The U.S. stock market, as well as the European equity market, has done a bearish roll over in the past week and a half, and that’s sent the major averages down about 3% since July 28. The selling last week actually erased the year-to-date gains on the Dow Jones Industrial Average, and the bellwether index now is in negative territory for the year.
European equities also are in the red now for 2014, with the benchmark regional exchange-traded fund (ETF), the iShares Europe (IEV), now breaking down below its 200-day moving average. The chart here shows IEV’s rapid descent since hitting a new 52-week high in early July.
The fall of European equities, as well as the recent downtrend in U.S. markets, might make you think that the bear has invaded the entire globe. Well, if you thought that, then you haven’t been looking far enough to the east.
Take a look at the table below of the top-performing ETFs in July.
Top 10 ETF Winners in July
|UAE||iShares MSCI UAE Capped ETF||15.97|
|QAT||iShares MSCI Qatar CP ETF||13.14|
|CHIX||Global X China Financials||11.85|
|CHIM||Global X China Materials ETF||11.15|
|CHNA||PowerShares China A-Share||10.79|
|VIXY||ProShares VIX Short-Term||10.67|
|PEK||Market Vectors China ETF||10.51|
|CHXX||Emerging Global Shares Index||10.49|
|ASHS||DB Harvest CSI 500 Ch A Sh||10.47|
|MES||Market Vectors Gulf States ETF||10.38|
As you can see, the frontier markets of the United Arab Emirates and Qatar were the two top-performing markets. That performance was followed closely by five China sector funds, including a relatively new China A-shares fund. The volatility we witnessed in July helped boost the VIX, and that was reflected in the gains in the ProShares VIX (VIXY).
The July top 10 ETF list clearly shows that frontier markets, emerging markets and China funds are rocking while their domestic and European brethren are rolling over. The outperformance of the Chinese market is of particular interest to readers of my Successful ETF Investing newsletter, as we are currently recommending several China-focused ETFs for inclusion in our model portfolios.
If you’d like to find out how to make your portfolio rock alongside China, then I invite you to check out Successful ETF Investing today.