Best ETFs of Last Week
Wall Street was downbeat last week. Each of the key equity gadgets — the S&P 500 (down 4.7%), the Dow Jones (down 4%), the Nasdaq Composite (down 5.1%) and the Russell 2000 (down 6.6%) — lost last week. Rising rate worries and recessionary fears were the key concerns.
The benchmark S&P 500 dropped 1.7% on Friday, hitting a fresh 2022 low. The Dow Jones Industrial Average retreated 1.6% on Sep 23, briefly falling into the bear market territory at one point during the session and closing at a 2022 low. The technology-heavy Nasdaq Composite fell 1.8%, while Russell 2000 was off 2.5%.
Meanwhile, the 2-year U.S. Treasury note notched past a 15-year high of 4.2% and the 10-year U.S. Treasury held near 3.7%, marking the highest level since 2010, per a Yahoo Finance article. In commodity markets, crude oil fell sharply, with United States Oil Fund, LP USO falling 5.3% on Sep 23 and losing 6.6% for the week. Recessionary fears weighed on the demand for oil and gas.
Last week, Federal Reserve officials raised interest rates by 75 basis points three times in a row and Chair Jerome Powell indicated that policymakers were ready to digest the economic recession in order to tame inflation. Central banks around the world have recently been on this path.
The Bank of England hiked its key interest rate to 2.25% from 1.75% on Thursday and said it would continue to "respond forcefully, as necessary" to tame inflation, despite the economic concerns. The BoE estimates Britain's economy will shrink 0.1% in the third quarter.
The Central Bank of Sweden announced a 100 basis points hike in interest rates last week, saying that the inflation was too stubborn. Despite the 100-bps hike, the Riksbank is still behind its inflation target by 0.25%, which indicates further rate hikes. The Swiss central bank also hiked rates by 75 basis points to 0.5% Thursday. The move brought an end to an era of negative rates in Europe.
Rising yields globally particularly hurt valuations of companies in the growth sector (e.g. technology, biotech and Internet), which have high expected future earnings. Against this backdrop, below we highlight a few top-performing ETFs of last week.
ETFs in Focus
Simplify Tail Risk Strategy ETF CYA – Up 20.3%
This ETF is active and does not track a benchmark. The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs.
The Short De-Spac ETF SOGU – Up 14.3%
This ETF is active and does not track a benchmark. The AXS Short De-SPAC Daily ETF seeks daily inverse investment results, before fees and expenses, that correspond to the inverse of the return of the De-SPAC Index for a single day by entering into swap agreements and by purchasing put options on securities in the Index.
Breakwave Dry Bulk Shipping ETF BDRY – Up 13.2%
The Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure rates for shipping dry bulk freight. The Breakwave Dry Bulk Shipping ETF seeks to provide investors with exposure to the daily change in the price of dry bulk freight futures, before expenses and liabilities.
Tuttle Capital Short Innovation ETF SARK – Up 12.3%
This ETF is active and does not track a benchmark. The AXS Short Innovation Daily ETF seeks the daily inverse investment results and is intended to be used as a short-term trading vehicle.
Advisorshares D.W. Short ETF DWSH – Up 8.7%
This ETF is active and does not track a benchmark. The AdvisorShares Dorsey Wright Short ETF is actively-managed with an investment focus that involves buying securities that have appreciated in price more than the other securities in the investment universe and holding those securities until they underperform.
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United States Oil ETF (USO): ETF Research Reports
Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports
AdvisorShares Dorsey Wright Short ETF (DWSH): ETF Research Reports
AXS Short DeSPAC Daily ETF (SOGU): ETF Research Reports
Simplify Tail Risk Strategy ETF (CYA): ETF Research Reports
AXS Short Innovation Daily ETF (SARK): ETF Research Reports
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