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Hit and Flop ETFs of Last Week

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Wall Street took a major hit last week after President Donald Trump reignited global growth fears with the announcement of more tariffs in the wake of escalating trade war with China. This is especially true as he plans to impose a new tariff of 10% on the remaining $300 billion of Chinese goods effective Sep 1. And China retaliated by allowing the yuan to slip to the lowest level against the dollar in more than a decade (read: Fed & Trade Trigger Market Bloodbath: 6 Hot Inverse ETF Areas).

The new duty, which is expected to increase beyond 25% later, will be levied on a long list of goods including smartphones, laptop computers and children’s clothing. With this, the United States will effectively tax all Chinese imports. Notably, the S&P 500 and the Nasdaq plunged 3.1% and 3.9%, respectively, last week, marking their biggest weekly drops of 2019 while the Dow Jones had its second-worst week of the year, sliding 2.6%.

The rounds of fresh tariffs will hurt U.S. consumers, driving up prices of goods, thereby curtailing spending. It will further impact the worldwide economy and corporate profits, particularly at big U.S. exporters. All these will continue to weigh on the stock market and could disrupt global supply chains. Per Goldman, the new tariffs will trim up to 0.2 percentage points from U.S. GDP growth and cut 0.5- to 0.6 percentage points if the tariffs rise to 25%.

Additionally, the Fed’s slightly hawkish view added to the chaos though it cut rates for the first time in decades in the latest FOMC meeting last week. It said that the move is not the start of a lengthy series of rate cuts (read: Fed Cuts Rate: Sector ETFs & Stocks Set to Soar).

Given this, we have highlighted last week’s best and worst performing ETFs:

Best ETFs

VelocityShares Daily Long VIX Short-Term ETN

Volatility products have been the biggest winners as they outperform when the stock market crashes. Particularly, VIIX gained 18.6% last week. The product is linked to the daily performance of the S&P 500 VIX Short-Term Futures Index, measuring the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration. It has amassed $24.6 million in AUM and charges 89 bps in fees per year. The fund trades in an average daily volume of 1 million shares.

Invesco Solar ETF (TAN - Free Report)

This ETF, which offers global exposure to 22 solar stocks, climbed 6.6% last week on a spate of stronger-than-expected results from some of the solar firms like Enphase Energy Inc. (ENPH) and SunPower (SPWR). American firms dominate the fund’s portfolio with nearly 52% share, followed by China (24.3%) and Spain (7.1%). The product has amassed $420 million in its asset base and trades in average daily volume of 175,000 shares. It charges investors 70 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ - Free Report)

Treasury ETFs gained as yields fell sharply on a flight to safety. Notably, the products tracking the long end of the yield curve provide a safe haven and thus ZROZ, which follows the BofA Merrill Lynch Long Treasury Principal STRIPS Index, gained 6% last week. It holds 20 securities in its basket with effective maturity and effective duration of the fund being 27.37 years each. This fund has $275.8 million in AUM while a light average daily volume of 28,000 shares. It charges 15 bps in annual fees and has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook (read: Trump Threatens New Tariff: 5 ETF Buying Zones).

Worst ETFs

Global X Copper Miners ETF (COPX - Free Report)

Copper price declined on fears that escalation in trade tensions and slowing economic growth will hurt the red metal’s demand. As such, COPX, which offers global access to a broad range of copper mining companies, plunged 9% last week. It tracks the Solactive Global Copper Miners Total Return Index and holds 29 stocks in its basket. Canadian firms take the largest share at 25%, while China and Mexico receive double-digit exposure each. The product has managed $45.4 million in AUM, while charging 65 bps in fees per year. It trades in a light volume of 51,000 shares a day on average.

VanEck Vectors Oil Services ETF (OIH - Free Report)

Oil price saw a tumultuous ride on dual attack by the Fed and Trump as both actions will threaten oil demand, which is already witnessing a slowdown. With AUM of $660.3 million, OIH tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to the companies involved in providing oil services to the upstream oil sector, including oil equipment, oil services or oil drilling. It is home to 23 stocks and charges 35 bps in annual fees. Volume is solid, exchanging around 8 million shares in hand on average. The product shed 8.5% last week and has a Zacks ETF Rank #5 with a High risk outlook (read: Energy ETFs Crash on Rate Cut and New China Tariff).

Aberdeen Standard Physical Palladium Shares ETF (PALL - Free Report)

Palladium has been under pressure from the escalation in tariff threat and the struggling auto industry. Notably, palladium is used to make catalytic converters in gasoline automobiles. PALL seeks to match the price of palladium. It owns palladium bullion in plates or ingots kept in Zurich or London under the custody of JPMorgan Chase Bank. The product has amassed $183.6 million in its asset base and trades in lower volume of about 33,000 shares a day. It charges 60 bps in annual fees and lost 8.2% last week. The fund has a Zacks ETF Rank #5 with a High risk outlook (see: all the Precious Metal ETFs here).

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