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Top & Flop ETFs of Last Week

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Last week was upbeat for the broader market. The S&P 500 (up 0.8%), the Nasdaq (up 0.6%) and the Dow Jones (up 1%) were in the positive territory and scaled new highs as well (read: Top-Ranked Nasdaq-100 ETF at New High: 5 Best Stocks).

In any case, optimism has been sweeping the broader market since mid-October when the United States and China announced the phase-one trade deal after months of wrangling. Decent earnings releases, better-than-expected U.S. GDP data for the third quarter, easy global monetary policy and the extension of the Brexit deadline have also been aiding the market.

The rally reached a new level on Nov 12 after President Donald Trump suggested that a trade deal with China could see the light of the day soon. Against this backdrop, we highlight the best and worst-performing ETFs of last week.

Best ETFs

iPath Bloomberg Cocoa Subindex Total Return ETN NIB — Up 8.9%

Strengthening global demand for cocoa has been pushing prices higher.  The holiday season is probably driving demand as it is a season for baked and other treats and is thus exerting upward pricing pressure on confection and beverage commodities.

Global X MSCI Nigeria ETF NGE — Up 7.2%

The Nigerian stock market has been rallying hard in November on a few regulatory changes. The central bank of Nigeria has instructed banks to maintain a loan to deposit ratio of 60% with a tilt toward SMEs. By December, the LDR will be raised to 65%, indicating more liquidity at SMEs, which in turn should boost economic activity. Nigerian stocks also offer compelling valuation with some commercial banks with earnings yield as high as 35%.

Global X MSCI Pakistan ETF PAK — Up 6.3%

Since the start of October, Pakistan stocks have been rallying, making the country’s stock market the best-performing one in the world. Per Pakistan Stock Exchange’s former chairman Arif Habib, “the success of stabilisation measures, which was also endorsed by the International Monetary Fund (IMF), undervalued blue-chip stocks, growth in the profits of four major sectors — oil and gas exploration and production, power, textile and banking — and the MSCI retaining Pakistan’s place on its index” have been acting as tailwinds.

WisdomTree Cloud Computing Fund WCLD — Up 4.2%

The cloud computing space is heating up on higher demand from enterprises. Key industry players like Amazon (AMZN - Free Report) , Microsoft MSFT, Alphabet's GOOGL Google and IBM IBM have been ramping up cloud partnerships (read: Will These ETFs Enjoy the Halloween Effect This Time?).

Microsoft recently clinched Pentagon's $10-billion JEDI cloud-computing contract. Per IDC, 70% of enterprises will integrate their public and private clouds by deploying unified hybrid and multi-cloud management technologies, tools, and processes by 2022.

Worst ETFs

Global X Cannabis ETF POTX — Down 18.2%

The already-underperforming zone cannabis stocks had an awful week. Industry behemoth Canopy Growth (CGC) posted a quarterly loss of 82 cents per share compared with the Zacks Consensus Estimate of a loss of 27 cents. This compares to a loss of 76 cents per share a year ago. Revenues of $58.03 million missed the Zacks Consensus Estimate by 24.73%. Other key cannabis companies came up with mixed results. Overall, the earnings underperformance dealt a blow to the space. 

Invesco China Real Estate ETF TAO — Down 5.5%

Still-lingering uncertainty in the U.S.-China trade deal and subdued Chinese economic data have probably weighed on the fund.

iShares MSCI Hong Kong ETF EWH) — Down 5.5%

The Hong Kong's Hang Seng Index slid nearly 4.8% last week, marking the Hang Seng's steepest weekly drop since August. Violent protests caused the slump.

VanEck Vectors Coal ETF KOL — Down 4.9%

The underlying MVIS Global Coal Index tracks the overall performance of companies involved in coal operation, transportation of coal, from production of coal mining equipment as well as from storage and trade. The space has been under pressure for long, thanks to increasing global focus on green energy. The European Union recently cut €2 billion of yearly investments for fossil fuel projects.

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