It was not a memorable April for U.S. stocks, but it was not a dreadful month, either. When parsing through the best and worst exchange traded funds of the month, some obvious themes emerge.
Among the worst ETFs, momentum funds suffered. April’s worst non-leveraged ETFs run the gamut of social media, biotechnology, Internet and other momentum fare that investors have repudiated. [April’s Worst ETFs: Momentum Lost]
Looking at last month’s top ETFs, two themes jump out: Commodities and global ideas. Many of last month’s best ETFs and ETNs are either direct commodities plays, global funds or global funds with some type of commodities exposure. The leader, however, is not too surprising because it has been leading all year. That honor goes to the…
iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN (NYSEArca: JO)
April gain: 16%
Comment: After a pullback in March, coffee prices surged again in April. Weather observers are predicting that an El Nino weather pattern will cause further damage to crops in Brazil, the world’s largest grower of coffee beans, during the peak of the harvesting season. JO is this year’s top-performing non-leveraged exchange traded product with a gain of 86.3%. [Coffee ETNs Percolate as Storms Threaten Brazil Crops]
iShares MSCI Turkey ETF (NYSEArca: TUR)
April gain: 12.8%
Comment: TUR’s place on this list is something of a surprise due to Turkey’s deep trade and business ties to Russia, but the ETF has surged nonetheless. Still, there are signs investors are leery about TUR’s ability to keep climbing in the face of geopolitical headwinds. Last week, investors pulled $18 million from the fund.
First Trust ISE-Revere Natural Gas Index Fund (NYSEArca: FCG)
April gain: 9.2%
Comment: FCG was April’s top-performing non-leveraged sector ETF and the United States Natural Gas Fund (NYSEArca: UNG) was the second-best commodities fund after JO. Without a substantial increase in supply, natural gas inventory levels could rise to 3.422 trillion cubic feet by late October, or 11% short of last year’s levels for the same period, according to the Energy Information Agency. That bodes well for the medium-term prospects for UNG and FCG. [Low Production Outlook is Supporting Natural Gas ETFs]
PowerShares Dynamic Energy Exploration & Production Portfolio (NYSEArca: PXE)
April gain: 8.2%
Comment: While PXE offers plenty of exposure to exploration and production companies, a trait investors are accustomed to with the largest energy ETFs, the fund also features one of the largest downstream allocations of any ETF as refining and marketing names account for 34.3% of the fund’s weight.
Not only has the ETF been regularly making new all-time highs in recent weeks, its valuations compare favorably with those of the broader energy sector and U.S. stocks.
Global X Nigeria Index ETF (NYSEArca: NGE)
April gain: 8.3%
Comment: Nigeria’s OPEC membership has helped lift Nigeria as investors have prized energy-related investments. Last month, Jim O’Neill, the former chairman of Goldman Sachs Asset Management and the man that brought the world the now ubiquitous BRIC and MINTs emerging markets acronyms, spoke favorably about the economic opportunity offered by what is now Africa’s largest economy.
SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP)
April gain: 8%
Comment: Like PXE, XOP has been a frequent visitor to the new all-time club in recent weeks. The equal weight ETF has a median market value of $4.17 billion, indicating it is a viable alternative for investors looking for energy exposure beyond mega-cap, integrated oil names.
Market Vectors Gulf States Index ETF (NYSEArca: MES)
April gain: 6.1%
Comment: Continued strength in Qatar and United Arab Emirates stocks continues to lift MES. Those countries will soon join the MSCI Emerging Markets Index, but that transition will not alter the make up of MES or the WisdomTree Middle East Dividend Fund (NasdaqGM: GULF), which also turned in a solid April performance.