Best And Worst ETFs Of The Week Amid Consumer Discretionary Strength

After briefly touching a new intra-day high this week, the SPDR S&P 500 ETF (SPY) fell back below its 50-day moving average and has once again inserted itself into a broad trading range.  Investors are likely feeling frustrated this year with the bifurcated nature of the markets that has seen growth sectors soar, while value names collapse. 

Perhaps the strongest sector this week was the Consumer Discretionary Select Sector SPDR (XLY), which added to gains on the back of strong quarterly results from Amazon Inc (AMZN) and Starbucks Inc (SBUX).  This all-important gauge of consumer activity is showing no signs of slowing down this year after hitting new highs. 

The following ETFs represent a sample of the best- and worst-performing funds over the last five trading sessions.

BEST: Long Duration Treasury Bonds

One of the best performing asset classes this week was long-duration Treasury bonds as a flight to quality sent interest rates markedly lower.  The PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ) gained nearly 4 percent since last Friday’s close.

This exchange-traded fund tracks a basket of 20 zero coupon Treasury bonds with an effective duration of 37.26 years.  ZROZ has one of the highest sensitivities to long-term interest rates of any fixed-income ETF, which makes it a preferred method of betting against Treasury yields. 

This fund currently has $107 million in total assets and charges an expense ratio of 0.15 percent. 

WORST: Junior Gold Miners

The rout in gold prices took its toll on smaller mining companies this week.  The SPDR Gold Trust (GLD) fell over 4 percent, which translated to a 14 percent drop in the Market Vectors Junior Gold Miners ETF (GDXJ). 

GDXJ tracks 62 small and mid-cap gold and silver mining companies.  This fund has $1.1 billion in total assets and charges an expense ratio of 0.55 percent. 

Since the start of the year, GDXJ has dropped over 24 percent to hit new multi-year lows and has yet to show any convincing signs of a bottom in place.  Most investors won’t be shocked by the extension of this long-term downtrend and sentiment appears to be firmly seated in the bear camp for the time being.