February Review: Best and Worst Performing ETFs

by on March 3, 2014

It was another up-and-down month for Wall Street in February, as investors weighed a mixed bag of earnings and economic reports. February saw the Philadelphia Federal Reserve index of manufacturing activity fall into negative territory for the first time in nine months; the Fed cited severe winter weather as the primary reason behind the weakness. Retail sales also came in below expectations while U.S. residential construction and building permits fell 16% and 5.4%, respectively. Investors also paid close attention to the most recent Fed minutes, which indicated that a few central bank officials argued for raising interest rates sooner than expected [see The Fed Effect: How Monetary Policy Impacts Your ETFs].

On the ETF front, investors welcomed several new products, including two first-to-market ETFs. For the first time in its history, the U.S. Treasury rolled out floating rate notes (FRNs), marking the first new class of issuance by the Treasury since it issued TIPS in 1997. WisdomTree and iShares both debuted ETFs that offer exposure to the new security, making them the first of their kind. Also in February, AdvisorShares teamed up with Dennis Gartman and Treesdale Partners to roll out a suite of gold ETFs. Each of the funds provide gold exposure in different currency terms by utilizing gold and currency futures.

Below, we highlight this month’s best and worst performers (data as of January 31, 2014):