Don Dion’s Weekly ETF Winners and Losers
Here are this week’s ETF winners and losers.
Winners
U.S. Natural Gas(UNG) +8.2%
iPath Natural Gas ETN(GAZ) +7.5%
U.S. 12 Month Natural Gas(UNL) +5.8%
UNG gained 5.3% on Monday and held those gains through the week, adding a bit on Friday as a major winter storm rolled across the mid-Atlantic.
To put the move in perspective though, UNG was the biggest loser last week, and it finished this week below where it was two weeks ago. Much of the gain this week may simply be a rebound off the previous week’s losses.
CurrencyShares Japanese Yen(FXY) +0.9%
When he took office last month, Japan’s finance minister, Naoko Kan, said he wanted to see the yen weaken so that 95 yen would be worth a dollar, but the financial markets had other ideas this week.
Investors unwound carry trades as markets slid, and the yen showed strength against the greenback, which itself was rising against the euro. On Friday, the yen was trading at about 89 per dollar, down from the 93 level seen in early January when Kan took office.
iShares Dow Jones U.S. Home Construction(ITB) +0.4%; SPDR S&P Homebuilders(XHB) -0.4%
While I still have concerns regarding the strength of the broad U.S. real estate industry, it’s hard to deny the impressive performance from homebuilder ETFs like the iShares Dow Jones U.S. Home Construction Index Fund, which was a winner for the second straight week. As was the case last week, ITB beat XHB thanks to a larger allocation to homebuilder stocks.
Despite broad market weakness, ITB saw some of the strongest gains in the past five days thanks to optimistic news from National Association of Realtors and a positive earnings report from D.R. Horton(DHI). It is likely that DHI will continue to be a bright spot in the domestic housing industry thanks to its focus on budget housing.
Losers
iShares Spain(EWP) -7.6%.
Investors fled all things Europe this week, and it was Spain that was most responsible, as real estate and banking worries hit the market on Thursday. Accordingly, EWP took a nosedive. Though debt issues facing Greece and Portugal are making most of the headlines, Spain may end up being the biggest elephant in the room.
Already the nation faces 20% unemployment, a contracting economy and a massive government spending deficit. This week, however, that list of issues grew when the Spanish Mortgage Association announced that the nation’s real estate market is bankrupt.
All of these issues together paint a depressing picture for Spain’s financial sector, which accounts for over 40% of EWP’s total portfolio. Going forward, I feel that more losses will be in store for this troubled nation and the broad euro-bloc.
iShares Dow Jones U.S. Regional Banks(IAT) -4.0%
Throughout the past month, regional banks proved to be a source of strength as Washington continues its assault on Big Finance. However, this week, investors took some profits, causing funds like the iShares Dow Jones U.S. Regional Banks Index Fund to take heavy losses.
iPath Copper ETN(JJC) -5.2%; PowerShares DB Base Metals(DBB) -4.9%
Though the broad market selloff dragged down the broad spectrum of basic materials, none were hit harder than copper. This was the fourth consecutive week of declines for the red metal as investors fled JJC. Much of this week’s losses can be attributed to the greenback’s strength and continued fear of reduced demand from China.
