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Practice Management > Marketing and Communications > Social Media

Snapshot of ETF Movers

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We examine major developing trends in financial markets and the impact on ETF performance. Our analysis includes leading ETF performers along with laggards and specific actionable ticker symbols to invest in.

Social Media (SOCL)

Twitter (TWTR) is the newest face in the emerging social media sector. The San Francisco-based company pulled off its IPO and the shares stormed ahead by doubling. Although the shares were downgraded by Morgan Stanley in January, the social media space is quickly evolving and packed with opportunity. After bottoming near $12 on Nov. 12, 2012, the Global X Social Media ETF (SOCL) has climbed around 72%. SOCL’s top ten holdings include Twitter along with more established players like Google, LinkedIn and Facebook. The $125 million fund charges annual expenses of 0.65%.

Gold Miners (GDX)

Gold miners have posted three consecutive yearly losses, pushing down shares by almost 80%. In 2013, the SPDR Gold Shares (GLD) sank 28.33% and gold suffered its worst loss since 1981. Are better days ahead? According to Mebane Faber Research, the three-year average nominal return since 1920 when investing in industry sectors that fall 80% is an incredible 136%. That’s the sort of statistic value investors love. While that could bode future gains for GDX and leveraged ETFs like the Direxion Daily Gold Miners Bull -3x Shares (NUGT), the sector’s fate will ultimately be determined by how quickly physical precious metals bounce back.

Volatility (VIX)

ETPs that short volatility continue to be among the top performing areas. The VelocityShares Daily Inverse VIX ST Futures ETN (XIV) soared 107% in 2013 on top of a 154% gain in 2012. Meanwhile, the CBOE S&P 500 VIX fell 23.9% in ’13 and had its largest annual decline since 2009. Still, VIX bulls are braced for when higher volatility returns and when it happens, funds like the ProShares Short-Term Futures VIX ETF (VIXY) should jump.

3x Short Long-Term U.S. Treasuries (TMV)

As interest rates march higher, the value of long-term U.S. Treasuries erode. This developing investment theme began to develop momentum in May 2013, when 30-year yields bottomed near 2.82%. Since then, yields have shot higher and look poised to dance with 4%. ETFs that short Treasuries like the Direxion Daily 20+ Yr. Treasury Bear 3x Shares (TMV) and the ProShares UltraShort 2x 20+ Yr. Treasury ETF (TBT) gained between 24% and 34% last year. And if rates continue to rise, sliding bond prices could translate into more gains.

Emerging Markets (BKF)

Stocks from mega-emerging market countries like Brazil, Russia, India and China have been a rare sore spot for the equity market. In 2013, the iShares MSCI BRIC ETF (BKF), which follows stocks from these four juggernauts, slid 5.30% and was remarkably worse compared to the 21% gain for developed country stocks (VEA). If emerging markets don’t regain their footing soon, it could be a prime opportunity for bearish investors to cash in. ETFs like the Direxion Daily Brazil Bear 3x Shares (BRZS) and the ProShares Short MSCI Emerging Markets ETF (EUM) are designed to increase in value when these types of stocks fall.


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