The Guggenheim Solar ETF (NYSEArca: TAN) and the Market Vectors Solar Energy ETF (NYSEArca: KWT) both lost more than 30% last year and both were reverse split. This year, TAN and KWT are two of the best non-leveraged sector ETFs.
As for this year’s beaten down trio, KOL seems like a good candidate for a 2014 bounce. The Chinese economy is steadying. So is India and natural gas prices are on the rise. In the past three months, the U.S. Natural Gas Fund (NYSEArc: UNG) is higher by 10% and higher gas prices often benefit coal producers. KOL is already showing signs of life and is up 2.1% since Nov. 20. [Resources ETFs Coming Back From the Dead]
The situation with GDX and any comparable ETF is more murky. Yes, it can be said that ample bad news is priced into gold mining stocks, but other questions need to be answered. First, will gold prices rise next year? Second, have investors forgotten that when spot gold rose in 2011 and 2012 mining stocks and ETFs still declined? Third, how deep will tax-loss selling be? [Tax-Loss Selling Could Plague Mining ETFs]
Fourth, how many more investors are willing to keep dollar-cost averaging into gold mining ETFs? After all, GDX has seen INFLOWS of $2.4 billion this year. Some big-name hedge funds have also been reluctant to unload losing mining trades.
In what may a positive sign for mining bulls, McDonald notes that the corporate bonds of some gold miners have been perking up, and since credit leads equity, that could be good news for the miners.
Market Vectors Coal ETF