Top ETF Areas Amid Last Week’s Volatility


Last week was volatile for Wall Street with the S&P 500 and the Dow Jones losingabout 0.6% and 1.8%, respectively. The Nasdaq has gained 1.1% past week. Though the Nasdaq was volatile earlier in the week, it ended it on a positive note. The Nasdaq’s gain of about 2.3% on Sep 25 was its biggest since Sep 9, as tech stocks rebounded from their recent declines.

Doubts over the faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, talks of major banks engaging in transferring illicit funds, profit booking on tech stocks and pre-election volatility in the United States have spelt trouble for the markets. Dr. Anthony Fauci, leading infectious disease expert, recently commented that a “large proportion” of the United States will not receive the vaccine in 2020, per a CNN report (read: “Worst September in 18 Years”? 4 Sector ETFs Surviving Selloffs).

Against such a backdrop, below we highlight a few winning ETF areas of the last week. These ETFs mostly hail from the asset classes that offer minimum downside (read: Inverse ETFs Gaining More Than 20% in September).

Natural Gas

iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ) (up 12.4%) andUnited States Natural Gas Fund LP (UNG) (up 12.1%) were the winners. The price action indicates that traders have moved ahead “from the negative impact on demand from Tropical Storm Beta and a dip in demand for liquefied natural gas,” quoted on FX Empire.

Inverse Equity

This ETF is active and does not track a benchmark. The fund is actively managed and has an investment focus that involves buying securities that have appreciated in price more than the other securities in the investment universe and holding those securities until they underperform. AdvisorShares Dorsey Wright Short ETF DWSH gained 11.4% in the week.

Dry Bulk Shipping

The underlying Capesize 5TC Index, Panamax 4TC Index and Supramax 6TC Index measure rates for shipping dry bulk freight.Breakwave Dry Bulk Shipping ETF BDRY seeks to provide investors with exposure to the daily change in the price of dry bulk freight futures, before expenses and liabilities. The fund gained 10.3% past week.

Volatility

The underlying S&P 500 VIX Short-Term Futures Index Total Return offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the index. iPath Series B SP 500 VIX ShortTerm Futures ETN VXX, which gained 7.4% last week, charges 89 bps in fees.

Long/Short

Long/short fund AGFiQ US Market Neutral Momentum ETF MOM, looks to track the performance results that correspond to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Thematic Market Neutral Momentum Index, gained 6.4% last week. The index is a long/short market neutral index that is dollar-neutral.

AGFiQ US Market Neutral AntiBeta ETF (BTAL) follows a long/short market neutral index that is dollar-neutral. The fund gained 5.8% last week (read: 5 Buy-Write ETFs to Consider Amid Market Turbulence).

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iPath Series B SP 500 VIX ShortTerm Futures ETN (VXX): ETF Research Reports

iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ): ETF Research Reports

AGFiQ US Market Neutral Momentum ETF (MOM): ETF Research Reports

Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports

AdvisorShares Dorsey Wright Short ETF (DWSH): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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