Best And Worst ETFs Of The Week Amid Biotech Breakout
The stock market added to gains this week as the V-shaped rebound in equities continued to lure buyers into catching a month-end rally. The SPDR S&P 500 ETF (NYSE: SPY) gained 4 percent during the week and came into close proximity of regaining its 50-day moving average.
The following ETFs represent a sample of the best- and worst-performing funds over the last five trading sessions.
BEST: Biotechnology Stocks
Biotechnology stocks were once again the top performing industry group of the health care sector amid fears of a wide-spread Ebola outbreak. The Market Vectors Biotech ETF (NYSE: BBH) gained more than 9.5 percent this week and notched to a new all-time closing high.
BBH tracks 25 of the largest U.S.-listed biotechnology companies that include titans such as Amgen Inc and Gilead Sciences Inc. This ETF is now sitting on gains of 26 percent in 2014 and continues to show tremendous upside momentum.
The iShares NASDAQ Biotechnology ETF (NASDAQ: IBB) is another key ETF in this space that saw fantastic relative strength. This fast-moving sector will be one to watch if equities continue their rebound into the seasonally strong November and December time frame.
WORST: Volatility Futures
The explosive move higher in stocks this week coincided with a reduction in fear that sent volatility-linked investments lower. The iPath S&P 500 Short Term VIX Futures ETN (NYSE: VXX) lost more than 13 percent during the last five trading sessions.
VXX tracks near-month futures contracts of the CBOE VIX Volatility Index. The VIX Index is a well-known measure of investor sentiment that follows near-term volatility conveyed by S&P 500 options prices. This ETN has nearly $1 billion in total assets dedicated to hedging downside risk in stocks.
As a contrarian play, VXX may find itself struggling as stocks head higher. However, this ETN will surely reverse course if the recent equity rally is short lived.
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