August has been a volatile month for the stock market, which witnessed wild swings. This is especially due to U.S.-China trade conflict, weak global economic data, low inflation, collapse in bond yields, political unrest in Hong Kong as well as a plunge in Argentina's currency and stock markets.
In fact, the U.S. Treasury yield curve temporarily inverted on Aug 13 for the first time since June 2007 as 10-year yields broke below 2-year yields, signaling that the world’s biggest economy could be heading toward a recession.
However, rising hopes of monetary stimulus globally as well as renewed trade optimism continue to drive investors’ confidence. This is especially true as major central banks across the globe are taking steps to prop up slowing economic growth that have eased global recession concerns. In the latest trade drama, the United States and China are expected to resume trade talks shortly after a weekend of escalating tension (read: 5 ETF Zones to Take Shelter From Trade War).
Though the broad stock market has been in red this month so far, there are few corners that are easily outperforming. Below, we have highlighted ETFs from those areas that have gained in double-digits this month amid heightened volatility:
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 21.3%
Shipping stocks are sailing smoothly on the resumption of iron-ore shipments from Brazil and Typhoon Lekima, which disrupted shipping in the East China Sea, leading to a rise in dry bulk freight costs. 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 million in AUM. It trades in a paltry volume of about 7,000 shares per day on average and charges a higher annual fee of 1.85%
VelocityShares Daily Long VIX Short-Term ETN (VIIX - Free Report) – Up 19.9%
The escalation in the trade tariff spat between the United States and China as well as other woes has increased market volatility and pushed up volatility products. This ETN is unpopular and illiquid with AUM of $26.3 million and average daily volume of 110,000 shares. It seeks to deliver the daily performance of the S&P 500 VIX Short-Term Futures Index, which provides investors with exposure to one or more maturities of futures contracts on the VIX, which reflects implied volatility of the S&P 500 Index at various points along the volatility forward curve. The note charges 89 bps in annual fees (read: How to Play Market Volatility With ETFs).
PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ - Free Report) – Up 15.1%
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, wins. It holds 20 securities in its basket with effective maturity and effective duration being 27.33 years each. This fund has $336.3 million in AUM and a light average daily volume of 32,000 shares. It charges 15 bps in annual fees and has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook (read: Play the Bond Bull Market With These ETFs).
AdvisorShares Dorsey Wright Short ETF (DWSH - Free Report) – Up 15.1%
With a steep decline in the stock market, this ETF climbed as 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 100 stocks in its basket and chares higher annual fee of 99 bps. The product trades in lower average daily volume of 24,000 shares and has accumulated $31.4 million in its asset base.
iShares MSCI Global Gold Miners ETF (RING - Free Report) – Up 13.4%
Gold continued to shine on safe-haven demand triggered by rising trade war tensions and global easy monetary policies. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market. While most of the ETFs have been rising this month, RING emerged as a winner. This ETF follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. Canadian firms take half of the portfolio, while United States, South Africa and Australia round out the top four with double-digit exposure each. RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. The fund has been able to manage assets worth $304.2 million and trades in good volume of 211,000 shares per day (read: How to Bet on Gold Surge With ETFs & Stocks).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>