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Best and Worst ETFs of Q2

Sanghamitra Saha

The second quarter of Q2 can be vital to investors for many reasons starting from global policy tightening talks to wavering Trump trade and key elections in an otherwise-improving Europe. Though the broader market was pretty upbeat in the quarter, international markets, especially Europe, clearly beat the U.S. (read: Trump Slump to Oil Slide: Top ETF Stories of First-Half 2017).

All world ETF iShares MSCI ACWI ETF ACWI added 4.7% in Q2 while key U.S. ETF SPDR S&P 500 ETF SPY advanced about 3.3%. Europe ETF Vanguard FTSE Europe ETF VGK jumped 8.9%, emerging market fund iShares MSCI Emerging Markets ETF EEM gained about 5%, iShares Asia 50 ETF AIA spurted 8% and iShares MSCI All Country Asia ex Japan ETF AAXJ added over 6.8%.

Against this backdrop, we highlight the ETF options that topped in the quarter and the ones that flopped.


Global X MSCI Greece ETF GREK – Up 26.3%

The Greek economy grew 0.4% sequentially in the first quarter of 2017, higher than preliminary estimates of 0.1% shrinkage and a downwardly revised 1.1% decline in the previous period. The economy’s credit rating recently got an upgrade from Moody’s, following which its 10-year borrowing costs plunged to their lowest level since 2009.

“Moody's expects to see growth this year and next, after three years of stagnation and a cumulative loss in output of more than 27 percent since the onset of Greece's crisis," the agency said as per the article published on CNBC. As a result, GREK gained 26.3% in the last three months.

ARK Web x.0 ETF ARKW – Up 21.0%

The fund focuses on companies tied to innovation and “expected to benefit from shifting the bases of technology infrastructure to the cloud, enabling mobile, new and local services.” It “gives to game-changing companiesin some of the most promising areas of the economy.” Since the second quarter was all about the tech sector rally in the U.S., this fund had every reason to outperform. An almost similar-themed product ARK Innovation ETF ARKK also added 20.5% in the fund (read: Top Sector ETFs of 1H).

Amplify Online Retail ETF IBUY – Up 19.9%

As of now, online retail sales make up one tenth of total retail and about 5% of annual e-commerce revenue in the U.S. The space is developing fast with increased usage of smartphones and other mobile Internet devices. More than the U.S., the real growth opportunities lay in the under-penetrated emerging markets. Overall, its fast rise has made this fund a winner (read: 5 ETFs & Stocks: Silver Lining in Soft May Retail Sales).


iPath Bloomberg Natural Gas SubTR ETN GAZ – Down 30.7%

Overall, energy prices underperformed in Q2 on solid U.S. output. Natural gas prices were also victims of the demand-supply imbalance (read: Top & Flop Zones of First Half and Their ETFs).

Rex VolMaxx Long VIX Weekly Futures Strategy ETF VMAX – Down 30.1%

The fund provides long exposure to the VIX Index by holding a combination of VIX futures contracts that are near expiration. Since volatility touched a multi-year low in Q2, this volatility based fund was badly hurt.

iPath Pure Beta Sugar ETN SGAR – Down 29.5%

Global sugar trading was in dire straits in Q2. “Apparent weaker sugar consumption" in India, which is the biggest consumer, was the main reason for the price fall. Second, ethanol is co-produced by sugar mills as sugar cane juice us needed to produce ethanol. With oil price dropping, price of ethanol — which is often used to fuel cars — also declined. This curbed the price of sugar too. Also, “higher duties on sugar imports to top buyer China” hurt sugar prices as per an article published on agrimoney.

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SPDR-SP 500 TR (SPY): ETF Research Reports
ISHARS-EMG MKT (EEM): ETF Research Reports
ARK- WEB XO ETF (ARKW): ETF Research Reports
GLBL-X/F GREC20 (GREK): ETF Research Reports
ISHRS-MSCI ACWI (ACWI): ETF Research Reports
REX-L VIX WFS (VMAX): ETF Research Reports
AMPL-ONLN RETL (IBUY): ETF Research Reports
IPATH-BB NGAS (GAZ): ETF Research Reports
ISHARS-MS AS-JP (AAXJ): ETF Research Reports
IPATH-PB SUGAR (SGAR): ETF Research Reports
VANGD-FTSE EUR (VGK): ETF Research Reports
ISHARS-ASIA 50 (AIA): ETF Research Reports
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