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ETF Performance Report: June

tlydon@globaltrend.com (Tom Lydon)

Stock ETFs moved higher in June in volatile action and the S&P 500 logged its best month since October despite persistent worries over Europe’s debt crisis.

Equity and commodity ETFs capped the second quarter with a massive risk-on rally Friday as investors cheered support for Spain’s banks announced at a European summit. [ETFs End Q2 with a Bang]

The Dow Jones Industrial Average increased 3.7% over June. The S&P 500 rose 3.7% and the Nasdaq Composite added 3.4%

Right off the bat, weak jobs and factory order data weighed on stocks at the start of the month.

While the ongoing Eurozone crisis hanged over markets, investors remained hopeful as European leaders were beginning to seriously discuss ways to mitigate the potential implosion and provide additional aid to ailing member states, especially with Spain sounding alarms.

Despite no real commitment to another round of quantitative easing from the Federal Reserve, though the Fed did extend its “Operation Twist,” the markets began to strengthen on the Chinese rate cut and bailout prospects in Spain. Additionally, coordinated actions from global central banks to help shore up the problems in Greece also helped international markets. [Are Treasury Bond ETFs Bubblicious?]

The Eurozone dodged a bullet when a pro-bailout party come out on top. Meanwhile, the markets shifted back to Spain and Italy’s higher and potentially unsustainable interest rates. Consequently, banks tied to troubled debt were downgraded. [What’s Next for the Greece ETF After Election, Rally?]

Nevertheless, the month ended on an upbeat note after a fruitful E.U. summit provided strong support for any ailing states.

The benchmark 10-year Treasury yields bounced back after dropping below 1.5%. The 10-year yields ended at about 1.65%. Gold continues to loss strength, dropping from $1,600 at the start of June to about $1,550. Meanwhile, West Texas Intermediate crude also weakened over the month, dipping below $80 a barrel for the first time since last October.

Top performing ETFs over June include those that track soft commodities, emerging market countries, European countries and natural gas.

For more information on ETF performances, visit our ETF performance reports categoryClick here to see the full June performance report.

Visit our ETF Analyzer for the most up-to-date ETF performance numbers.

Max Chen contributed to this article.