Despite somewhat recovering from heavier losses earlier in the day, U.S. equities and stock exchange traded funds finished August on a down note but remained largely flat for the month.
Over August, the Dow Jones Industrial Average was down 0.1%, the Nasdaq Composite was up 0.9% and the S&P 500 dipped 0.1%.
The best performing non-leveraged exchange traded products for the past month include the VelocityShares VIX Short Volatility Hedged ETN (NYSEArca: XIVH) up 13.5%, United States Diesel-Heating Oil Fund (NYSEArca: UHN) up 13.2% and Guggenheim China Technology ETF (NYSEArca: CQQQ) up 12.6%.
The VelocityShares VIX Short Volatility-Hedged strategy utilizes a systematic approach to investing in VIX futures that has a net long or net short volatility position that varies due to daily changes in the volatility market. Specifically, the ETN has a -70% target net volatility allocation.
While UHN dipped, along with crude oil prices, in recent sessions, weather watchers are already anticipating a cold 2016/2017 winter ahead. Forecasters are expecting the development of a weak La Nina conditions in the central pacific over the next three months.
China’s market rebounded this month, with Chinese tech stocks leading the charge on a strong earnings season among large e-commerce companies and social media giant Tencent.
[related_stories]On the other end, the worst non-leveraged ETPs of the past month include the Sprott Gold Miners ETF (NYSEArca: SGDM) down 17.8%, iShares MSCI Global Gold Miners Fund (NYSEArca: RING) down 15.8% and Market Vectors Gold Miners ETF (NYSEArca: GDX) down 15.3%.
The month of August was marked by lackadaisical trading, with very thin and narrow trading that has been typical for the end of summer. Despite improving economic data at the start of the month, market participants found little incentive to buy into a market hovering around record highs.
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Moreover, the improving economic data further fueled speculation that the Federal Reserve may raise interest rates soon, which kept a lid on market gains.
The Federal Open Market Committee meeting minutes, though, did not provide any definitive outline for a rate hike schedule, with policy makers maintaining a patient view on rates and waiting for further signs of economic strength. Janet Yellen’s Jackson Hole speech also revealed little as she maintained her wait and see approach and hinted at a possible rate hike sometime this year.
Markets ended the month on a sour note as investors digested a pullback in crude oil prices ahead of Friday’s jobs report.
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