The past week was all about heightening and easing in U.S.-Iran tensions. New Year’s Eve first witnessed an attack by Iran-backed militias on the U.S. Embassy in Baghdad, which was hit back by a U.S. drone strike near the Baghdad international airport that killed an Iranian military leader (read: 5 Multi-Asset ETFs to Counter Volatility & Enjoy Solid Yields).
Iran struck back by launching missiles at American bases in Iraq on Jan 7. Not only this, Iran “unintentionally” shot down the Ukrainian passenger plane Boeing 737-800 (read: Will Buffett's Rumored Faith Lift Boeing ETFs Despite Crashes?).
However, though tensions flared up earlier in the week, investors shrugged off concerns at the end of the week and stocks once again bounced back to hit highs. Against this backdrop, below we highlight a few ETFs that were the top performers last week.
Global X MSCI Nigeria ETF (NGE - Free Report) – Up 7.4%
Nigeria's stock exchange topped the chart last week, thanks to its central bank’s move. “The Central Bank of Nigeria is imposing a new risk management framework on users of the country’s payments systems, it announced on January 6.”
iShares MSCI Turkey ETF (TUR - Free Report) – Up 6.6%
Turkish stocks were a great beneficiary of de-escalation of the U.S.-Iran tensions. The Borsa Istanbul 100 Index surged 4.5% on Jan 9, marking its biggest spike since November 2015 and outperforming more than 90 other global equity benchmarks tracked by Bloomberg.
Cheaper valuation has propelled such outperformance. The Istanbul benchmark index trades at 6.5 times estimated earnings, compared with a multiple of 13.1 times for the MSCI Emerging Markets Index, per Bloomberg. Moreover, Turkey is a net oil importer and thus a thaw in oil price surge post de-escalation in geopolitical tensions helped Turkish stocks (read: Turkey ETF Hot This Thanksgiving: Will the Rally Last?).
Aberdeen Standard Physical Palladium Shares ETF (PALL - Free Report) – Up 6.4%
After a surge in 2019, palladium price momentum is showing no signs of a slowdown in 2020. The rally has mainly been backed by growing global demand and stagnating supply. “There are few well-established palladium mines” while demand has been on the rise on increased consumption of gasoline engines. Stringent emission control norms have been fueling demand for Palladium-using petrol-fueled cars as governments around the world look to fight climate change (read: 5 ETF Areas Up At Least 45% in 2019).
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) ) – Up 6.1%
Dry bulk spot rates, which were suffering for long, are seemingly bottoming out. “Spot rates are seen finding support if there are no major weather developments in Australia and Brazil,” per an article published on seekingalpha.
iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG - Free Report) ) – Up 6%
U.S.-Iran tensions have pushed upBrent crude to above $65 a barrel and sent U.S. gasoline futures to a nine-month high. This, in turn, would result in a rise in gas prices. As a result, demand for low-cost renewable fuels like ethanol has gone up.
This makes it clear why “Brazil, the world’s largest producer and exporter of sugar, will be using a still higher percentage of its sugarcane output to make ethanol.” The move, in turn would result in a decline in sugar production. Probably, this is why sugar prices have staged an uptrend of late.
Global X Cloud Computing ETF Global X Cloud Computing ETF (CLOU - Free Report) – Up 4.5%
Investors should note that whenever there is a rise in warfare-related risks, aerospace and defense as well as security-related stocks pick up. As a result, along with defense stocks and ETFs, cloud-computing and cybersecurity stocks rallied last week.
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