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Top and Flop ETFs of Last Week

Sanghamitra Saha

Last week was all about the Fed meeting and U.S.-Iran tensions. The Fed has indicated that it will cut rates this year if the economic situation worsens, while Iran downed U.S. military drone. Needless to say, safe havens rallied while stocks were also at record highs thanks to the central bank’s dovish comments (read:  S&P 500 Hits New High: 10 Top-Performing ETFs YTD).

Against this backdrop, below we highlight ETF winners and losers of the last week.

Best ETFs

ETFMG Prime Junior Silver ETF (SILJ) – Up 11.9%

A subdued dollar amid cues of Fed policy easing has brightened the appeal for commodity investing. Not only the Fed, the ECB has also offered hints of more monetary stimulus (should the need be) of late. Several other global central banks are practicing easy money policies in recent times. All these factors have propelled the metal investing and mining stocks higher.

SPDR S&P Oil & Gas Equipment & Services ETF (XES) – Up 10.9%

Geopolitical tension between Iran and the United States flared up after the United States and Iranian officials said that the latter downed a U.S. military drone near the Strait of Hormuz. In any case, both countries have been at loggerheads for about a year (read: Iran Downs U.S. Drone: Sector ETFs & Stocks to Gain).

Oil prices have been steady these days thanks to a host of factors like repeated assaults near the Strait of Hormuz, a subdued greenback in the wake of dovish Fed hints and the likely extension of the OPEC output cut deal. Along with the entire energy sector, XES has also benefited.

ALPS Sprott Junior Gold Miners ETF (SGDJ) – Up 9.8%

Flare-up in geopolitical risks always benefits the safe-haven asset gold. Added to this, the metal has benefited out of a dovish Fed in recent trading sessions. Gold mining stocks normally act as a leveraged play of the underlying asset. Gold mining ETFs like SGDJ, are thus clear winners (read: ETF Winners & Losers Post Fed Meet).

Worst ETFs

iPath Series B Bloomberg Natural Gas Subindex Total ReturnSM ETN (GAZ) – Down 9.7%

U.S. natural gas is at its lowest price level since May 2016. The U.S. Energy Information Administration reported last week that domestic supplies of natural gas rose by 115 billion cubic feet for the week ended Jun 14, beating the average forecast of an increase of 104 billion cubic feet. Four-year low natural gas prices aren’t likely to turn around until there is some forecast of inclement weather, which can boost demand for the commodity.

iShares U.S. Home Construction ETF (ITB) – Down 2.5%

The housing market has been struggling for five quarters in a row. U.S. homebuilders recorded the first slump this year despite declining mortgage rates. Per the monthly National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder confidence dropped to 64 in June from 66 in May and 68 a year ago. Raymond James analyst Buck Horne noted last week that valuation is pretty high in the homebuilding space. All these factors weighed on homebuilding stocks last week (read: Tough Time for Homebuilding ETFs Despite Fed's Dovishness?).

Teucrium Sugar (CANE) – Down 2.5%

Supply glut in the international market has probably weighed on sugar prices and hurt the fund.

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SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research Reports
 
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
 
Sprott Junior Gold Miners ETF (SGDJ): ETF Research Reports
 
Teucrium Sugar Fund (CANE): ETF Research Reports
 
iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ): ETF Research Reports
 
ETFMG Prime Junior Silver ETF (SILJ): ETF Research Reports
 
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