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ETF Areas Beating S&P 500 QTD

After a lackluster stretch, the broader market has steadied in Q2, but occasional volatility is still showing up. The S&P 500 is striving to stay in the green from the year-to-date look (read: S&P 500 Again Shows Weakness: Go Short with These ETFs).

Though stabilization in oil price and a softer dollar are acting as tailwinds, soft corporate earnings and occasional global shocks are leaving investors apprehensive about the prospective run of the S&P 500.

However, this does not mean that all investing areas are giving muted performances. There are ETFs that have returned about 28% in the quarter-to-date frame (as of April 12, 2016) against 0.2% gain seen in the S&P 500-based ETF SPY. Below we highlight such ETF areas:

Mining

Miners have given an all-star performance this quarter. The strength was especially overt in the gold mining ETFs space. As the Fed seems to be in no hurry to hike interest rates this year, the U.S. dollar lately turned softer. This came as a boon for commodity ETFs. Plus, the looming volatility kept safe-haven assets like gold in demand (read: How to Trade in Gold ETFs After Robust 30-Year Rally?).

Along with the underlying metal gold, gold mining ETFs also put up great gains as these often trade as leveraged plays on gold. Not only gold, silver mining ETFs are also on the tear. Silver is widely used for industrial purposes. Improving manufacturing activities in various parts of the globe, particularly in China, boosted the demand for the white metal and the related mining ETFs.

Global X Gold Explorers ETF (GLDX) and PureFunds ISE Junior Silver ETF (SILJ) are among the many mining ETFs that have cashed in on this uptrend. GLDX and SILJ are up 28.12% and 20.65% so far this quarter (as of April 12, 2016). 

Energy

Finally oil prices staged a substantial recovery to start Q2. Mainly, hopes of production tightening and a reduction in U.S. crude inventory brought some relief into the field. Brent crude oil ETF United States Brent Oil (BNO) has posted gains of 10.7% in the quarter-to-date period. Other energy ETFs that have tacked on solid gains are SPDR S&P Oil & Gas Explor & Prodtn ETF (XOP) (10.3%) and iPath Bloomberg Energy Subindex Total Return ETN (JJE) (up 10.04%) (read: 5 ETFs to Buy if Oil Stays at $40).

Biotech

The biotech corner of the broader healthcare space has also turned around this month. A dovish Fed that gave cues of a few more month of cheap dollar inflows, encouraging industry trends and compelling valuation helped this sector to soar in April. ALPS Medical Breakthroughs ETF (SBIO) is the major beneficiary of the bounce in the biotech space. SBIO is up 7.44% (as of April 12, 2016) (read: Biotech Regain Health: ETFs to Prescribe).

International Preferred Stocks

In a bid to fight the rock-bottom interest rate environment prevailing in foreign shores, investors turned to high-yielding preferred stock ETF. Not only do preferred stocks offer considerably higher yields (often exceeding 5%), they also provide an opportunity for capital appreciation.
They are hybrid securities having the characteristics of both debt and equity. The preferred stocks pay stockholders a fixed, agreed-upon dividend at regular intervals, like bonds. iShares International Preferred Stock ETF (IPFF), which yields about 4.89% annually and has returned 6.23% so far this quarter (as of April 12, 2016).

International Momentum

Though global growth issues are at the top of investors’ mind lately, this international momentum ETF has offered 5.3% returns to investors. The return of risk-appetite in the global market following an oil price recovery has led MomentumShares International Quant Momentum ETF (IMOM) to add 5.3% so far this quarter (as of April 12, 2016).

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GLBL-X GOLD EXP (GLDX): ETF Research Reports
 
PF ISE-JS SC ME (SILJ): ETF Research Reports
 
US BRENT OIL FD (BNO): ETF Research Reports
 
MOMO-INT QNT MO (IMOM): ETF Research Reports
 
ISHARS-IPSIF (IPFF): ETF Research Reports
 
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