A Year Later: 8 Top ETFs Since the Market's Low

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 |  Includes: IDX, KBE, KIE, KOL, RSX, SLX, TUR, XME
by: Tom Lydon

ETF march lowWhat a difference a year makes. At this time in 2009, it seemed that the markets and exchange traded funds couldn’t sink much further. Little did we know, a reprieve was to come. Here are eight of the strongest ETFs since that day.

Market Vectors Coal ETF (NYSEArca: KOL) is up 224.9% off the low. Oil prices topping off in the low $80 range helped boost coal plays since March 9. Coal prices had an assist in recent months as those in the colder climes crank up the heat and push demand higher, eating into what had been a surplus. And last year, China shifted from being a coal exporter to an importer, shifting the dynamics of pricing.

Market Vectors Indonesia ETF (NYSEArca: IDX) is up 203% off the low. Indonesia has been one of the powerhouses of the recovery. Influential global asset manager Templeton Asset Management said that Indonesia could be ready to become a member of the BRIC. President Susilo Bambang Yudhoyono expects the country’s growth to average 6.6% over the next five years. Indonesia recently had its sovereign debt upgraded to one level below investment grade by Fitch Ratings firm.

Market Vectors Steel (NYSEArca: SLX) is up 180% off the low. A global recovery led by emerging markets, a pickup in global auto demand, tight mine supply growth and more demand for investment are seen as being the primary drivers of any gains in metals this year. Steel is a key component in all kinds of infrastructure and building projects, putting it in prime position to benefit in recoveries.

iShares MSCI Turkey Index (NYSEArca: TUR) is up 178% off the low. Turkey has seen a shift in the last year: its government bond rating was raised by Moody’s, Fitch and S&P. Turkish banks also managed to get through the crisis without seeking aid from the government. But trouble lurks: A coup in the country threatens to undo its hard-won growth.

Market Vectors Russia (NYSEArca: RSX) is up 176% off the low. While Russia is no less secretive than it was before the crisis, the economy has at least delivered the goods so far. It’s estimated to grow around 3.5% this year. In January, industrial output in Russia jumped 7.9% year-over-year. The Federal Statistics Service reported that industrial output dropped by 10.8% last year. Car and locomotive manufacturing increased by three-fold year-over-year. But will Russia diversify far beyond oil and gas? Whether it does could determine its long-term prospects for health.

SPDR S&P Metals & Mining (NYSEArca: XME) is up 160% since the low. XME is another ETF in a prime position to trend up as the economic recovery continues. Add in an increasing federal deficit coupled with a large decline in the U.S. dollar, and it may eventually translate into rapid inflation and higher metal prices. As an equities-based ETF, it tends to have less volatility than ETFs backed by physical metals or futures contracts. Added bonus: Mining companies can continue to do well if a commodity’s price falls back, but remains far above the cost of production.

SPDR KBW Insurance (NYSEArca: KIE) is up 164% off the low. Insurers were one of the most embattled sectors a year ago. The industry’s leader, AIG, is still finding ways to pay back a massive bailout by selling off certain units. A British company has signed on to buy AIG’s Asia life insurance business for $35.5 billion. The deal would mean the largest repayment yet of the whopping $180 billion the government fronted AIG. The Federal Reserve of New York would grab the first $16 billion from the sale. This week, AIG sold its foreign life insurance business to MetLife for $15.5 billion.

SPDR KBW Bank (NYSEArca: KBE) is up 152% off the low. This one is proof that the most beaten-down sectors in a crisis tend to perform among the best in recoveries. The most recent dip in major bank stocks came after President Barack Obama announced increased bank regulations. Critics see this as an attack on the fundamental business model and Congressmen are in no real rush to push the changes. The most prominent bullish argument for banks is the yield curve slope, which allows banks to make profits on the widening rate spread.

For full disclosure, Tom Lydon’s clients own shares of XME.

Max Chen contributed to this article.