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Top and Flop ETFs of August: Metals Gain, Crops Crash

Sanghamitra Saha

The broader market was cast down by a host of geopolitical and political concerns in August. Though the month ended with the release of upbeat Q2 GDP growth data, the awful Hurricane Harvey, tensions with North Korea, Trump’s warnings of a Government shutdown, overvaluation concerns and some downbeat economic releases snapped the solid momentum of the broader market.

Against this backdrop, let’s discuss the ETF areas that still emerged winners in August and those that were hit hard. The following returns are of one month (as of Aug 31, 2017).


iPath Bloomberg Nickel Subindex Total Return ETN JJN — Up 17.3%

Nickel prices have rallied last month. The recent resurgence in prices was due to bargain hunting as the metal touched an 11-month low in May. Also, production in Philippines — one of the top nickel producers — dropped 15% in the first five months of this year. However, the outlook for nickel investing is still murky with possibilities of higher production in Indonesia and Philippines (read: Philippines GDP Up In Q2: ETFs in Focus).

Global X China Materials ETF CHIM — Up 13.3%

China ETFs have been steady in the month. The Chinese economy grew 6.9% year over year in Q2 of 2017, marking the same pace as in the previous period but higher than market expectations of 6.8% growth. China’s manufacturing activity has been in a decent shape helped by improving exports.

BioShares Biotechnology Clinical Trials Fund BBC — Up 12.4%

Biotech ETFs especially those with a focus on cancer therapy staged a great show in August especially on Gilead’s GILD buyout announcement of the clinical-stage biopharmaceutical company Kite pharma KITE. Most biotech funds were on a tear in the month (read: Biotech ETFs Soar on Gilead-Kite Deal).

Global X Brazil Consumer ETF BRAQ — Up 12.1%

Brazil’s GDP is likely to expand 0.4% in 2017, according to a central bank survey of economists, after sliding 8% over the prior two years. This bullish comment led investors to bet big on Brazilian consumers as investments still lag. This helped the fund BRAQ and more domestically focused funds like iShares MSCI Brazil Small-Cap ETF EWZS.

iPath Pure Beta Aluminum ETN FOIL Up 10.1%

Aluminum prices crossed over $2,000 a metric ton for the first time since 2014. The move came on the back of China’s efforts to lower illegal or polluting capacity. The news of authorities in Shandong — China’s top aluminum producing province — ordering 3.21 million tons of illegal smelting capacity to be closed by July end may have caused the spike (read: 3 Red Hot Base Metal ETFs).

As per the source, the Shandong province announced that it would ask aluminum producers that fall short of emissions standards to suspend operations. As a result, the possibility of an output crunch led to a boost in prices.


SPDR S&P Oil & Gas Equipment & Services ETF XES — Down 12.9%

Oil services ETFs were down in the month on lower oil prices.

Teucrium Wheat Fund WEAT — Down 12.4%

Wheat prices were under pressure on higher supplies from Russia. The U.S. Department of Agriculture beefed up its estimate global wheat production on abundant Russian supplies.

iPath Dow Jones-UBS Coffee ETN JO — Down 9.6%

A subdued dollar which made the Brazilian real pricier made farmers skeptical of selling their beans due to lower profit margins. Also, expectations of higher global arabica surplus in the 2016-2017 season, caused a slide in coffee prices.

Pacer US Small Cap Cash Cows 100 ETF CALF — Down 8.3%

Small-caps were out of favor for most of the month. Weak earnings, ebbing prospects of a Trump bump and weakness in the greenback weighed on this section (read: 3 Reasons to Dump Small-Cap ETFs Now).

Teucrium Corn Fund CORN — Down 7.0%

The world’s largest corn producing nation — the U.S. — is expected to produce bigger-than-expected harvests, as per Bloomberg. Needless to say, this weighed on corn prices.