Year-End 'Window Dressing' Props Up Mining and Oil Exploration ETFs

by: Gary Gordon

Window dressing money managers often go shopping before Christmas time. Specifically, advisers have a limited number of trading days left to acquire investment positions that will look good on quarterly and/or annual portfolio summaries.

Individual superstar companies whose share prices rocketed earlier in the year experience the most attention. For instance, is anyone surprised to see Apple (NASDAQ:AAPL) hitting record after mind-boggling record?

Exchange-traded funds with the highest relative strength percentile rankings gained the most ground in the trade-shortened week. They significantly outperformed the competition over the last 5 trading days. Even more noteworthy, with most stock ETFs taking a breather on Thursday, these favorites kept right on winning.

Which ETFs currently possess magnificent momentum? The answer in short: Mining ETFs and Oil Exploration ETFs.

Window Dressing ETFs

Approx 1-Day

Approx 5-Day

PowerShares Small Cap Energy (XLES) 0.54% 4.44%
SPDR Metals and Mining (NYSEARCA:XME) 0.09% 3.21%
SPDR Oil Gas Exploration (NYSEARCA:XOP) 0.04% 3.19%
iShares Oil & Gas Exploration (NYSEARCA:IEO) 0.14% 3.08%
iShares DJ Materials (NYSEARCA:IYM) 0.42% 2.85%
First Trust Global Copper (NASDAQ:CU) 0.43% 2.71%
Global X Silver Miners (NYSEARCA:SIL) 0.39% 1.10%
S&P 500 SPDR Trust (NYSEARCA:SPY) -0.14% 1.15%
Powershares Nasdaq 100 (QQQQ) -0.26% 0.49%

Granted, as long as the Fed and other central banks are “reflating” through loose monetary policy, materials ETFs like Market Vectors Coal (NYSEARCA:KOL) and energy ETFs like SPDR Oil & Gas Equipment Services (NYSEARCA:XES) will thrive.

By the same token, it is China that determines just how high the reflation trade ETFs can climb; that is, if China decides it needs to tighten its monetary and fiscal screws to prevent an inflationary bubble, the reflation trade ETFs could see significant price depreciation.

For the time being, though, investors can enjoy the holiday cheer. There’s nothing wrong with a little game of dress-up, is there?

Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.