Each week, I like to publish the past week's hottest ETFs to share some new trends and niche ETFs (and ETNs) out there (check out this full
ETF List of ~800 - every exchange traded fund I could find) and give investors some new investing/diversification ideas. Last week, it was metals, metals, metals. I made sure to include both conventional and leveraged ETFs in this week's hot list:
Hot List Leveraged ETFs
AGQ - Ultra Silver ProShares - Up 13% - This is a 2X daily leveraged ETF tracking the return of silver. This one's been a regular on the hot list several times recently, as silver is more volatile than gold, hence, the runups have been even more pronounced. You'll want to check out how silver and other precious metal ETFs are doing in comparison to gold - much better! It's primarily one of many weak
dollar ETF plays, but gold tends to get all the press. If you're only investing in the play, silver and other ETFs may actually do much better for you. AGQ is up 119% YTD.
BDD - PowerShares DB Base Metals Dble Long ETN - Up 8% - Aligned with the overall trend in metals strength last week this broader double long ETN for base metals turned in a strong week flat equities market. BDD is up 177% vs. a 21% return for the S&P500 YTD incidentally. As you can see, base metals have been outperforming precious metals.
UGL - Proshares Ultra Gold - Up 6% - Essentially the same play as AGQ, but it's a gold ETF. While the prospects of a 2x return sound appealing, make sure you're familiar with the ins and outs of
leveraged ETFs and the fact that over long periods of time, the shares of these ETFs tend to perform at less than 2x as value is eroded due to daily balancing in volatile markets. In the case of silver and gold ETFs, the leveraged type have been able to maintain their gains over time due to a steady upward trend which overcomes daily degradation in value. However, if the trend breaks or even just goes flat, you'll see the decay I cited over time.
Hot List - Sector ETFs (no leverage)
PGM - iPath DJ AIG Platinum TR Sub-Idx ETN - Up 8% -This Platinum ETN continues to run. For a non-leveraged play on precious metal strength/weak dollar trending, PGM is up 52% YTD vs.
