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Market Overview

Best And Worst ETFs Of The Week Amid Impressive China Rally

Best And Worst ETFs Of The Week Amid Impressive China Rally

International markets continue to dominate headlines on Wall Street, with emerging nations such as China showing incredible strength in early April trading. The industry benchmark iShares Large Cap China ETF (NYSE: FXI) pressed to multi-year highs this week on the back of heavy volume and unquenchable demand for well-known ADRs linked to Chinese stocks.

Domestic markets also posted solid gains, with the SPDR S&P 500 ETF (NYSE: SPY) moving over 1.5 percent higher. SPY is now nearing the upper end of its 2015 trading range, which means the bulls will soon have to prove they have the momentum needed to notch new all-time highs.

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

BEST: Chinese Sector ETFs

With Chinese stocks soaring this week, two small sector funds stood out above the rest. The Global X China Industrials ETF (NYSE: CHII) and Global X China Materials ETF (NYSE: CHIM) gained 19.5 percent and 18 percent, respectively, since Monday.

As their names imply, these funds provide targeted access to niche sectors within the Chinese economy. CHII contains 40 industrial-focused stocks, while CHIM holds 32 material-oriented companies. Both funds are relatively small with less than $10 million in assets.

Nevertheless, these ETFs were in the sweet spot this week and may attract further attention given the performance of China year-to-date.

Related Link: Worried About Interest Rate Sensitivity? New Low Volatility ETF Screens For It

WORST: Volatility Futures

One of the natural consequences of a stronger market over the last five trading sessions is a drop off in fear associated with the CBOE VIX Volatility Index. The iPath S&P 500 VIX Short-Term Futures ETN (NYSE: VXX) fell more than 11 percent this week as global equities ramped higher. VXX provides a way for index investors to trade equity market volatility by tracking VIX futures.

VXX dropped to new year-to-date lows, yet this ETN has accumulated over $615 million in new assets since the start of 2015. Clearly, large investors are betting on a return of volatility and prefer to use a vehicle like VXX as a hedging strategy.


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