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ETF Performance Report: October


Despite finishing on a down note, the equities market and stock exchange traded funds closed out their best month in four years.

Over October, the Dow Jones Industrial Average increased 8.5%, the Nasdaq Composite advanced 9.3% and the S&P 500 rose 8.3%.

The best performing non-leveraged ETFs over the past month include Global X MSCI Argentina ETF (ARGT) up 24.8%, Market Vectors Solar Energy ETF (KWT) up 23.5% and KraneShares CSI China Internet Fund (KWEB) up 22.9%.

A pro-business Conservative has unexpectedly gained traction in the Argentinian presidential elections, bolstering Argentina’s markets and country-specific ETF. [Argentina ETF Receives An Unexpected Political Tailwind]

Solar stocks rallied in October as value investors saw an opportunity to capitalize on attractive long-term fundamentals. For instance, according to Treasa Ni Chonghaile, co-manager of the Calvert Global Energy Solutions fund, the U.S. solar industry is expected to double in 2016 as it benefits from tax credits, reports Dimitra DeFotis for Barron’s. [ETFs For The Environmentally Conscious]

After the steep sell-off in Chinese equities, investors were returning to China and pushed Chinese stocks toward their first monthly gain since May as the government’s attempts to stabilize markets may finally be taking effect.

The worst performing non-leveraged exchange traded products over the past month include the C-Tracks on Citi Volatility Index ETN (CVOL) down 51.5%, ProShares VIX Short-Term Futures ETF (VIXY) down 31.2% and VelocityShares Daily Long VIX Short-Term ETN (VIIX) down 31.0%.

The equities market steadily regained ground over October, with improved automobile sales supporting gains at the start of the month. A surprisingly weak September employment report added to speculation that the Fed will maintain accommodative measures.

Earnings season provided some surprise results, maintaining forward momentum across the board.

The housing market was also showing strength with rising prices and accelerating new home construction as the growing economy and rising employment rates help bolster home sales.

Meanwhile, overseas central banks held on to an accommodative stance, with the People’s Bank of China issued a surprise rate cut and the European Central Bank signaled a more dovish stance.

Toward the end of the month, the Federal Open Market Committee revealed that a December interest rate hike is still in play. The markets sold off on a knee-jerk reaction but quickly rose as the Federal Reserve statement provided greater clarity on monetary policy.

While the markets ended October on a sour note, the S&P 500 saw its best monthly advance since October 2011.

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.