U.S. equities and stock exchange traded funds closed out the second quarter on a positive note. However, U.S. stocks still experienced their worst first half to a year since 2010 as interest rate hike speculation, slowing economic growth and the continued Greek volatility weighed on investments.
The Nasdaq Composite gained 4.7% and the S&P 500 was flat so far this year. Meanwhile, the Dow Jones Industrial Average dipped 1.1%.
The top non-leveraged ETF performers year-to-date include the Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (ASHS) up 50.6%, Market Vectors ChinaAMC SME-ChiNext ETF (CNXT) up 49.6% and ALPS Medical Breakthroughs ETF (SBIO) up 38.0%.
Chinese stocks and mainland A-shares ETFs are surging on looser monetary policies, easing and Beijing’s planned infrastructure projects to link its markets with Europe and Africa. China’s stock market also strengthened on prospects that the MSCI would include A-shares into its benchmark emerging market index, but the index provider did not outright state it would include more Chinese weight.
Meanwhile, SBIO, which focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials, is enjoying strong growth from new medical breakthroughs and greater merger and acquisition activity in the healthcare space. [Investors Were Prepared for the Biotech Breakout]
At the bottom end, the worst performing non-leveraged funds so far this year include the C-Tracks on Citi Volatility Index ETN (CVOL) down 42.0%, iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN (GAZ) down 37.8% and VelocityShares Daily Long VIX Short-Term ETN (VIIX) down 35.8%.
Over June, the Dow was down 2.2%, the Nasdaq declined 2.1% and the S&P 500 was 2.2% lower.
The equities market have been stuck in rather subdued trading for most of the month as traders weighed economic news on the likelihood of a Federal Reserve interest rate hike. While weak economic news weighed on sentiment, some traders still supported tepid gains on the prospect that the Fed would not feel pressured into hiking rates.
However, the unfolding Greek drama was the focus of the month, with markets swinging on hints that the country would payback creditors.
Greece, though, kept pushing off on debt payments to the International Monetary Fund and could now miss a payment entirely. The breakdown over talks with Greece triggered global risk-off selling. With Greece set to default on a 1.6 billion euro payment to the IMF, markets were buoyed somewhat in the last day of trading on speculation that an 11th hour deal could still be achieved.
Top performing non-leveraged exchange traded products over the past month include Teucrium Wheat Fund (WEAT) up 17.0%, Elements MLCX Grains Index ETN (GRU) up 14.3% and UBS ETRACS ISE Exclusively Homebuilders ETN (HOMX) up 12.6%.
The worst performing non-leveraged ETFs for the past month include CNXT down 26.9%, Global X FTSE Greece 20 ETF (GREK) down 22.1% and ASHS down 19.2%.
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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.