Real Estate, Financials Lead In August

September 01, 2009

Real estate and financials lead in August as emerging markets ETFs lag.


Top performers among exchange-traded funds during August were mostly in the financials and real estate sectors, while emerging market funds didn’t perform as well as they have in prior months this year, according to the latest data from Morningstar.

RevenueShares Financials Sector (NYSEArca: RWW) jumped 22% in August, mainly as a result of its Citigroup and American Express holdings, which together comprise nearly 7% of the fund. Citigroup rose 58% in the month, while American Express shares climbed 19%.

Leveraged financial sector ETFs Rydex 2x S&P Select Sector Financial (NYSEArca: RFL) and Ultra Financials ProShares (NYSEArca: UYG) also made the list of the 10 top-performing ETFs in August, rising 36% and 31%, respectively. SPDR S&P International Financial Sector (NYSEArca: IPF) strengthened 16%.

In real estate, MacroShares Major Metro Housing Up (NYSEArca: UMM) jumped 36%, while Ultra Real Estate ProShares (NYSEArca: URE) made 35% in gains as investors bid up holdings such as Simon Property Group, which managed to raise $500 million by the sale of five-year senior notes. The Indianapolis shopping mall developer comprises 6.9% of URE’s holdings, and rose about 14% in August.

Leveraged technology ETFs also did well. Ultra Technology ProShares (NYSEArca: ROM) rose 6.3%, giving it an 88% gain this year. Ultra Semiconductor ProShares (NYSEArca: USD) notched up 8.9%, putting it over double its year-to-date low, as Intel made an end-of-month recovery after raising third-quarter revenue and gross margin expectations on Aug. 28. Intel accounts for a chunky 32% of USD’s net asset value.

Biotech ETF iShares Nasdaq Biotechnology (NasdaqGM: IBB) ended the month 0.6% lower, despite a rise of 23% in Mentor Capital’s Cancer Immunotherapy Index since July 10, when the index was created.

China’s 21% sell-off led to negative gains in iShares FTSE/Xinhua China 25 (NYSEArca: FXI) and iShares MSCI Emerging Markets (NYSEArca: EEM), which dipped 6% and 1.3%, respectively. ProShares Ultra Short FTSE/Xinhua China 25 (NYSEArca: FXP), a leveraged ETF that mimics twice the inverse performance of the FTSE/Xinhua China 25 Index, rose 10.9%, after hitting a one-month high Monday. (See story here.)

An exception to the poor performers among emerging market ETFs was Market Vectors Brazil Small-Cap (NYSEArca: BRF), which climbed 11.3% in what was one of the ETFs’ best-performing months of the year.

With some sharp volatility in August, investors were best off putting their money in the recently launched ProShares Credit Suisse 130/30 (NYSEArca: CSM), which surged 75%. CSM tracks the Credit Suisse 130/30 Index, an actively managed long/short index designed as a performance comparison point for portfolio managers.


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