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Top-Performing ETF Areas of April

Sanghamitra Saha
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After a downbeat Q1, the broader market managed to post gains in the first month of Q2. Overall, SPDR S&P 500 ETF SPY gained about 3.5% in a month’s time (as of Apr 27, 2018), SPDR Dow Jones Industrial Average ETF DIA rose 2.9% while Nasdaq-100-bsed ETFPowerShares QQQ ETF QQQ jumped 4.2%.

Decent earnings and higher oil prices helped the broader markets return decently despite rising yields and trade tensions. In any case, April has been a moderate month with average gain of 1.34% since 1950. The month saw positive returns in 47 years while returns were negative in 21 years.

Against this backdrop, let’s take a look the ETF areas that stood out in April.

Energy

Oil prices have been on a tear this year with United States Oil Fund USO and United States Brent Oil Fund BNO adding about 7.8% and 9.5% in the last one month (as of Apr 27, 2018). A host of factors led oil to a three-year high and benefited most energy-related funds.

Among the tailwinds were chances of an extension in the Saudi-led OPEC output cut deal and geopolitical tensions. Plus, there was the Venezuela crisis and news of a drop in U.S. oil inventory. Venezuela, which has the world's largest proven oil reserves, has been registering a decline in crude production in recent years. IEA warned that Venezuela’s situation is worse enough to send the oil market into deficit (read: Why to Consider Leveraged Oil ETFs Now).

While the month of April showered blockbuster gains on energy ETFs, we have highlighted some top gainers like PowerShares S&P SmallCap Energy Portfolio PSCE (up 22.5%), SPDR S&P Oil & Gas Equipment & Services ETF XES (up 21.2%), iShares U.S. Oil Equipment & Services ETF IEZ (up 18.3%) and PowerShares Dynamic Energy Exploration & Production Portfolio PXE (up 15.9%).

Italy

Italy’s stocks touched the highest level since 2009 in April as investors ignored the political gridlock, per Bloomberg. Though political parties have been incapable of constituting a new government thanks to an inconclusive election in March, the country’s caretaker government passed its latest multi-year conservative economic plan on Apr 26.

The plan reaffirmed most of the estimates issued in September. This piece of news along with hopes of no policy tightening at the ECB in the near term has probably given a boost to the fund. iShares Currency Hedged MSCI Italy ETFHEWI gained about 8.1% in the past one month (as of Apr 27, 2018).

Cocoa

Dry weather hurt cocoa in Ivory Coast, the world’s largest producer. Notably, 70% of the global output hails from West African nations like Ghana and Ivory Coast. Moreover, Citigroup had forecast the “tightest supply situation in a decade” in cocoa space in mid-April. All these helped iPath Bloomberg Cocoa Subindex Total Return ETN NIB add 7.3% in the past one month (as of Apr 27, 2018).

Steel

Trump’s announcement in March that the United States will impose a 25% tariff on steel imports caused U.S. steel prices to escalate. Meanwhile, China’s steel prices scaled thanks to cuts in bank reserve requirement ratios. As a result VanEck Vectors Steel ETF SLX advanced more than 7.6% in the past one month (as of Apr 27, 2018) (read: Trump Tariffs Put These Sector ETFs & Stocks in Focus).

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SPDR-DJ IND AVG (DIA): ETF Research Reports
 
NASDAQ-100 SHRS (QQQ): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
US-OIL FUND LP (USO): ETF Research Reports
 
VANECK-STEEL (SLX): ETF Research Reports
 
US BRENT OIL FD (BNO): ETF Research Reports
 
ISHARS-US OIL E (IEZ): ETF Research Reports
 
PWRSH-SP SC EGY (PSCE): ETF Research Reports
 
SPDR-SP O&G EQP (XES): ETF Research Reports
 
PWRSH-DYN ENRG (PXE): ETF Research Reports
 
IPATH-BB COCO (NIB): ETF Research Reports
 
ISHARS-CHM ITLY (HEWI): ETF Research Reports
 
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