Surprise Profits in Surprising Markets

Doug Fabian
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Posted: May 09, 2014 12:01 AM
Surprise Profits in Surprising Markets

The Top 10 Exchange-Traded Funds of 2014

A third of the year is already in the books, and 2014 has been a year of surprises so far.

I mean, who would have predicted that long-term Treasury bonds would be so strong this year, with the value of the iShares 20+ Year Treasury Bond ETF (TLT) up more than 11% year to date?

Another big surprise this year is the gains, particularly last month, in both energy and emerging markets. The table below shows the best-performing (non-leveraged) exchange-traded funds (ETFs) in April.

Ticker

Name

April % Gains

TUR

ISHARES MSCI TURKEY ETF

9.31

FCG

FIRST TRUST ISE-REV NAT GAS

9.18

UNG

US NATURAL GAS FUND LP

8.72

XOP

SPDR S&P OIL & GAS EXP & PR

8.05

IPW

SPDR S&P INTL ENERGY SECTOR

7.99

UNL

UNITED STATES 12 MONTH NATUR

7.50

PXE

POWERSHARES DYN ENRG EXP PRO

7.42

FILL

ISHARES MSCI GLOBAL ENERGY P

7.34

EPU

ISHARES MSCI ALL PERU CAPPED

7.03

FRAK

MARKET VECTORS OIL & GAS FRACKING

6.88

As you can see, emerging market standout Turkey topped the list of ETF performers, but the rest of the best (save for Peru) were all in the energy space. To be certain, there’s been a pronounced move higher in the energy space, and that’s a trend all investors should be watching closely.

As for the top-performing ETFs year-to-date, we’ve also seen a rotation toward emerging markets, energy and commodities. The table below shows the best of the best through the first four months of the year.

Ticker

Name

YTD% (as of 4/30)

EGPT

MARKET VECTORS EGYPT INDEX

30.89

UNG

US NATURAL GAS FUND LP

28.32

GGGG

GLOBAL X PURE GOLD MINERS ET

26.29

GLDX

GLOBAL X GOLD EXPLORERS ETF

25.09

MES

MARKET VECTORS GULF STATES

22.40

EIDO

ISHARES MSCI INDONESIA ETF

21.19

DBA

POWERSHARES DB AGRICULTURE F

20.70

IDXJ

MARKET VECTORS INDONESIA SMA

20.67

USAG

UNITED STATES AGRICULTURE IN

20.37

SILJ

PUREFUNDS ISE JUNIOR SIL-ETF

19.54

I doubt that very many market mavens thought that Egypt would be the best-performing sector in the market through the first third of the year, but that’s what’s happened. I also doubt that many had selected gold mining stocks as potential big winners.

The results here show that the most unloved sectors of years past often are the ones ripe and ready for new money flows and for outstanding performance. The key for you as an investor is to identify these trends, and then allocate accordingly.

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