ETFdb’s 2013 Holiday Portfolio Recap: XRT, KOL, IYT, CUT, COW

by on December 25, 2013 | ETFs Mentioned:

This year started off on a very strong note after equities exploded out of the gates on Wall Street following the successful resolution to the fiscal cliff on New Year’s eve. As budget woes passed and worries over the eurozone’s recovery eased up, domestic stocks took the lead and investors from around the world embraced the United States’ improving economic growth prospects. The second half of 2013 proved to be more tumultuous, however, after the Federal Reserve hinted that it would soon start to scale back on stimulus measures; investors initially reacted with fear, although as volatility simmered, the bull trend resumed with full force and many were prompted to rotate out of defensive equities and into growth-sensitive, cyclical ones [Download How To Pick The Right ETF Every Time].

With major U.S. equity benchmarks finishing off the year near all-time highs, many are worried about what 2014 may have in store; as expected, the bulls foresee the recovery to pick up even more steam, while bearish pundits continue to preach about the impending correction that is lurking right around the corner on Wall Street [see The Most Successful New ETFs of 2013].

Despite the mixed outlook, we can’t help but get into the holiday spirit, so we’re highlighting the five ETFs that we featured in our 2013 Holiday Portfolio and taking a look at how they held up this year (returns as of 12/18/2013):

Click to Enlarge


SPDR S&P Retail ETF (XRT, A)

XRT not only extended its winning streak from last year, it even doubled it; this ETF raked in nearly 40% in 2013, quite impressive when you consider that it was up 20% the year prior. U.S. consumer spending picked up steam as the labor market improved, with the unemployment rate sinking from 7.9% to 7% through the end of 2013; this in turn prompted shoppers and investors to flock back to discretionary goods and cyclical securities alike amid improving growth prospects [see Consumer Centric ETFdb Portfolio].

Market Vectors Coal ETF (KOL, B+)

KOL on the other hand, managed to extend its losing streak from last year, posting an equally dismal performance this time around; this fund lost over 20% in 2012 and it managed to do the same in 2013, likely leaving buy-and-holders very disappointed. Continued investments into the domestic energy sector, largely focusing on natural gas-related assets, and a growing sense of urgency to move away from traditional fossil fuels put downward pressure on coal companies throughout the year [see Energy Bull ETFdb Portfolio].

Transportation Average ETF (IYT, A+)

IYT replaced the Airline ETF (FAA) in our Holiday Portfolio as Guggenheim shut the doors on the airline industry-focused fund in March of this year after it failed to accumulate significant assets under management. Transportation stocks, as represented by IYT, gained well over 30% on the year as signs of improving growth from around the globe, namely in Europe and the U.S., bolstered shipping and transport-related businesses.

Timber ETF (CUT, B)

The Timber ETF had another strong year as it gained over 20%, extending its winning streak from 2012 when it raked in a solid 25%. The ongoing housing market recovery at home bolstered lumber demand, and component companies including West Fraser Timber (WFTBF), Weyerhaeuser Co (WY), and Plum Creek Timber Co Inc (PCL) were favorably positioned to take advantage [try our Free ETF Stock Exposure Tool].

DJ-UBS Livestock Total Return Sub-Index ETN (COW, A)

COW ended 2012 on a flat note and it didn’t fare much better this time around; this livestock ETN shed about 5% in 2013. Commodities were hit hard in 2013 across the board as improving growth and prospects of rising interest rates favored riskier assets and the U.S. dollar, which ultimately put serious downward pressure on natural resource prices throughout most of the year.

Follow me on Twitter @SBojinov

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free 14 day trial to ETFdb Pro]

Disclosure: No positions at time of writing.