This past year has been marked by uncertainty (though nothing compared to recent years), prompting investors to return in droves from safe haven accounts to the U.S. stock market. Investors have their eyes fixed on major indexes and other indicators to judge the overall health of our economy, but another judge of booming markets is watching which ETFs have taken off since last year. Needless to say, some industries have evolved with the changing economic climate, while others have fallen far behind [For ETF industry news, sign up for the free ETFdb Newsletter].
Below, we highlight a handful of ETFs that have surged over the past year (note that inverse and leveraged ETFs are excluded from this list; see the best and worst ETFs over the past 52 weeks including leveraged and inverse):
|ITB||Dow Jones US Home Construction Index Fund||99.8%|
|XHB||SPDR Homebuilders ETF||76.9%|
|BBH||Market Vectors Biotech ETF||61.1%|
|XBI||SPDR S&P Biotech ETF||46.7%|
- Dow Jones U.S. Home Construction Index Fund (ITB, A-), Up 99.8%: Though the homebuilding industry has perhaps not fully recovered from the most recent recession, it has done pretty well over the past year. This ETF is linked to an index that holds about 28 homebuilding companies, as well as stocks tangentially related to new homes (such as Home Depot and Lowe’s). It’s worth noting that ITB has beat the other homebuilder ETFs by a wide margin over the past year.
- SPDR Homebuilders ETF (XHB, A+), Up 76.9% : Another ETF with this focus has broken into the top five, offering more proof that the homebuilding industry is regaining momentum. The ETF tracks 36 equal weighted stocks, with holdings in major companies like Whirlpool and USG Corp that have survived the housing crisis and are looking for a comeback.
- Market Vectors Biotech ETF (BBH, B+), Up 61.1%: Offering investors an opportunity to benefit from companies developing treatments for various health conditions, these stocks can be tricky to navigate alone, but bundled into an ETF they can have dramatic returns. This year-old fund tracks the overall performance of 25 of the largest publicly-traded biotech companies, such as Amgen, Gilead and Biogen [see Baby Boomers ETFdb Portfolio].
- SPDR S&P Biotech ETF (XBI, B+), Up 46.7%: It seems that biotech is the clear majority in the top five 52-week returns, even if none of the funds take first. State Street’s biotech solution only carries about 50 securities (many of which overlap with IBB and BBH), but unlike the other biotech funds on this list, it is an equally weighted ETF [see Free 7 Simple & Cheap All-ETF Portfolios].
- NASDAQ Biotechnology (IBB, A-), Up 43.7%: This eleven-year-old fund is not only having a good year, it’s having a great five years with a return of almost 60% since 2007. This ETF is made up of 116 biotech and pharmaceutical companies, and it shares many of the same top holdings as BBH.
Below are five of the biggest non-leveraged losers over the past year:
|CVOL||C-Tracks ETN Volatility Index Total Return||-93.9%|
|VXX||S&P 500 VIX Short-Term Futures ETN||-84.6%|
|KWT||Market Vectors Solar Energy ETF||-49.3%|
|JO||Dow Jones-UBS Coffee ETN||-42.2%|
|GAZ||DJ-UBS Natural Gas Subindex Total Return ETN||-31.6%|
- C-Tracks ETN Citi Volatility Index Total Return (CVOL, C+), Down 92.7%: The biggest loser this year was CVOL, which was able to lose almost 100% over the last 52 weeks all without leverage. The index this fund tracks is designed to measure directional exposure to the implied volatility of large cap U.S. stocks, but sadly for Citigroup, U.S. stocks didn’t take any major hits this year.
- S&P 500 VIX Short-Term Futures ETN (VXX, B+), Down 83.1%: By offering exposure to a daily rolling long position in VIX futures contracts, this ETN was meant to imply the volatility of the S&P alone. Instead it pointed out to speculative investors just how much our economy has recovered over the past 52 weeks. Other volatility funds like VXX and VIXY have also done poorly over time [see our Low Volatility ETFdb Portfolio].
- Market Vectors Solar Energy ETF (KWT, C), Down 53.4% : While alternative energy might be good for the environment, it has proved problematic for investors. The index this ETF follows provides exposure to publicly-traded companies from around the world that derive at least 66% of their revenues from solar power products and services, which have not performed well since the global economic slowdown [see 1,400+ ETFdb Realtime Ratings].
- Dow Jones-UBS Coffee ETF (JO, B-), Down 83.1%: This narrow focus ETN is a single commodity sub-index that currently consists of one futures contract at a time for the commodity coffee. With the whole world obsessed with this caffeine fix it may come as a surprise that JO and CAFE have performed so poorly over the last 52 weeks.
- DJ-UBS Natural Gas Subindex Total Return ETN (GAZ, B), Down 93.4%: This fund can make or break an investor, depending on when its bought and sold, but it has never been considered a long-term investment. By holding a single natural gas contract at a time, it really is about the luck of the draw with this fund.
Disclosure: No positions at time of writing.