The year started with a seasonal slowdown in the U.S. and global growth worries taking the center stage. However, decent advances in the U.S. economy following Q1 fuelled rising rate speculations. While this resulted in an unprecedented strength in the greenback, easy money policies in most developed nations as well as a few emerging countries made the U.S. dollar the king of currencies for the most part of this year.
This weighed on the large-cap U.S. stocks having considerable foreign exposure. Moreover, protracted slowdown in China, highly volatile oil prices (mostly on steep downward trail) and a nagging Greek debt deal in July kept casting a shadow over global growth.
However, the case for China investing was somewhat weird. As much as the economy had revealed lackluster data points, the case for aggressive monetary easing became stronger. As a result, the Chinese stocks returned phenomenally (a few have gained close to 100%) in the first half of 2015.
Such an ascent without a steady base had to fall at some point of time and the Chinese stocks succumbed to correction in June. In fact, the Chinese stock market underwent heavy panic-induced sell-offs several times in the last three months, with August being the most cruel, mercilessly lashing the global markets.
Behind the bloodbath was the Chinese policy makers’ devaluation of the country’s currency yuan by 2% in mid August, to presumably maintain export competitiveness. While this particular step slaughtered most securities and unnerved investors, a six-and-a-half-year low Chinese manufacturing data for August crushed the global risky assets to pieces.
Things were also muddled in the U.S. as the Fed’s policy tightening seemed to have been pushed back, sparking off a fresh round of global growth concerns. The U.S. and Asian stocks had experienced a three-year low monthly performance in August. Europe saw the most horrible month since the 2011 debt debacle. Commodities crumbled to multi-year lows on demand issues and hit hard all commodity-rich nations.
Though the U.S. markets gained in the latter part of the week, on a year-to-date basis, the S&P 500 and Dow Jones are in red. However, Nasdaq-100 is just up 0.9%. The big ETFs, (SPY), (DIA) and (QQQ) lost about 3.9%, 7.1% and 1%, respectively. Notably, all three major U.S. indices slipped into a correction territory on this global market chaos.
These may give enough reasons for investors to panic and look for equity survivors this year. For them, we highlight six ETFs that have gained over 15% so far this year.
Biotech – ALPS Medical Breakthroughs ETF (NYSEARCA:SBIO)
Though this soaring space has recently undergone a correction on overvaluation concerns, biotech ETF SBIO is up 36% this year. The fund also returned over 4.7% in the last week (as of August 31, 2015) as correction made this hot investing area more tempting. Other biotech and health care ETFs that retuned smartly this year are BioShares Biotechnology Products Fund (BBP) (up 28.2%), SPDR S&P Biotech ETF (XBI) (up 23.2%) and PowerShares S&P SmallCap Health Care Portfolio (PSCH) (up 18.7%).
Japan – WisdomTree Japan Hedged Health Care Fund (NYSEARCA:DXJH)
This Zacks Rank #1 (Strong Buy) Japan Health Care ETF, has gained about 28.3% so far this year and 0.6% in the past week. The fund’s currency-hedged technique gave it an edge as this mitigated negative currency translation this year. Another Japan-based ETF WisdomTree Japan Hedged Financials Fund (DXJF), with an ETF Rank #1, is up 17.4% this year and gained 3.4% past week.
Ireland – iShares MSCI Ireland Capped ETF (NYSEARCA:EIRL)
Ireland is the first Euro zone nation that came out of the bailout program in December 2013 and is presently one of the fastest growing in the pack. Ireland’s economy is deemed to grow about 5% this year. As a result, EIRL is up 17.1% in the year-to-date frame and advanced 1.9% in the past week. EIRL has an ETF Rank #2 (Buy).
Denmark – iShares MSCI Denmark Capped ETF (BATS:EDEN)
The Danish economy expanded 0.2% in Q2, carried on the longest stretch of incessant growth in 25 years. Moreover, the economy breezed past the expectations of an economic stall in Q2. All these stirred optimism around the nation and showered 16.2% gains on EDEN this year. This ETF Rank #2 fund added over 0.5% in the past one week.
U.S. – QuantShares US Market Neutral Momentum Fund (NYSEARCA:MOM)
Since occasional volatility has stumped the U.S. market sporadically this year, this long/short ETF emerged as the winner. The underlying index of the fund is equal weighted, dollar neutral and sector neutral. The index takes the highest momentum stocks into account as long positions and the lowest momentum stocks as short positions. MOM is up 16.2% this year and gained 0.5% last week.
China – Market Vectors ChinaAMC SME-ChiNext ETF (NYSEARCA:CNXT)
Investors must be surprised to know that even after this huge scale of massacre, a China ETF, CNXT, managed to score 22.3% gain in the year-to-date frame. However, investing in this fund needs great caution as the fund was down 8.5% last week and could be due for wilder ride in the days to come as the Chinese government has initiated a `crackdown’ on the domestic stock market.
This article is brought to you courtesy of Zacks.