TREND # 4: Emerging Markets & Europe
The once-hot emerging-market sector is nowhere on this year’s equity ETF top 10 winners list. The third-quarter loser list makes it abundantly clear that Indonesia, India and Turkey were not popular places to invest this summer.
The Q3 winner’s list contains an interesting lesson, though.
When a market is beaten down long enough, the subsequent rebound can be very profitable. Look at those 30% or more bounces by the Market Vectors Egypt Index ETF (NYSEARCA:EGPT), Global X FTSE Greece 20 (NYSEARCA:GREK) and iShares MSCI Spain Capped Index (NYSEARCA:EWP). This is what can happen when bears finally exhaust their selling pressure.
As Greece and Spain rebound, investors seem to be rethinking prospects for the rest of Europe, too. The Vanguard FTSE Europe ETF (NYSEARCA:VGT) attracted $3 billion of new capital during the third quarter. The Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA), which has a large Europe allocation, received $1.6 billion in net new capital over the same period.
TREND # 5: Global Tech
I see an interesting trend in Chinese technology stocks. Three of the third-quarter’s top ETF equity gainers are in that category.
The Guggenheim China Technology ETF (CQQQ) vaulted 27.24% over the past three months and the Global X Nasdaq China Technology ETF (QQQC) shot up 26.64%.
The PowerShares Golden Dragon China ETF (NYSEARCA:PGJ) isn’t pure technology, but its big tech allocation no doubt helped PGJ soar 36.40% during the quarter.
If ETF popularity is an indication, social media is a growing technology trend. Global X Social Media (NASDAQ:SOCL) jumped 31.33% in the latest quarter and 52.21% year-to-date.
Strong gains in Facebook (FB) helped propel the social media group. This is an interesting technology trend. I plan to watch it very closely the next few months.
The border between technology and health care is also hopping this year. Three biotechnology ETFs — the Market Vectors Biotechnology (BBH), PowerShares Dynamic Biotechnology and Genome (NYSEARCA:PBE) and iShares Nasdaq Biotechnology (NYSEARCA:IBB) — each rewarded their shareholders with YTD returns exceeding 50%.
I don’t bet on horse races — but I would wager you could find other interesting new ideas in these tables. Just use your eyeballs and invest a little time.
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