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ETF Performance Report: February


Stocks and exchange traded funds finally recovered to pre-2008 financial crisis levels over February, but volatility reared its ugly head in the last weeks of the month on Fed hints of unwinding accommodative measures and a fresh act in the Eurozone financial drama ahead of the sequestration deadline.

The Dow Jones Industrial Average added 1.7% over the past month. Meanwhile, the Nasdaq Composite inched 0.4% higher and the S&P 500 rose 1.2%.

The top performing non-leveraged ETFs over February include the Market Vectors Indonesia Small-Cap ETF (IDXJ) , iShares MSCI Indonesia Investable Market Index Fund (EIDO) and the Market Vectors Indonesia ETF (IDX) .

Despite fears associated with the political uncertainty surrounding the elections, Indonesia’s economic growth remains stable.

“We can feel that this year, the political atmosphere is hotter than it was ahead of the 2009 election. Business players and the bureaucrats must remain calm and not be affected by the current condition,” tycoon Chairul Tanjung, chairman of government think tank the National Economic Committee (KEN) and the recently established Indonesia Forum Foundation, said in a Jakarta Globe article.

“Indonesia’s economy is stably growing even though it is not the fastest-growing,” Bank Indonesia governor Darmin Nasution said in the article. “We are more stable than India and China. Our economy can withstand outside impact. Indonesia is entering its economic golden age but we tend to underestimate ourselves. Our economy is more mature now.”

In contrast, the worst performing non-leveraged ETFs include Global X Gold Explorers ETF (GLDX) , PureFunds ISE Junior Silver ETF (SILJ) and iShares MSCI Italy Capped ETF (EWI) .

At the start of the month, the markets slowly added onto the strong rally experienced over January on better economic data, such as gains in construction spending and manufacturing.

However, the trouble started after the Fed hinted at an eventual unwinding of accommodative policies due to the improving economic conditions. A stalemate in Italy’s elections threw the markets in turmoil as investors hunkered down on talks of another Eurozone crisis in the making. Moreover, market observers were getting jittery with no definitive resolution to the sequestration deadlines and potential cuts across government programs. [ETFs Spike Above 30% of Market Trading as Euro Fears Return]

Nevertheless, stocks strengthened in the final days of the month after Ben Bernanke reassured the markets that the Fed would not ease off stimulus, at least anytime soon.

For more information on ETF performance, visit our ETF performance reports category.

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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.