Friday ETF Roundup: GLD Surges On Bargain Buys, XLU Falls On Profit Taking

Includes: GLD, XLU
by: Jared Cummans

For a brief moment, it seemed like Friday was going to end the week on a positive note, but a sell-off midway through the day ensured that markets would finish relatively flat. All in all, the Dow finished out the day down 2 points and the S&P 500 gained just 0.3%. The euro was able to hold on to its $1.30 level against the greenback, though that comparison is likely to remain volatile over the coming days. Oil had a relatively volatile day, with its prices swinging back and forth between big gains and losses. Crude eventually finished the day up just 11 cents/barrel. Gold, which has been through a tough week, finally posted strong numbers with a jump of 1.5%.

Though many were looking to December to bring a “Santa rally," the month has been a disappointment for the most part. Keith Wirtz, chief investment officer of Fifth Third Asset Management, said that “75 to 80% of active managers have underperformed this year,” believing that many have simply thrown in the towel. Though no matter how the year turns out, active managers fail to beat their benchmarks more often than not, thus spawning the ETF industry to begin with. In an effort to keep investors up to date with today’s hectic markets, we outline two of the most notable ETF performances on the day.

One of the biggest ETF winners on the day came from the SPDR Gold Trust (NYSEARCA:GLD). This physically-backed gold product has had one tough week, with massive losses on Wednesday putting a damper on what were otherwise stellar returns for the year. After a rough couple of days, many people saw the price of this precious metal undervalued and decided to buy in while it was cheap. Because of this, GLD enjoyed a nice rally of 1.9% on the day. Despite its nasty string of trading days this week, GLD is still up 9.8% on the year, which is more than a number of assets can say.

One of the biggest ETF losers on the day came from yesterday’s big winner, the Utilities Select Sector SPDR (XLU). The fund sank by 1.4% on the day as investors participated in profit taking given the fund’s strong performance as of late. Though many funds have had problems gaining traction on the year, XLU has gained about 15.2% since 2011 began, giving it a nice appeal for investors. The fund is also paying out a current 30 Day SEC yield of 3.85%, giving it an added income stream for your portfolio. With not much news for markets to digest on the day, investors felt comfortable taking their winnings from XLU.

Disclosure: No positions at time of writing.

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