While the equities market is still positive so far this year, U.S. stocks and exchange traded funds retreated over March as concerns over the U.S. dollar strength and energy sector weakness weighed on the earnings outlook ahead.
The Nasdaq Composite gained 3.0% and the S&P 500 rose 4.4% so far this year. Meanwhile, the Dow Jones Industrial Average dipped 0.2%.
The top non-leveraged ETF performers over Q1 include Market Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: CNXT) up 50.5%, Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap ETF (NYSEArca: ASHS) up 39.4% and Guggenheim Solar ETF (NYSEArca: TAN) up 31.6%.
Chinese stocks and mainland A-shares ETFs are surging on hints of further easing and Beijing’s planned infrastructure projects to link its markets with Europe and Africa. The central bank signaled it could ease its monetary policy to stimulate the slowing economy and the government announced a massive infrastructure project to build a modern Silk Road to Europe and Africa. [China ETFs Stimulated by Stimulus, Infrastructure Spending]
Solar ETFs have powered ahead and are among the leading sectors over the first quarter after underperforming the equities market last year. Solar stocks have been steadily strengthening in response to the growing discussion over China’s severe pollution problem, which was recently highlighted in a 104-minute documentary video over the weekend titled “Under the Dome.” China has also raised its solar capacity target in an attempt to rein in its pollution problems. For 2015, Beijing has promised to add almost two-and-a-half times as much capacity as the U.S. added last year. [Solar ETFs Perform Radiantly in Q1]
At the bottom end, the worst performing non-leveraged funds so far this year include the iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN (NYSEArca: GAZ) down 37.3%, C-Tracks on Citi Volatility Index ETN (NYSEArca: CVOL) down 28.2% and iShares MSCI Brazil Small-Cap ETF (NYSEArca: EWZS) down 24.8%.
Over the past month, the Dow was down 2.0%, the Nasdaq declined 1.7% and the S&P 500 was 1.8% lower.
The U.S. equities market started out fine enough, rebounding off the February sell-off, as improving economic data and rising employment numbers helped support gains. Additionally, increased merger activity helped raise demand for risk.
Stocks also strengthened in response to the Federal Reserves more dovish outlook, which clamped down on speculation of a interest rate hike any time soon, and the a slight pullback in the U.S. dollar, which has been hurting exports.
However, the market failed to break through its previous highs, falling off mid-March in response to softer economic data.
Top performing non-leveraged ETFs over the past month include ASHS up 23.9%, CNXT up 22.6% and Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK) up 18.0%.
The worst performing non-leveraged ETFs for the past month include the iPath Pure Beta Sugar (NYSEArca: SGAR) down 16.0%, Global X FTSE Greece 20 ETF (NYSEArca: GREK) down 15.3% and iShares MSCI Global Gold Miners ETF (NYSEArca: RING) down 14.5%.
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Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.