3 Of The Best-Performing ETFs Of December

The holiday season usually defines December with everyone in the mood for shopping. Naturally, the market energy brims over to stocks and ETFs related to consumer discretionary, with retail getting maximum investor attention.

This past year was no exception thanks to higher e-commerce sales and surging semiconductors for use in Smartphone upgrades, new tech-savvy gadgets and advance technologies, the mood was rather dour initially. 

In fact, Thanksgiving 2014 was not at all happy for the U.S. markets, though the sluggishness in the markets ended as the year drew to a close and the S&P 500 saw a flat December. Needless to mention, no consumer discretionary ETF emerged a winner in the final and busiest shopping month of the year. Thus, it should be worthwhile to take a look at the ETFs which investors were most impressed with in December instead (read:

).

The much-hyped commodity of oil is refusing to be off investors' radar in any form. Oil prices lost about 45% in the second half of 2014. Since a long call on this commodity has punished investors brutally, shorting the commodity turned out as a superb idea.

As a result, DNO – an exchange-traded security designed to inversely reflect the movements of light, sweet crude oil – was the top performer of the month with more than 22% gain. The $11 million product charges 60 bps in fees (read:

).

Though the Chinese economy has waned all through the year, China A-shares that track stocks listed on the Shanghai or Shenzhen exchanges delivered all-star performances. The credits go to the easing in A-Shares trading for foreigners. The space was so far tightly held by and limited to domestic investors.

This is an actively managed ETF providing exposure to the China A-Share market using Singapore exchange FTSE China A50 Index futures contracts. The fund is an overlooked choice having generated $23.2 million in AUM.

The option is illiquid with average daily volume of about 15,000 shares.  It charges 50 bps in fees per year from investors. CHNA was up 20% in December (read:

).

Heightened volatility in global markets especially in the Euro zone, Russia, Japan and China undermined risk-on trade sentiments in an otherwise steady U.S. market. Oil price slump was yet another reason which steered volatility in the stock market.

This sluggishness boosted the volatility-linked (usually VIX-linked) investments in December. Volatility in the stock market is represented by the CBOE Volatility Index (VIX), and is also known as the fear gauge.

VXX is the most popular volatility ETN on the market, focusing on the S&P 500 VIX Short-Term Futures Index. The index offers exposure to a daily rolling long position in the first and second month VIX futures contracts (read

).

The note has amassed nearly $970 million in AUM and charges 89 bps in fees per year from investors. The product added about 18.7% over the past month.

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