Market Overview

Best And Worst ETFs Of The Week Amid Treasury Buying Spree

Best And Worst ETFs Of The Week Amid Treasury Buying Spree

The stock market posted tepid declines this week amid choppy trading that saw prices whipsaw in both directions. The SPDR S&P 500 ETF Trust (NYSE: SPY) finished the month of May with gains of less than 2 percent and will now face the tumultuous summer months that have traders on edge.

The CBOE VIX Volatility Index has hit its lowest level of the year, which seemed to prompt a return of nervous energy in the markets. As a result, Treasury bonds were the recipients of buying activity as fears over a Federal Reserve rate hike failed to overcome weaker than expected economic data.

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

BEST: Long-Term Treasury Bonds

Treasury yields at the long end of the interest rate curve fell significantly last week, which sent the PIMCO 25 Yr Zro Cupn US Ty Inx Fd ETF (NYSE: ZROZ) over 4.5 percent higher. This ETF invests in a basket of long-duration U.S. Treasury STRIPS that are extremely sensitive to interest rate fluctuations.

The effective duration of ZROZ is 27 years, making it an even stronger direct bet on rising Treasury bond prices than the venerable iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE: TLT). ZROZ currently has over $115 million in total assets, charges an expense ratio of 0.15 percent and was one of the best performing ETFs of 2014.

Related Link: Best And Worst ETFs Of The Week Amid New All-Time Highs

WORST: Natural Gas Futures

After attempting a rally near the beginning of the month, natural gas futures prices have once again rolled over. This sent the iPath Bloomberg Natural Gas Subindex Total Return ETN (NYSE: GAZ) down more than 16 percent this week.

GAZ tracks an unleveraged basket of natural gas futures contracts through an exchange-traded note structure. This ETN has $11.6 million in total assets and charges an expense ratio of 0.75 percent.

Natural gas prices have continued to display deflationary pressures that many commodity-related markets have felt over the last year. Another fund heavily affected by this trend is the United States Natural Gas Fund, LP (NYSE: UNG), which dropped nearly 10 percent this week.

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Posted-In: CBOE VIX Volatility Index etn Federal ReserveSector ETFs Broad U.S. Equity ETFs Trading Ideas ETFs Best of Benzinga


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