Towards the end of every year, chatter starts about that year’s laggards turning into the following leaders.
Call it a dash to trash, call it a resurgence, and yes, call it comeback as five of the top-11 non-leveraged exchange traded funds to start 2014 are funds that were savagely punished last year. Translation: Nearly half of this year top-11 ETFs are precious metals mining funds. The “friending fear” trade was proffered up by some astute minds on Wall Street late last year and included the idea of being long the Market Vectors Gold Miners ETF (NYSEArca: GDX), an ETF that lost 54% in 2013. [Embrace Fear With ETFs]
The trade has worked. With Tuesday’s 1.6% gain, GDX, the largest gold miners ETF by assets, is up 12% this year as traders have embraced the notion that this might be a truly rare buying opportunity in mining stocks. [A Rare Opportunity in Gold Miners]
The two best non-leveraged ETFs to this point in 2014 are two funds that spent significant time on last year’s 10 worst list: The PureFunds ISE Junior Silver Small Cap Miners/Explorers ETF (NYSEArca: SILJ) and the Global X Gold Explorers ETF (NYSEArca: GLDX) lost an average of about 58% last year, but both are up more than 24% in 2014. Another one of last year’s worst offenders, the iShares MSCI Global Silver Miners ETF (NYSEArca: SLVP) is higher by 14% this year. [Silver Miners Outperforming as Metal Rises]
The Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) should not be overlooked. GDXJ plunged 61% last year and was reverse split along the way. This year, the ETF is up nearly 15%.