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Top and Flop ETFs of Last Week

Sweta Killa
Anadarko Petroleum (APC) is seeing favorable earnings estimate revision activity and has a positive Zacks Earnings ESP heading into earnings season.

Wall Street witnessed wild swings last week primarily due to soaring U.S. yields that took a toll on investors’ appetite. Higher rates will likely erode corporate profits and slow down economic growth going ahead, making investors less willing to pay high prices for stocks. Additionally, the ongoing trade war between the United States and its major allies has added to the woes as it is the biggest threat to economic growth.

The combination of other factors like ongoing troubles in emerging markets, Iran oil sanctions, another budget deadline and the mid-term election in November are weighing on stocks. As such, the three major indices have registered week performances since March with Dow Jones and S&P 500 losing 4% each while Nasdaq Composite Index falling 3.7%.

The sluggish trading is likely to continue at the start of this week, given that the disappearance of Washington Post columnist Jamal Khashoggi resulted in fear of U.S. sanctions - another blow to the U.S. market (read: 4 ETFs to Play Key Events in Q4).

Still, there are few winners in the stock world buoyed by booming domestic growth and surging corporate profits that are keeping the momentum in stocks alive. Historic tax cuts, higher government spending and deregulation are spurring growth. Robust job gains, growing wages, record low unemployment and an 18-year high consumer confidence are also driving the longest nine-year bull run.

Given this, we have highlighted the best and worst performing ETFs of the last week:

Best ETFs

iPath Series B S&P 500 VIX Short-Term Futures ETN VXXB

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 $126.4 million since its debut in January and charges 89 bps in annual fees. It trades in volume of 13,000 shares a day on average (read: Top ETFs Launches of 2018 in Terms of AUM).

ELEMENTS SPECTRUM Large Cap U.S. Sector Momentum Index ETN EEH

EEH gained 9.7% last week. The fund’s unique momentum strategy of increasing exposure to the sub-indices that outperformed the S&P 500 and reducing allocations to the underperformers paid off. The note comes with a cash payment at scheduled maturity or early redemption based on the performance of the SPECTRUM Large Cap U.S. Sector Momentum Index and is issued in the USA by Swedish Export Credit Corp. This ETN is unpopular and illiquid with $1.2 million in AUM and average daily volume of under 1,000 shares. It has expense ratio of 0.75%.

iShares MSCI Global Gold Miners ETF RING

Gold is viewed as safe haven investment and thus investors are flocking to this asset. Acting as leveraged plays on underlying metal price, gold miners witnessed more gains than their bullion cousins. As most of the gold mining ETFs rose last week, RING stole the show, climbing 7%. This ETF follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 36 securities in its portfolio with double-digit exposure each to the top two firms. Canadian firms take half of the portfolio, while United States and Australia round out the top three with a double-digit exposure each. RING charges 39 bps in fees and expenses. The fund has been able to manage assets worth $204.5 million and trades in a good volume of 255,000 shares per day (read: Wall Street Sees Worst Day in 8 Months: ETF Winners & Losers).

Worst ETFs

SPDR S&P Technology Hardware ETF XTH

The hot and soaring technology segment was the worst victim of the broad market sell-off as investors shifted their focus away from growth-fueled stocks to value and defensive ones. While there are many tech ETFs that have piled up huge losses, XTH lost the most, declining 10.5% last week. This fund targets the hardware segment of the technology market by tracking the S&P Technology Hardware Select Industry Index. It holds 43 stocks in its basket and charges 35 bps in annual fees. The ETF has accumulated $3.5 million in its asset base and trades in paltry volume of under 1,000 shares. It has a Zacks ETF Rank #2 (Buy) (read: 5 Tech ETFs That Tumbled Most on Broad Market Rout).

Invesco S&P SmallCap Materials ETF PSCM

This fund targets the small-cap segment of the material sector by tracking the S&P SmallCap 600 Capped Materials Index. It holds 34 securities in its basket with each accounting for less than 10% share. The ETF has gathered $26.6 million in its asset base and has an expense ratio of 0.29%. Volume is low with 3,000 shares exchanged a day on average. It has shed 8.1% in the same time period and has a Zacks ETF Rank #3 (Hold).

Invesco DWA Industrials Momentum ETF PRN

This fund provides exposure to 41 companies by tracking the Dorsey Wright Industrials Technical Leaders Index. It is well balanced across each security with none accounting for more than 4.2% share in the basket. In terms of industrial exposure, aerospace and defense, IT services, and road & rail make up the top three. The fund has amassed $106.6 million in its asset base and charges 60 bps in annual fees. It trades in average daily volume of 5,000 shares and has a Zacks ETF Rank #2 (read: Time to Buy Industrial ETFs on Value?).

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