It's time to look back to the best and the worst of 2014. Here, we'll do a quick recap of the ETFs that rocked and flopped this year with the ups and downs in the global economy and resulting flow and ebb in the investing world.
It's important to start off by saying that the U.S. economy delivered an all-star performance from the second quarter, leading the S&P (SPX) to soar and cross the 2,000 mark for the first time in history.
But all this happened after a cold snap in Q1 that left the country and its economy shivering. Also, a prolonged geo-political tension between the West and Russia following the Crimea annexation by the latter, sagging economies of the Euro zone, Japan and China, plus worries over the timing of first interest rate hike in the U.S. made the year an eventful one. The allure of income and safe investing was thus alive in 2014.
On the other hand, almost all commodities had an extremely choppy ride this year with the oil price retreating to five-year lows. Precious metals like gold and silver were also dark spots in the 2014 calendar.
Let's take a look at three top and worst performing ETFs of the year so far.
Top Performers
PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ) – Up 50.2%
Global growth worries, apparent uncertainty in the Fed policy, spread of Ebola virus and geo-politics pushed the 10-year U.S. Treasury bond yield close to 2% this year despite the end of QE. This made ZROZ a top performer on the year.
The $94 million fund tracks the BofA Merrill Lynch Long Treasury Principal STRIPS Index, focusing on treasury principal STRIPS that has 25 years or more of final maturity. It focuses on long-term bonds with both effective maturity and effective duration of 24.24 years. ZROZ has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
iPath Dow Jones UBS Coffee ETN (JO) – Up 49.3%
Coffee made a remarkable comeback this year after a steep fall last year thanks to the weather and coffee leaf rust concerns which dented supplies. To add to this, consumption is fast brewing in major growing nations like Brazil, Vietnam and Colombia along with its already widespread use in First-World nations.
