5 ETFs That Gained Double Digits in Q2

Wall Street wrapped up the worst quarter with the major indices logging sharp declines. The Dow Jones and the S&P 500 Index posted their worst quarter since the first quarter of 2020, while the tech-heavy Nasdaq Composite tumbled 22.4% for the second quarter, marking its worst quarterly performance since 2008.

While most corners of the market were in deep red, a few have performed well. AdvisorShares Ranger Equity Bear ETF HDGE, AdvisorShares Dorsey Wright Short ETF DWSH, Advocate Rising Rate Hedge ETF RRH, AGFiQ US Market Neutral Anti-Beta Fund BTAL, and Simplify Interest Rate Hedge ETF PFIX have gained in double digits.

These funds have been the quarter’s star performers and could also be winners next quarter if the current trends continue.

Second-Quarter Market Trend

Persistently rising inflation and tightening monetary policies have raised concerns over recession fears. Additionally, Russia’s invasion of Ukraine and its impact on the global economy has been weighing on investor sentiment. This has led to risk-off trade.

Last month, the Fed announced the biggest rate rise in nearly 30 years as it ramped up its fight to rein in soaring consumer prices. The central bank lift off interest rates by 75 bps and signaled continued tightening ahead, which could further weigh on stocks. Fed Chair Jerome Powell said that another hike of 50 or 75 bps at the next meeting is likely in July (read: 4 Sector ETFs That Survived Market Turmoil in June).

With skyrocketing inflation and a weak macroeconomic backdrop, the World Bank recently warned of a recession and slashed its global growth forecast. It now expects the global economy to expand 2.9% this year, down from 5.7% growth in 2021 and lower than the 4.1% expectation projected in January. The World Bank cautioned that many countries could fall into recession as the economy slips into a period of stagflation reminiscent of the 1970s. Goldman Sachs forecast a 30% chance of the U.S. economy tipping into recession over the next year, while economists at Morgan Stanley placed the odds of a U.S. recession for the next 12 months at around 35%.

AdvisorShares Ranger Equity Bear ETF (HDGE) – Up 29.3%

AdvisorShares Ranger Equity Bear ETF is actively managed and seeks capital appreciation by taking short positions in a number of U.S.-listed companies with low earnings quality or aggressive accounting practices. The managers will look to identify earnings-driven events that could lead to price declines such as downward earnings revisions or reduced forward guidance — the two factors that can spell trouble for a company. These securities with potentially weak fundamentals will underperform in a crumbling market, thereby resulting in strong profits for the fund.

AdvisorShares Ranger Equity Bear ETF has amassed $156.2 million in its asset base and is a bit pricey, charging 5.20% in annual fees. It trades in a volume of 214,000 shares a day, on average.

AdvisorShares Dorsey Wright Short ETF (DWSH) – Up 26.1%

AdvisorShares Dorsey Wright Short ETF is an actively managed that short sells U.S. large-cap securities with the highest relative weakness within an investment universe primarily, comprising large-capitalization U.S.-traded equities. It holds 104 stocks in its basket, with consumer discretionary taking the largest share at 22.8%, while energy and healthcare round off the next two spots (read: Forget Recession Fears With These ETFs).

AdvisorShares Dorsey Wright Short ETF trades in a lower average daily volume of 117,000 shares and has accumulated $44.9 million in its asset base. It charges a higher annual fee of 3.68%.

Advocate Rising Rate Hedge ETF (RRH) – Up 18.3%

Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long-term interest rates, specifically interest rates with maturities of five years or longer. It is an actively managed fund and seeks to achieve its investment objective primarily by investing in a combination of U.S. Treasury securities; forwards, futures or options on various currencies; long and short positions on the short and long-end of the Treasury or swap yield curve via futures, swaps, forwards and other over-the-counter derivatives; long and short positions on equity indexes and investment companies, including ETFs; and commodity futures and options.

Advocate Rising Rate Hedge ETF has accumulated $36.4 million in its asset base and charges 85 bps in annual fees. It trades in an average daily volume of 12,000 shares.

AGFiQ US Market Neutral Anti-Beta Fund (BTAL) – Up 18.3%

AGFiQ US Market Neutral Anti-Beta Fund has the potential to generate positive returns regardless of the direction of the stock market as long as low-beta stocks outperform high-beta stocks. It invests primarily in long positions in low-beta U.S. equities and short positions in high-beta U.S. equities on a dollar-neutral basis, within sectors.

AGFiQ US Market Neutral Anti-Beta Fund has AUM of $163.3 million and an expense ratio of 2.53%. It trades in an average daily volume of 238,000 shares.

Simplify Interest Rate Hedge ETF (PFIX) – Up 15.8%

Simplify Interest Rate Hedge ETF seeks to provide a hedge against a sharp increase in long-term interest rates and benefit from market stress when fixed-income volatility increases, while providing the potential for income. It buys put options on longer-term Treasury bonds to offer “the most liquid and the most cost-efficient way of getting interest rate protection.” Simplify Interest Rate Hedge ETF is the first ETF providing a simple, direct and transparent interest rate hedge (read: Top & Flop Zones of First Half 2022 and Their ETF).

PFIX has accumulated $322.5 million in its asset base since its debut a year ago and trades in an average daily volume of 217,000 shares. It charges 50 bps in annual fees.

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AdvisorShares Ranger Equity Bear ETF (HDGE): ETF Research Reports
 
AGFiQ US Market Neutral AntiBeta ETF (BTAL): ETF Research Reports
 
AdvisorShares Dorsey Wright Short ETF (DWSH): ETF Research Reports
 
Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports
 
Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports
 
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