5 Of The Hottest ETFs Of Last Week (CZI, SGG, FBT, FAZ, BAL, BAC, JPM, ITMN)

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December 19, 2010 10:56pm NYSE:BAL NYSE:CZI

Last week ended relatively flat for the broader indices as markets digested the finalization of the 2011 Tax Plan, but there were some pockets of performance in various sectors and asset classes.

  We saw a Biotech ETF benefit tremendously from a triple digit return in a top holding, we saw soft commodity prices spike (what inflation?), and we’re seeing further weakness in China.  Here are some top traditional and leverage ETFs from last week which may follow through into this year.

Non-Leveraged ETFs

Barclays iPath Sugar (NYSE:SGG) – Up 13% – This sugar ETN (exchange traded note included since there is no Sugar ETF) jumped again last week on continued concerns over output from various regions.  (NYSE:SGG) has been a top performer in various weeks multiple times this fall and winter.  SGG is up 25% in the past month and an astounding 125% in the prior 6 month period.

First Trust NYSE Arca Biotechnology Index Fund (NYSE:FBT) – Up 10% – FBT was the beneficiary of a massive move in one of its underlying holdings, Intermune (NASDAQ:ITMN).  Intermune jumped over 150% on the week on a positive opinion of a key drug in the EU.  Now, why the market hadn’t already baked in at least the prospect of this outcome is rather startling; we’ll often see biotechs pop 20%-50% on similar news, but with a 150% jump, it was enough to propel (NYSE:FBT) up 10% on the week as a beneficiary.  So, before you jump into this ETF thinking it’s a hot performer, realize where the recent returns were derived and volatility works both ways.

Barclays iPath Cotton (NYSE:BAL) – Up 10% -Cotton is another soft commodity, alongside Sugar, Coffee, and others, that has been running on supply concerns.  (NYSE:BAL) is an ETN as well, and on the month, BAL is up 24% and 99% over the prior 6 month period.

Leveraged ETFs

Direxion China Bear 3x (NYSE:CZI) – Up 7% – Asia was hit last week with investor jitters, including a downgrade of Vietnam by Moody’s.  We may see some fireworks on the Korean peninsula on Monday as well while the South prepares new drills while the North warns against such “provocation”.  While (NYSE:CZI) has been strong in recent weeks, note that it has lost over half its value on the year.  This is the norm for leveraged ETFs held over long periods of time.

Direxion Financial Bear 3x (NYSE:FAZ) – Up 4% – Several large banks like JP Morgan (NYSE:JPM) were punished severely this week on new regulataions setting a limit on debit card transaction fees which is expected to take a huge bite out of profits. This news is probably largely baked into banks at the moment, but investors are still holding their breath for the bombshell wikileaks is promising related to Bank of America (NYSE:BAC). Financials have remained a very volatile sector since 2008 when the housing collapse took hold, so expect continued volatility in the sector for probably years to come as further issues unwind and new ones are discovered.

Written By ETF Base   Disclosure: No position in any ETFs or Stocks mentioned in this article.

The author has a background in Chemical Engineering and an MBA specializing in Finance and Biotech Management. Enamored by investing and saving since a teen, the author has been an advocate for optimized investment returns and frugal hacks for everyday consumers.

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