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Best & Worst ETFs of March

Sanghamitra Saha
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Defying historical outperformance, March 2018 turned out downbeat. As per moneychimp.com, there have been 43 years of a green March while returns have been in the red only in 25 years, with an average return of 1.11%, according to a consensus carried out from 1950 to 2017 .

One of the worst tech selloffs thanks to a crash in FANG stocks, Fed rate hike and trade war fears instigated by Trump’s levy of a host of import tariffs mainly against China and slightly higher inflationary fear led Wall Street to behave like a bear.

The three big ETFs, S&P 500-base fund SPDR S&P 500 ETF SPY lost more than 1.3%, Nasdaq-100 based fund PowerShares QQQ ETF QQQ shed about 2.5% and the Dow Jones based ETF SPDR Dow Jones Industrial Average ETF DIA retreated more than 1.7% in the last one month (as of Mar 29, 2018).

Not that there were no bulls in this downcast month. Below we highlight a few areas and the related ETFs that emerged winners in March and the areas that plunged more than the broader market.

Best-Performing Areas

iPath Global Carbon ETN GRN – Up 33.8%

The Barclays Global Carbon Index Total Return is designed to measure the performance of the most liquid carbon-related credit plans. Notably, carbon credits and carbon markets are a measure of national and international efforts to moderate the growth in the rise of greenhouse gases.

Investors should also note that the underlying index has low correlation with other key equity indexes like S&P 500, MSCI EAFE or MSCI Emerging Markets Net Total Return Index. This could be one of the main reasons why the ETN performed well when the broader market was downbeat.

iPath Bloomberg Cocoa SubTR ETN NIB – Up 14.8%

Dry weather hurt cocoa in Ivory Coast, the world’s largest producer. Notably, 70% of the global output hails from West African nations like Ghana and Ivory Coast. Plus, worries about diseases like cacao swollen shoot virus hurting production cocoa prices (read: 3 ETF Areas Up At Least 15% This Year).

VanEck Vectors Egypt ETF EGPT – Up 14.1%

The Egyptian market is on a tear lately and stocks had their best month since 2016 thanks to no election-related upheaval. Expectations are high that massive economic reforms are in the card as Abdel-Fattah El-Sisi is expected to be re-elected as president. The benchmark has gained for seven straight weeks, marking the lengthiest stretch of weekly advances since August 2014. March was the best month since the Egyptian currency was floated freely in November 2016, per Bloomberg.

Worst-Performing Areas

C-Tracks ETNs on the Miller/Howard MLP Fundamental Index Series B MLPE – Down 17.2%

MLPs were down in the month. The drive for high-yield MLPs probably eased in the month as the benchmark U.S. Treasury yield fell from 2.81% (as of Mar 1, 2018) to 2.74% (as of Mar 29, 2018) in March.

iPath Pure Beta Livestock ETN LSTK – Down 9.4%

The product reflects the returns that are potentially available through an unleveraged investment in two futures contracts on livestock commodities traded on U.S. exchanges. Beef production is higher year over year so far this year, with increased butchery of cattle. Higher supplies may have pulled down prices.

Barclays Inverse US Treasury Aggt ETN (TAPR – Down 6.8%

As yields gradually fell, this inverse bond ETN slid in the month. The product employs a strategy that tracks the sum of the returns of periodically rebalanced short positions in equal face values of each of the two-year, five-year, 10-year, long-bond and ultra-long U.S. Treasury futures contracts (read: ETF Tricks to Stave Off Rising Rate Risks This Halloween).

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SPDR-DJ IND AVG (DIA): ETF Research Reports
 
NASDAQ-100 SHRS (QQQ): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
VANECK-EGYPT (EGPT): ETF Research Reports
 
IPATH-GLBL CRBN (GRN): ETF Research Reports
 
IPATH-BB COCO (NIB): ETF Research Reports
 
IPATH-PB LIVSTK (LSTK): ETF Research Reports
 
C-TRK MLR/HWD (MLPE): ETF Research Reports
 
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