Daily ETF Roundup: XLF Posts Monster Gain, UNG Takes Another Hit

by on November 30, 2011 | ETFs Mentioned:

Despite recent market woes, today saw a stellar performance across the board. Major indexes posted their best day in recent memory with the Dow surging by nearly 500 points and the S&P 500 jumping by 4.3%, leaving the index just shy of 1,250. Just weeks ago investors were worried when the S&P dipped below 1,250, but it seems that the world is finally getting itself back on track. 10 year bonds saw another stellar day with gains topping 3.5% as fixed income follows in the footsteps of equities. On the commodity side of things, both gold and oil finished up on the day, keeping investors on all sides of the equation relatively happy [see also Euro Bond ETFs: Big Yields, Big Risks].

Today’s market gains came from the surprising announcement that a number of central banks from around the world would collaborate on a deal to help boost the global economy. Today marks the second session this week that stocks have seen massive gains, this combined with all of the positive data that the U.S. has seen as of late may be a sign that we are finally headed in the right direction. Either way, stability will be a welcomed attribute for many investors who have grown tired of wading through choppy waters with their investments. With massive gains all around today, we outline two of the most notable ETF performances [see also Back To Basics: 7 ETFs For Long-Term Investors].

One of the biggest ETF winners on the day came from the Financial Select Sector SPDR (XLF), which saw an appreciation of 6.1% on the day. XLF, whose performance outdid most other assets, was boosted in particular by the central banks deal that created strong tailwinds for the overall financial sector. “The central banks of the U.S., the euro region, Canada, the U.K., Japan and Switzerland agreed to cut the cost of providing dollar funding via swap arrangements, the Federal Reserve said, and agreed to make other currencies available as needed” write Michael P. Regan and Rita Nazareth. Even with today’s strong numbers, though, XLF is still down 25% on the year [see also Tax Loss Harvesting With ETFs: 6 Ideas To Lower Client Liabilities].

One of the biggest ETF losers on the day came from the United States Natural Gas Fund LP (UNG) which surrendered another 1.6% in today’s trading. UNG has suffered a few rough days due to mild weather around the country which has subsequently led to higher-than-expected inventories. As we head into the winter months this fund should see a bit of relief, but it is under a fair amount of pressure for the time being. Today’s losses came from investor speculation that tommorow’s EIA inventory report will show yet another rise in natural gas stockpiles. “Typically this time of year, natural gas inventories decline, as the cooling weather triggers gas-fired heating demand” but with an unseasonably warm Autumn, this has yet to occur writes the Wall Street Journal [see also 25 Ways To Invest In Natural Gas].

Disclosure: No positions at time of writing.