Despite some close calls over March, especially with new rumblings out of Europe and Cyprus, the equities markets and stock exchange traded funds steered back into a bullish streak, closing the month and first quarter on historical highs.
The Dow Jones Industrial Average posted a 11.6% gain over the first quarter. Meanwhile, the Nasdaq Composite increased 9.1% and the S&P 500 rose 10.8%.
Over March, the Dow was 3.3% higher, the Nasdaq was up 3.0% and the S&P 500 gained 3.3%.
On the last trading day of the quarter, the S&P 500 punched through its pre-financial crisis closing high of 1,565. Three weeks earlier, the Dow Jones Industrial Average topped its own 2007 record.
The top non-leveraged ETFs in the first quarter include the Market Vectors Indonesia Small-Cap ETF (IDXJ) up 21.2%, SPDR S&P Transportation ETF (XTN) and KEYnotes First Trust Enhanced 130/30 Large Cap ETN (JFT) up 21.1%.
Improved earnings, investment growth and expanding domestic consumption have all supported the rally in Indonesian stocks. [Why Indonesia ETFs are on a Tear]
The transportation sector, a barometer for the health of the U.S. economy, has been paving the way in the current rally as the sector broke through its all-time highs before the broader Dow. [ETF Chart of the Day: Dow Jones Transportation Average]
The KEYnotes 130/30 large cap ETN tracks 2,500 U.S. stocks but follows a 130/30 long/short strategy that includes a 130% long position in certain large-cap stocks while going short 30% other large-cap stocks.
Natural gas futures have been gaining momentum on a combination of lower-than-expected inventories and persistently cold weather conditions. [Natural Gas ETFs to Play the Rally]
March started off with no real guidance as sequestration talks came to a standstill and automatic Federal spending cuts started to go into effect.
Nevertheless, stocks remained undeterred, listlessly edging higher with no immediate threat to the economy. As equities moved higher, the Dow broke through its 2007 high and continued to extend its record winning streak on positive economic news.
After 10 consecutive gains in the Dow, the longest streak since 1996, stocks pulled back in mid-March on Eurozone plans to impose sweeping taxes on all Cypriot savings accounts to pay for a bailout. In the last few weeks of March, stocks regained their footing as the Eurozone scrambled to put together a rescue package and positive U.S. economic news buoyed the markets.
Over the first quarter, the worst performing non-leveraged ETFs include C-Tracks on Citi Volatility Index ETN (CVOL) down 50.1%, VelocityShares Dialy Long VIX Short-Term ETN (VIIX) down 36.3% and iPath S&P 500 VIX Short-Term Futures ETN (VXX) down 36.1%.
The worst performing non-leveraged ETFs in March include PowerShares DB Base Metals Long ETN (BDG) down 23.9%, VIIX down 20.8% and CVOL down 20.8%.
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Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
- Dow Jones Industrial Average