Best And Worst ETFs Of The Week Amid U.S. Dollar Rally

The markets turned into the red on Friday and pushed the weekly decline in the SPDR S&P 500 ETF SPY to a loss of about 1 percent.

One of the most talked about trades right now is the tremendous strength in the U.S. dollar index, which is marking its longest rally in 17 years. The U.S. dollar has now been climbing for nine straight weeks amid weakening yen and euro currencies.

The following ETFs represent a sample of the best and worst performing funds over the last five trading sessions.

Related Link: State Street Corporation Launches New Risk-Aware ETF

BEST: Cotton Prices

Commodity prices have been in decline in recent weeks, but cotton has recently started to show some relative strength. The iPath Dow Jones-UBS Cotton Subindex Total Return ETN BAL tracks an unleveraged basket of cotton futures contracts.

This ETN has gained 5.7 percent this week and has now convincingly broken back above its 50-day moving average. BAL has $22 million in total assets and charges an expense ratio of 0.75 percent.

Australia recently cut its forecasted output for cotton production by 29 percent this year amid a drought that is curbing harvest metrics. This news may have contributed to the recent rally as shortages of supply may impact global cotton stockpiles.

WORST: Brazil Small-Cap Stocks

Brazilian stocks fell heavily on Friday and small-cap equities were particularly affected by selling pressure. The iShares MSCI Brazil Small Cap Index ETF EWZS fell more than 9 percent this week. 

EWZS tracks 84 small company stocks in this key Latin American country and had been strengthening prior to hitting a speed bump in September. Additional volatility in Brazil is to be expected with the economy in recession and a key political election just four weeks away.

It may take some time to sort out the leadership and economic reforms that are needed to get this country back on track.

Another related fund to watch is the iShares MSCI Brazil Capped ETF EWZ, which is the most well-known index of large-cap stocks in Brazil. EWZ also experienced heavy selling this week and is sitting near key price support levels.