2010 has gotten off to a great start across the board. Below we provide the recent performance of key ETFs across all asset classes. As you can see, there is lots of green and little red, indicating that almost everything is up over the last day, week and month. The only ETF listed below that is down over all three time periods is Natural Gas (UNG).
Over the past month or so, the only area of the bond market that has done well is junk. Both Treasuries and investment grade corporates have struggled, while high yield bonds have continued to surge. Below we highlight a six-month performance chart of the high yield bond ETF (HYG) and the investment grade corporate bond ETF (LQD). As shown, HYG is up 18.17% over the last six months, while LQD is only up 5.50%. You can see a clear split in performance (shaded in gray) at the start of December, where HYG continued to trade higher and LQD began to trade lower.
With stocks and commodities both up nicely in 2009, it's no surprise that the 2x and 3x leveraged long ETFs have done the best, while the 2x and 3x inverse ETFs have done the worst. Of our list of leveraged/inverse ETFs, ROM (2x Tech) is up the most in 2009 at 148.46%. The worst has been the triple short Financial ETF (FAZ) with a decline of 94.66%. For bears on the financial sector, the year sure started out nice, but it has been a rough ride over the past nine months.
After less than six months of trading, the MacroShares up and down housing trusts have closed up shop. DMM (down) and UMM (up) hit an early termination trigger last week for having assets on deposit of less than $50 million. As shown in the charts below, the volume on these two securities became non-existent in recent months as investors shunned the product. MacroShares has had a rough go at it over the past two years. First, their up and down oil ETFs (UCR and DCR) went bust, and now this.
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As the Senate continues to strip out provisions that would give the government more control over the health care system, health care ETFs have caught fire and moved to extreme overbought territory. The Health Care Providers ETF (IHF) has moved up the most and is currently trading more than 10% above its 50-day moving average.
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From our list of more than 200 key ETFs across all asset classes, four gold ETFs are trading the furthest above their 50-day moving averages. The gold miners ETF, GDX, is trading the furthest above its 50-day out of all of the ETFs (non leveraged/inverse) we track at +14.96%. Three ETFs that track the actual metal (GLD, IAU, and DGL) rank 2nd, 3rd, and 4th, while the precious metals ETF (DBP) is the 5th most overbought. Along with GDX, SLX (steel stocks) and HHH (internet stocks) are the only other US equity ETFs in the top fifteen.
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Along with the Dow hitting new bull market highs today, two other notable securities have done the same. As shown below, Google (GOOG) broke to new highs this morning and is now trading above $560. One of the more popular China ETFs (FXI) also broke above its October highs and is now trading at $45.55. Both of these names are widely followed by traders and should be lighting up screens today.
After leveraged and inverse ETFs hit mania status in 2008 and early 2009, their star-power has begun to fade as brokerages have begun to put big restrictions on them. But they're still being traded, and below we highlight the best and worst performing leveraged and inverse ETFs in 2009. As shown, the 2x technology sector ETF (ROM) is up the most so far this year with a gain of 109.44%. The 2x materials sector ETF (UYM) ranks 2nd with a gain of 96.65%, and the 2x silver ETF (AGQ) is not far behind in 3rd at 95.05%. All but one of the best performing ETFs listed below are on the long side. The lone short ETF that is on the list of winners is TBT, which provides 2x the inverse daily return of long-term Treasuries.
The double and triple short ETFs have gotten crushed this year, which is no surprise given the rally we've had. The 3x short Financial ETF is down the most at -93.88%, followed by a 2x short Financial (RFN) with a decline of 81.16%. All of the double and triple short ETFs listed below are down more than 50% so far in 2009.
A guest on CNBC's Street Signs yesterday was speaking about luxury goods and mentioned that investors can play the market with the Robb Report Global Luxury Index ETF (ROB). As shown below, the ROB ETF has done extremely well since the March lows, gaining 119% versus the S&P 500's gain of 58%. Going back to the start of the bear market in October 2007, however, ROB is still down 34.2% versus the S&P 500's decline of 31.7%. So while luxury has made a strong comeback this year, it is still down compared to the entire market over the last two years.
The most interesting aspect about ROB yesterday was the big increase in volume that the ETF saw. For an ETF that typically trades less than 4,000 shares a day, ROB traded 49,000 shares yesterday, which is a pretty big spike even when factoring in the mention on CNBC. It's just a little bit suspicious that almost all of the big volume came between 1:00 PM and 1:30 PM, which is about an hour before the segment ran on Street Signs at about 2:30 PM.
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Municipal bonds have made a huge comeback since they tanked in late 2008. After falling to $88, the national municipal bond ETF (MUB) just recently hit an all-time high of $104.3. The trading in munis runs counter to the concerns people have about local and state governments. Since most munis offer tax-free income, the run-up could also be due to worries about the coming increase in taxes.
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As we head into the Labor Day weekend, we thought investors might like to take a look at how various asset classes have performed over the last month, 3 months, and year. Below we have broken up a number of key ETFs into asset classes to easily highlight asset-class performance.
As shown, ETFs are mostly up over the last month and three months, but they're still down over the last year (with the exception of gold and fixed income ETFs). The S&P 500 tracking SPY ETF is down 17.85% versus a year ago, while the Nasdaq 100 tracking QQQQ is only down 7.8%. Smallcap ETFs are down more than midcaps, and Financials, Energy, and Industrials are down the most out of the ten US sectors.
Internationally, Russia (RSX), Germany (EWG), and Italy (EWI) have done the worst over the last year, while China (FXI) and India (INP) are actually up. Australia (EWA) is up the most over the last three months. Looking at commodities, oil ETFs are down over all three time frames, while gold and silver ETFs are all up.
Investors who expect a market pullback and want to find potential short candidates could start with a list of the most overbought ETFs at the moment. Below is a list of key ETFs that are trading the furthest above their 50-day moving averages. As shown, the insurance ETF (KIE) is the furthest above its 50-day at 17.89%, followed by banking (KBE), Austria (EWO), homebuilders (XHB), and real estate (IYR). The majority of the most overbought ETFs are from the financial sector, and other countries that are overbought include Sweden (EWD), Australia (EWA), Belgium (EWK), the Netherlands (EWN), France (EWQ), Italy (EWI), Spain (EWP), and Europe as a whole.
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Over the last month, all asset classes except for the dollar and fixed income have been on a tear. There are lots of green arrows in the table below that show the recent performance of key ETFs. The S&P 500 tracking SPY ETF is up 14.24% over the last month, and most foreign ETFs are up even more. Australia (EWA), Brazil (EWZ), Canada (EWC), Germany (EWG), Mexico (EWW), and Russia (RSX) are all up more than 20%. Materials (XLB) and Financials (XLF) have been the two best performing sectors over the last month with gains of about 25%. Telecom (IYZ), Health Care (XLV), and Utilities (XLU) have gone up the least. And most commodities ETFs are up more than 10% as well. If you've been long and strong, you've got to have a smile on your face after a run like this.
As leveraged and inverse ETFs get more and more attention from the regulation agencies, below we provide a snapshot of the winners and losers in this unique group of ETFs so far in 2009. As shown, the 2x semiconductor ETF (USD) is up the most year to date with a gain of 86.4%. The 2x technology and 2x materials ETFs (ROM and UYM) rank second and third. The 2x silver ETF (AGQ) has also done well with a gain of 49.21%. The only inverse, or short, ETF on the list of big winners in 2009 is the double short 20+ year Treasury ETF (TBT).
The triple short financial ETF (FAZ) takes the take for being the biggest loser in 2009. It's going to be hard for another one to beat it out on the downside at this point with a decline of 92.42%. The index that FAZ tracks is up 13% year to date. None of the biggest losers year to date are double long ETFs, which is a huge change from where things stood just a few months ago. Now, the double and triple short ETFs are the ones getting crushed.
The S&P Homebuilders ETF (XHB) broke out to new year-to-date intraday highs yesterday. The ETF is now up 75% from its March low and 33% from its early July low. Investors monitoring the homebuilder stocks for signs that the real estate market is bottoming currently have some bullish ammo.
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After the market's recent pullback, most equity ETFs are trading below their 50-day moving averages. Below we highlight the key ETFs that are currently trading the furthest above and below their 50-days. As shown, the Financial Preferred ETF (PGF) is the furthest above its 50-day (+5.84%), followed by the Yen (FXY), Long-Term Bonds (BLV), and Biotech (BBH). The majority of ETFs trading above their 50-days are Fixed Income related, while the majority trading below are equity related. This is a much different picture from a few weeks ago when bonds were tanking and equities were rallying. The Natural Gas ETF (UNG) is trading the furthest below its 50-day at -16%. UNG is followed by Russia (RSX), Oil and Gas Exploration (XOP), and Emerging Markets Europe (GUR).
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Below we provide the recent performance of ETFs across all asset classes. We posted the same table about a month ago and the performance numbers were much different. There was basically much more green on the board last month. The last week and month have been red pretty much across the board. Energy, Materials, and Consumer Discretionary have been the worst performing sector ETFs, while Germany, Italy, France, and Russia have seen the biggest international declines. China's FXI and India's INP are the only two international ETFs that have gained in the last month.
Since mid-November, the triple long financial ETF (FAS) is down 71% to $10.38, while the triple short financial ETF (FAZ) is down 95% to $4.43. Over the same time period, the financial index that the ETFs track is up 7%! Go figure. The triple leveraged ETFs track the daily return of the indices they follow, and their prospectuses do not suggest using them as long-term investments even if you think a sector or index will go up or down. Some people have seemingly figured out how to make money off of these triple ETFs, however. Go short both the triple long and triple short ETF, as they both drift towards zero in volatile markets. As shown below, short interest has risen to 25 million for FAS and 18 million for FAZ.
Below we highlight the year to date performance of the various leveraged and inverse ETFs. Out of the 112 that we track, 29 are up year to date while 83 are down. As shown below, the 2x long silver ETF (AGQ) is up the most at 65%. The 2x inverse long-term Treasury ETF (TBT) is up the 2nd most at 51%, followed by 2x technology (ROM), 2x Nasdaq 100 (QLD), and 2x basic materials (UYM).
The 3x inverse financials is down the most year to date with a big decline of 87.29%. Interestingly, the 3x long financials is also down big with a decline of 60%. This financial index that these two ETFs track is down 0.24% year to date. Go figure.
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With stocks rallying around the world, the many ETFs that track various equity markets have moved significantly above their 50-day moving averages. Below we highlight the most overbought ETFs in relation to their 50-day moving averages. This list of ETFs comes from our daily ETF Trends report at Bespoke Premium.
As shown, the Russian stock market ETF (RSX) is the most overbought, trading 36.17% above its 50-day. India (INP) ranks second at 35.72%, followed by the steel ETF (SLX), emerging market Europe (GUR), metals and mining (XME), and Singapore (EWS). The majority of the ETFs on this list track countries. The rest are generally concentraded in the commodities area.
After getting absolutely crushed in 2008 and the first part of 2009, preferred stocks have made a nice comeback. Below is a chart of the iShares S&P US Preferred Stock Index ETF (PFF). Since bottoming in March, PFF is up 106.71% and is trying to break out from its January highs.
For those interested in a quick snapshot of how various ETFs across all asset classes have performed recently, below we highlight their 1-day, 5-day, and 1-month performance. As far as equities go, there was lots of red today, but there's still lots of green over the last month.
In our last post we looked at non-leveraged ETFs, and below we highlight the best and worst performing leveraged ETFs so far in 2009. Even though the market is trading close to flat year to date, only 27 of the 110 leveraged ETFs that we track are up for the year. The double long technology ETF (ROM) is up the most at 36.37%, followed by the double long semiconductor ETF (USD), the double long QQQs (QLD), and the double short long-term Treasury ETF (TBT). The second best performing double short ETF is the Japanese Yen (YCS).
The list of the worst performing leveraged ETFs this year shows just how crazy these products can be. The two worst performing leveraged ETFs in 2009 are the three times financial short and long securities! FAS (long) and FAZ (short) track the Russell 1,000 financial sector, which is down a little more than 2% this year. Even though the sector is down, the 3x short ETF (FAZ) is down more than the long one. And they're both down by huge amounts even though the sector itself is only down a couple hundred basis points. FAZ is down 82%, and FAS is down 62%! Wow.
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We recently searched all of the ETFs that we follow in our daily ETF Trends report and found the ones currently trading the furthest above and below their 50-day moving averages. As shown below, many ETFs across all asset classes are trading well above their normal trading ranges. The private equity ETF (highlighted yesterday) is the furthest above its 50-day at 36.86%. The metals & mining ETF (XME) ranks second at +34.44%, followed by steel (SLX), financial preferreds (PGF), regional banks (RKH), and the homebuilders (XHB). All of the ETFs listed above were hit the hardest during the downturn and they are recovering nicely, albeit off of very low bases.
Below we highlight the 16 ETFs out of the 200 or so that we track that are trading below their 50-day moving averages. Natural Gas is the furthest below its 50-day, as it cements its status as the worst commodity on the planet these days. The list is primarily made up of fixed income and commodity ETFs that have sold off as equities have rallied.
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PowerShares has an ETF (ticker: PSP) that tracks private equity companies that are publicly traded. It's not news to anyone that private equity has been hit extremely hard throughout the financial crisis, and from its peak to trough over the last two years, PSP went down 87%. Since March 9th, however, PSP is up exactly 100%. It's also the ETF in our ETF Trends report that is currently the furthest above its 50-day moving average (DMA). As shown in the 50-DMA spread chart in the second chart below, this is by far the most overbought the ETF has been in its short history. While PSP has doubled in a matter of months, it still needs to gain 287% if it wants to get back to its all-time highs seen in June 2007.
