Sector ETFs: Biggest Winners & Losers YTD

by on June 13, 2013 | ETFs Mentioned:

The last six months have seen both the highest and lowest points in a variety of markets, and a flurry of economic data and announcements have promised to keep the rest of the year just as interesting. As we approach the halfway point for 2013, investors should take a moment to look back at the best performing market sectors so far this year.  [For updates on all new ETFs, sign up for the free ETFdb newsletter].

Below, we look at a handful of market sectors that have surpassed all others since the beginning of 2013, and highlight some ETFs that can take advantage of these sectors (note that inverse and leveraged ETFs are excluded from this list):

  1. Alternative Energy: With the general downward trend of crude oil, the exploration and rising use of natural gas has been a huge benefit to the energy equities sector through the last six months. More traditional alternative energy ETFs have also seen a huge rise in investors and funding, leading products like the Solar ETF (TAN, C+) to rake in huge returns. Also benefiting from the energy boost are Market Vectors Solar Energy ETF  (KWT, C+) and Global Alternative Energy ETF  (GEX, C+).
  2. Alternative EnergyHealthcare: With the continuation of Obamacare, 2013 has seen a huge rise in healthcare research, development and funding. Specifically, pharmaceutical and biotechnology firms have seen outstanding returns over the last six months, with funds like Market Vectors Biotech ETF  (BBH, B-) and the Nasdaq Biotechnology Fund  (IBB, A-) pulling in significant returns for investors [also see Head-To-Head: Healthcare Industry Standouts].
  3. Financials: This hit-or-miss sector has left investors high and dry before, but not over the last six months. This recent expansion can be credited to a number of events, including the growth of value in financial assets under professional management. Consumers have started to trust the markets again, leading to strong bumps in returns for ETFs like KBW Insurance Portfolio  (KBWI, C+) and Capital Markets Portfolio  (KBWC, C+) [also see 25 Things Every Financial Advisor Should Know About ETFs].

Below are three market sectors that have missed out the most over the past six months and the ETFs that have fallen with them:

  1. Volatility: While the strong trading season has been great for the general market, it means negative returns for a number of volatilty funds that make their money during market downturns. C-Tracks ETN (CVOL, C+) is down nearly 50% over the last six months, making it one of the worst returning nonlevered or inverse ETFs. Also suffering are the VIX Short-Term ETN  (VIIX, B-) and S&P 500 VIX Short-Term Futures ETN  (VXX, B+) [see Free Report: How To Pick The Right ETF Every Time].
  2. Coal Mining Stocks Delivered Big Gains This YearCommodity Producers: With traditional commodities taking a hit during the resurgence of natural gas and alternative energy investing and strong equities markets, those companies that support commodity investing are falling flat. Mining operations have been the worst hit, with many energy companies countering their losses with investments in natural gas exploration. The Gold Explorers ETF  (GLDX, C+), Pure Gold Miners ETF  (GGGG, C), and PureFunds ISE Junior Silver ETF  (SILJ, C+) have seen only red since the massive price drop in both precious metals this April. 
  3. Emerging Markets: Once a necessary component to every diversified portfolio, emerging markets have taken a huge hit in 2013 with the strengthening of developed markets, especially the United States. With investors no longer needing to look abroad for strong returns, plus the continual slow down of several key countries, (China, Brazil, and India to name a few), emerging markets have seen huge numbers of investors fleeing for greener pastures. Among the worst hit are the India Small Cap Index ETF  (SCIF, C) and Egypt Index ETF  (EGPT, C) [see Turkey ETF (TUR) In Focus Amid Protests].

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Disclosure: No positions at time of writing.