Image: Bigstock

The month of March proved to be extremely volatile for the U.S. stock market. While the decline in yields and the Fed’s dovish comments ignited a rally early in the month, the failure of several banks and the fear of contagion across the globe led to a series of sell-offs. Amid the wild swings in the stock market, the technology sector emerged as the biggest winner while banks lost billions.

In fact, the tech-heavy Nasdaq-100 surged to a new bull market, driven by the flight to mega-cap cash-rich technology stocks amid the bank turbulence and decline in yields. Mega-caps like Apple (AAPL - Free Report), Microsoft (MSFT - Free Report), and Amazon.com (AMZN - Free Report) saw more than $600 billion in a combined rally this month. On the other hand, the 10 largest U.S. banks have lost about $243 billion in market capitalization since Mar 8, per a Forbes article.

The banking scare has raised the appeal for the yellow metal as a safe haven and as a store of value. The yellow metal jumped above the 2,000 mark after the sudden collapse of two U.S. regional banks earlier this month, which led to speculation that the Fed might pause rates hikes to avoid a wider fallout from the global banking system turmoil. Bitcoin, the largest digital currency by market value, also gained momentum and topped 26,000 for the first time since June 2022 in mid-March when market sentiments were positive.

Given this, we have highlighted the three best and worst-performing ETFs of Q1:

Best ETFs

Sprott Junior Gold Miners ETF (SGDJ) – Up 22.7%

Sprott Junior Gold Miners ETF follows the Solactive Junior Gold Miners Custom Factors Index, which measures the performance of junior gold producers with the strongest revenue growth and junior exploration companies with the strongest stock price momentum. It holds 44 stocks in its basket, with Canada-based firms making up the largest share at 55.6%, followed by Australia (39.3%).

Sprott Junior Gold Miners ETF has amassed $106.3 million in its asset base and trades in a lower volume of around 40,000 shares a day. It charges 50 bps in annual fees from investors.

Hashdex Bitcoin Futures ETF (DEFI) – Up 20.3%

Hashdex Bitcoin Futures ETF provides access to bitcoin through a cost-effective and regulated exchange-traded fund. It does not invest directly in bitcoin but provides price exposure to the crypto asset through bitcoin futures contracts. This gives investors the opportunity to capitalize on the cryptocurrency’s growth potential, its store of value characteristics, and the prospect of a decentralized future, without the complexities of self-custody.

Hashdex Bitcoin Futures ETF has accumulated $1.8 million in its asset base since its inception last September. It charges 92 bps in annual fees.

Breakwave Dry Bulk Shipping ETF (BDRY) – Up 18.4%

The dry bulk shipping market has gained momentum due to a rise in demand across all vessel segments. It is the only freight futures ETF exclusively focused on the dry bulk shipping market through a portfolio of near-dated freight futures contracts on dry bulk indices. Breakwave Dry Bulk Shipping ETF holds freight futures with a weighted average of approximately three months to expiration, using a mix of one-to-six-month freight futures based on the prevailing calendar schedule.

Breakwave Dry Bulk Shipping ETF has accumulated about $101.1 million in AUM and trades in a good volume of about 479,000 shares per day on average. It charges a higher annual fee of 3.50%.

Worst ETFs

iShares U.S. Regional Banks ETF (IAT) – Down 29.7%

iShares U.S. Regional Banks ETF offers exposure to 35 small and mid-cap regional bank stocks by tracking the Dow Jones U.S. Select Regional Banks Index. It is largely concentrated on the top three firms with a double-digit allocation each.

iShares U.S. Regional Banks ETF has amassed $739.7 million in its asset base while seeing a good volume of 647,000 shares a day. The product charges 39 bps in annual fees and has a Zacks ETF Rank #4 (Sell) with a High risk outlook.

United States Natural Gas Fund (UNG) – Down 25.5%

Natural gas prices fell to the lowest since September 2020 owing to mild weather and lower-than-previously expected heating demand. United States Natural Gas Fund provides direct exposure to the price of natural gas on a daily basis through futures contracts. If the near-month contract is within two weeks of expiration, the benchmark will be the next month's contract to expire. The natural gas contract is natural gas delivered at the Henry Hub, LA.

The United States Natural Gas Fund has an AUM of $973.1 million and trades in a volume of around 23 million shares per day. UNG has a 1.11% expense ratio.

Advocate Rising Rate Hedge ETF (RRH) – Down 21.6%

The decline in yields led to a plunge in RRH as it seeks to generate capital appreciation during periods of rising long-term interest rates, specifically interest rates with maturities of five years or longer. Advocate Rising Rate Hedge ETF is a multi-asset ETF and seeks to achieve its investment objective primarily by investing in a combination of U.S. Treasury securities; forwards, futures or options on various currencies; long and short positions on the short and long-end of the Treasury or swap yield curve via futures, swaps, forwards and other over-the-counter derivatives; long and short positions on equity indexes and investment companies, including ETFs, and commodity futures and options.

Advocate Rising Rate Hedge ETF has accumulated $29.2 million in its asset base and charges 85 bps in annual fees. It trades in an average daily volume of 35,000 shares.

More By This Author: