ETF Performance Report: Q4 & December | ETF Trends

U.S. equities and stock exchange traded funds closed out the last day of 2014 on a down beat but extended the bull run into its sixth year, the longest streak since the 90s.

The Dow Jones Industrial Average rose 7.5% over 2014. Meanwhile, the Nasdaq Composite increased 13.4% and the S&P 500 added 11.4%.

The top performing non-leveraged exchange traded products of 2014 include the PowerShares China A-Share Portfolio (NYSEArca: CHNA) up 58.1%, iPath Global Carbon ETN (NYSEArca: GRN) up 54.9% and iShares MSCI India Small-Cap ETF (BATS: SMIN) up 50.0%.

One of this year’s most prominent themes has been investors’ affinity for ETFs tracking China’s A-shares, the stocks trading on mainland exchanges in Shanghai and Shenzhen. Strong investor demand for A-shares ETFs have forced some funds to bump up against their respective Renminbi Qualified Foreign Institutional Investor (RQFII), which allows the funds to purchase A-shares equities. [Another Creation Limit for an A-Shares ETF]

GRN tracks the the Barclays Capital Global Carbon Index, which follows the performance of the most liquid carbon related credit plans, including both the European Union Emission Trading Scheme and the Kyoto Protocol’s Clean Development Mechanism. Carbon trading is gaining attention, with a new market that offers businesses incentives other than taxes and punitive measures to cut overall emmissions.

India equities surged this year on hopes that the new Narendra Modi administration will enact reforms to stimulate an flailing economy and the quickly depreciating rupee currency. [U.S. Investors Have Really Warmed to India Stocks, ETFs]

The Dow Jones Industrial Average rose 6.5% in the fourth quarter. Meanwhile, the Nasdaq Composite increased 7.5% and the S&P 500 added 6.2%.

Over the fourth quarter, the best non-leveraged ETFs include the CHNA up 52.6%, Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR) up 41.0% and Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK) up 37.3%.

Investors can’t seem to get enough of Chinese A-shares ETFs, which allow U.S. investors to directly trade in mainland Chinese equities. Last week, investors added $34.6 million to ASHR to complete the longest stretch of asset gains since its November 2013 debut, according to data compiled by Bloomberg. More than $300 million has been put into the fund since the beginning of last month as it soared 35 percent. [A-Shares ETFs not Lacking for Fans]

Next year could bring more upside for A-shares ETFs as local Chinese investors embrace equities. With local investors warming to equities over property, Goldman Sachs forecasts an estimated 400 billion yuan will depart China’s property market next year with the destination being A-shares equities.

At the bottom of the pack, the worst performing non-leveraged ETPs over the past three months include the iPath S&P GSCI Crude Oil Index ETN (NYSEArca: OIL) down 44.3%, PowerShares DB Oil Fund (NYSEArca: DBO) down 42.3% and United States Oil Fund (NYSEArca: USO) down 41.0%.