ETF Winners And Losers Of Last Week

Wall Street saw wild swings last week buoyed by U.S.-China trade conflicts, weak global economic data, low inflation, decline in yields and political unrest in Hong Kong. In fact, U.S. stocks saw the biggest one-day drop of the year on Aug 13 as 10-year Treasury yields broke below 2-year yields, resulting in an inverted curve for the first time since June 2007 and signaling that the world’s biggest economy could be heading for a recession.

However, delay in tariff, higher hopes of near-term support from major central banks, stronger-than-expected retail sales and better earnings from semiconductor firms led to a rally to end the week. Markets are anticipating that the European Central Bank will cut rates in September and resume a bond-buying program, according to Reuters. China is also planning to roll out a domestic stimulus package to support disposable income, while Mexico is the latest country to cut interest rates last week.

In spite of the two-day rally, Wall Street still logged its third consecutive weekly loss. Given this, we have highlighted last week’s best and worst-performing ETFs:

Winners

PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZFree Report)

Treasury ETFs gained as yields fell sharply on a flight to safety. Notably, the products tracking the long end of the yield curve provide a safe haven and thus ZROZ, which follows the BofA Merrill Lynch Long Treasury Principal STRIPS Index, gained 7.1% last week. It holds 20 securities in its basket with effective maturity and effective duration being 27.35 years each. This fund has $337.6 million in AUM and a light average daily volume of 31,000 shares. It charges 15 bps in annual fees and has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook.

Breakwave Dry Bulk Shipping ETF (BDRY - Free Report)

Shipping stocks sailed smoothly last week as Typhoon Lekima disrupted shipping in the East China Sea leading to a rise in the dry bulk freight costs. As a result, BDRY rose 6.5% last week. This is an actively managed ETF that seeks to provide exposure to daily changes in the price of dry bulk freight futures by tracking the performance of a portfolio consisting of a three-month strip of the nearest calendar quarter of futures contracts on specified indexes that measure rates for shipping dry bulk freight. The fund has accumulated about $1.9 million in AUM. It trades in a paltry volume of about 8,000 shares per day on average and charges a higher annual fee of 1.85%.

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