By Mark DeCambre
Happy holidays! It is the eve before Christmas Eve. It is an abbreviated week, with markets closed Friday in observance of the holiday. Next week’s also a holiday but Wall Street isn’t taking a break for accounting reasons.
We’ll take a quick look back at some calls and predictions from 2021 that were good or bad, hopefully gleaning some insights about what that means for 2022, as omicron fears fade but inflation and fiscal and monetary policy remain key concerns.
As per usual, send tips, or feedback, and find me on Twitter at @mdecambre or LinkedIn , to tell me what we need to cover, or share your 2022 outlooks for the industry. We’ll try to post a few of those as we get them.
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|Top 5 gainers of the past week||%Performance|
|ETFMG Prime Junior Silver Miners ETF /zigman2/quotes/207797470/composite SILJ||7.3|
|Global X Silver Miners ETF /zigman2/quotes/207060602/composite SIL||5.8|
|SPDR S&P Metals Mining ETF /zigman2/quotes/209640763/composite XME||5.0|
|U.S. Global Jets ETF JETS||4.2|
|ARK Genomic Revolution ETF ARKG||4.1|
|Source: FactSet, through Wednesday, Dec. 22, excluding ETNs and leveraged products . Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greate r|
…and the bad
|Top 5 decliners of the past week||%Performance|
|abrdn Bloomberg All Commodity Strategy K-1 Free ETF /zigman2/quotes/203920939/composite BCD||-16.0|
|Invesco Optimum Yield Diversified Commodity Strategy No. K-1 ETF /zigman2/quotes/207481984/composite PDBC||-10.5|
|VanEck Rare Earth/Strategic Metals ETF /zigman2/quotes/205602686/composite REMX||-8.5|
|Nuveen ESG Small-Cap ETF /zigman2/quotes/207218521/composite NUSC||-6.7|
|Vanguard International Dividend Appreciation ETF /zigman2/quotes/209056708/composite VIGI||-6.5|
ETF crystal balls?
Portfolio strategist Astoria Advisors made some 2021 predictions, as a part of its annual call for the coming year. We thought it would make sense to review some of those themes, while looking for potential insights into 2022.
We caught up briefly with John Davi, who heads up Astoria. He said that many of the themes from 2021 will resonate in 2022.
“We think these themes will hold up for one to two more quarters and don’t think omicron will derail the recovery,” he told ETF Wrap . We’ll aim to chat more with Davi next week when we discuss his 2022 picks in earnest.
A top area mentioned by Astoria was commodities, which had a terrible this week. The sector has been hit or miss on the year, depending on the fund. AA’s call of Global X Copper Miners ETF /zigman2/quotes/200953483/composite COPX +4.74% turned out to be solid, up 20.7% on the year, so far. Its run likely has been underpinned by the reopening of global economies, a fitful process with coronavirus variants sometimes wreaking havoc on sentiment.
However, it would seem logical to assume that 2022 also could be a strong one for select commodities, even as supply-chain bottlenecks that were very much a feature of 2021, loosen next year. Global X Copper carries an expense ratio of 0.65%, which translates to $6.50 of costs annually for every $1,000 invested. There are other copper funds, but COPX offers exposures to equity linked to the industrial metal, rather than futures for copper.
As an aside, rare-earth ETF, VanEck Rare Earth/Strategic Metals ETF has been volatile but a big performer for the year, up over 60% in the year to date, if investors are considering a fund that offers exposures to metals used in making tech components and powering electric vehicles. For that matter, Global X’s Lithium Battery Tech ETF /zigman2/quotes/208067690/composite LIT +5.54% also has been a solid gainer in 2021, up nearly 35%.
To be sure, past performance is no guarantee of future results and there is a sense that the transition from internal combustion engines to EVs could be a hitchy one.
What’s up, Doc?
So back to Astoria’s other 2021 picks, which included healthcare—a solid bet in the year considering the pandemic and the fervor around cures and vaccines. That said, Astoria’s call to gain exposure to that segment via ARK Genomic Revolution ETF /zigman2/quotes/206454610/composite ARKG +4.66% didn’t pan out, falling 32% on the year.
Cathie Wood is the CEO of ARK Invest, which operates the fund provider and focuses on a suite of “disruptive” innovation technology ETFs, including ARKG. Wood might say that investors need to maintain a much longer time horizon for her ETFs , which have all been underperforming compared with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.34% , the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.02% and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +2.76% .