF Charts).
Loncar Cancer Immunotherapy ETF (CNCR - Free Report)
Being a high growth sector, biotech took a hit from the weakness in the broader market. CNCR tracks the Loncar Cancer Immunotherapy Index and provides exposure to a basket of 26 companies that develop therapies to treat cancer by harnessing the body’s own immune system. The ETF has amassed $39.8 million in its asset base and trades in a lower average daily volume of around 15,000 shares. The expense ratio comes in at 0.79%. The product has shed 7.6% last week and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook.
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