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Best-Performing ETFs of Fourth Quarter

Inside the top ETFs of the fourth quarter.

By
This story originally appeared on Zacks

The fourth quarter normally remains favorable for investors as loads of merry-making events are lined up. Though the Omicron threat, inflationary worries and the Fed policy tightening rattled the broader market occasionally in the fourth quarter, upbeat earnings kept investors’ mood charged-up.

- Zacks

News that the effect of the highly-infectious Omicron strain of COVID-19 is milder than Delta, influx of more COVID-19 therapies and boosters and pent-up consumer demand made Wall Street rally possible.

Popular index ETFs like SPDR S&P 500 ETF Trust SPY, SPDR Dow Jones Industrial Average ETF Trust DIA and Invesco QQQ Trust QQQ have returned about 7.5%, 4.3% and 5.5%, respectively,  in the past three months. Against this backdrop, below we highlight a few best-performing ETFs of the fourth quarter.

Best ETFs

Simplify Volt Robocar Disruption And Tech ETF VCAR – Up 34.1%

The Simplify Volt RoboCar Disruption and Tech ETF seeks to concentrate in those few disruptive companies poised to dominate autonomous driving and then enhance the concentrated exposures with options.

Although tech stocks took a beating in the quarter on rising rate worries, some specific areas of this sector still held their heads high. VCAR is a clear beneficiary of Tesla’s surge (up 37.8%) despite strong volatility. Rivian's (RIVN) IPO success (up 32.6% so far) in the quarter also strengthened investors’ sentiment toward electric vehicles.

iPath Series B Carbon ETN GRN – Up 22.3%

Going green has become a mantra to save the earth. The governments around the world are focused on moving toward the goal of net-zero emissions by 2050 set by the 2015 Paris agreement. Some companies are trying to reduce their carbon footprint voluntarily.

Another way for companies to manage their carbon footprint is to buy and sell emission allowances. In the cap-and-trade system, a government sets a limit on overall emissions which is tightened over time. Big carbon emitters need to buy these pollution permits to stay under regularity caps (read: 5 ETF Areas Up At Least 70% in 2021).

This is where products like iPath Series B Carbon ETN (GRN), Kfa Global Carbon ETF (KRBN) (up 19.7%) won.

iPatha.B Cotton Subindex TR ETN BAL – Up 21.6%

Cotton prices jumped to a 10-year high in October, touching the highest levels since July 2011. Demand for textiles surged due to the global economic reopening, while India — a major cotton exporter — constrained shipments to help its domestic partners, per a CNBC article.

There are a few more reasons for the rally in cotton prices. Inclement weather, including droughts and heat waves, had weighed on cotton crops across the United States, which is the biggest exporter of the commodity in the world.

The underlying Bloomberg Cotton Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on cotton.

iPath Series B Bloomberg Coffee Subindex Total Return ETN JO – Up 19.3%

Coffee prices were super-hot in the fourth quarter as a supply crunch from Brazil to Vietnam pushed coffee prices to a seven-year high. Inclement weather, shipping disruptions and rising fertilizer costs are weighing on supplies. A rally in late November came after a decline in certified stockpiles in Brazil. In addition, early projections for Brazil’s 2022 crop indicate that yields will trail the nation’s last high-yielding cycle in 2020-21. That will prevent the rebuilding of stockpiles needed to weather the natural dip in the next harvest.



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Invesco QQQ (QQQ): ETF Research Reports

 

SPDR S&P 500 ETF (SPY): ETF Research Reports

 

SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports

 

iPath Series B Bloomberg Coffee Subindex Total Return ETN (JO): ETF Research Reports

 

iPath Series B Bloomberg Cotton Subindex Total Return ETN (BAL): ETF Research Reports

 

iPath Series B Carbon ETN (GRN): ETF Research Reports

 

Simplify Volt Robocar Disruption and Tech ETF (VCAR): ETF Research Reports

 

To read this article on Zacks.com click here.

 

Zacks Investment Research