Best ETF Of 2015 Crushed To Start 2016

Markets are routed on the first trading day of 2016.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

Stock markets were slammed on Monday as global growth worries, combined with geopolitical concerns, sent investors fleeing. The rout began in Asia, where trading in Chinese stocks were halted after the market fell by 7%, automatically triggering a circuit breaker that suspended trading for the day.

ASHR Mauled 9%

The sell-off in China shares brought back memories of 2015’s summer plunge in the country's stock market, when the Shanghai Composite Index tumbled day after day.

Analysts attributed the latest round of selling to renewed concerns about China's economy following disappointing manufacturing data. The upcoming lifting of restrictions on stock sales by large investors also weighed on the market.

The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR | F-54) tanked by more than 9% at midday. The fund lost about 2.4% in 2015.


Even worse, the Market Vectors ChinaAMC SME-ChiNext ETF (CNXT | D-48)—the top-performing ETF of 2015, with a 41% gain—dropped nearly 11%.

1-Year Returns For ASHR, CNXT

Energy Shares Sag Despite Middle East Tensions

Meanwhile, the other big story of the day came from the Middle East, as tensions flared following the execution of a prominent Shiite cleric in Saudi Arabia. The death of Sheikh Nimr al-Nimr fueled fury in Iran, where protestors attacked the Saudi embassy. In turn, Saudi Arabia expelled Iranian diplomats from the country, officially cutting off diplomatic ties with its rival.

Initially, oil moved sharply higher on this latest news. But prices soon retreated as traders reasoned that the likelihood of a direct conflict between the two oil superpowers was unlikely, and that the market remains oversupplied.

Energy-linked ETFs were back on the downswing after initially opening higher.



The Energy Select SPDR (XLE | A-91) sagged more than 1%, remaining just a hair above its recent multiyear low.

Another notable mover today was the Market Vectors Russia ETF (RSX | B-71), down more than 3% and closing in on its recent lows. Russia is one of the largest crude oil producers in the world, and its economy has been battered by the pain in the oil patch.


1-Year Return For XLE, RSX

Worst Start For US Stocks In 15 Years

The double whammy of China and geopolitical fears sent the U.S. stock market reeling. The S&P 500 declined by as much as 2.7%, the worst start to a year since 2001.


The stock index struggled near the 2,000 level, a key area of support according to technicians. A breakdown could open the door to more selling and trip toward last year's low of 1,867.


Price Chart For S&P 500


Contact Sumit Roy at [email protected].



Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.