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ETF Stats Reveal Market Sentment for Second Half of 2013


The first half of 2013 is behind us and the exchange traded fund industry has managed to maintain growth. The industry gathered about $73 billion over the past six months.

A way to approach one’s  investing strategy is to look at the basic trends that prevailed over the past few months. While this is not a guidebook as to what will happen over the next 6 months of the year, it can indicate possible market movements and the general sentiment going forward.

Eric Balchunas for Bloomberg looks back at the past 6 months and analyzes basic trends taking place in the ETF industry. He reports on the following 5 ETF strategies and what they indicate going forward.

The SPDR Gold Trust (GLD)   has been reduced down to half of the fund it was last year. Previously, GLD touted $76 billion and was on a tear as the biggest ETF in the industry. Today, the ETF has $38 billion in assets and is now the fifth-largest fund in the world. Still, GLD has a 158% return since the start of trading, which compares to the S&P 500’s 63% return for the same time period. [Gold ETF Investors Test the Waters After Huge Q2 Sell-Off]

Conversely, ETFs that track Japan equities have been on fire in 2013, attracting about $13 billion in new assets under management. The biggest money maker was an ETF that hedges the yen exposure out of equity returns. The WisdomTree Japan Hedged Equity ETF (DXJ)   received the lion’s share of assets poured into Japan equities and returned 22% year-to-date. The $8.1 billion in inflows has since beat out all other ETFs this year. [Why Retail Investors Still Like Japan ETFs]

The threat of rising interest rates and the caution investors have taken to protect against this is evidenced through the $3.2 billion in new inflows in the Vanguard Short-Term Debt ETF (BSV) . The ETF has a negative total return and a small yield but the short-term government and corporate debt provides investors the closest thing to safe haven for their capital. [ETF Spotlight: Vanguard Short Duration Bond]

Clean energy has proven most wrong who thought the run-up in focused stocks and ETFs would be short, reports Balchunas. The Guggenheim Solar Energy ETF (TAN) is up 51.8% this year, and is the top-performing ETF. TAN is still down  89% since its launch in 2008.

Lastly, frontier markets have outpaced emerging market performance from a stock market perspective. The iShares Frontier 100 ETF (FM) has earned 10.8%, compared to a 10% loss that the iShares MSCI Emerging Markets ETF (EEM) has taken. [A Frontier ETF That's Outpacing Emerging Markets]

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.