Stock ETFs enjoyed decent gains in September to cap off a solid third quarter as gold and silver miner funds paced the advance for both periods.
The major equity indices tested 2007 highs in the third quarter although the market stumbled into the end of the month and quarter.
Top performing ETFs in the third quarter included those that track the mining sector, including Market Vectors Gold Miners (NYSEArca: GDX), Market Vectors Junior Gold Miners (NYSEArca: GDXJ), Global X Silver Miners ETF (NYSEArca: SIL), iShares MSCI Global Silver Miners Fund (NYSEArca: SLVP) and Global X Junior Miners ETF (NYSEArca: JUNR).
Residential housing ETFs such as SPDR S&P Homebuilders (NYSEArca: XHB) and iShares DJ U.S. Home Construction (NYSEArca: ITB) also enjoyed a solid quarter although they buckled in late September. [Builder ETFs Sliding with Home Sales]
Precious metals like gold and silver regained lost ground over the quarter, but mining stocks outperformed the underlying physical metals as investors jumped at cheap valuations, especially in light of potential inflationary pressures brought on by the Fed’s additional quantitative easing measures.
The first month of the quarter started off in back-and-forth trading after Spain requested bailouts for its ailing financial sector and the European Central Bank promised to do “whatever it takes” to help the Eurozone. [ETF Performance Report: July]
Stocks continued to rally through August on the rosier Eurozone outlook and in anticipation of additional Federal Reserve easing. [ETF Performance Report: August]
The markets hit multi-year highs before pulling back in the last week in September after the Federal Reserve’s mortgage-backed securities buying plan helped trigger a sharp rally in the markets. At the end of the month, the market’s attention was back on the potentially softening global economy.