Travel ETFs Broke out of the Eggshell this Week
The top-performing ETFs included travel and natural gas ETFs for the week preceding Easter while cryptocurrency dominated the bottom performing ETFs.
Last week’s top-performing ETFs included travel ETFs, driven by hot summer bookings expectations, and natural gas ETFs, boosted by prices pressing higher due to tight supplies. On the other side of the spectrum, cryptocurrency ETFs performed poorly following a selloff in cryptocurrency prices.
Travel and Leisure ETFs Break out of the Eggshell
The travel industry faced high rebound expectations entering 2022 which were toned down by the Russian invasion of Ukraine. The war in Eastern Europe sent energy and fuel prices skyrocketing consequently increasing the industry cost levels. Delta Airlines reported a net loss of USD$940 million for the first quarter. Despite the loss, it spurred a rally among travel and leisure stocks as it anticipated summer bookings to increase after Easter. Robust reservations and increasing fares will help cushion the blow of ever-increasing fuel prices in the industry. The news from Delta also shifted sentiment for fellow airlines, American Airlines, and cruise operator Carnival. The two versions of Harvest Travel & Leisure Index ETF, CAD (TRVL), and USD (TRVL.U) booked top positions on the best performing ETFs’ list in Canada last week. TRVL came in second with 5.77% while TRVL.U placed third generating 5.67%.
ETFs in play:
Natural Gas ETFs Remain Persistent
Natural gas prices, in theory, should be heading south during this time of the year with the weather transitioning to warmer conditions. Instead, they have swelled driven by geopolitical tensions threatening global supply chains. The US Natural Gas futures broke above the USD$7.3/MMBtu while natural gas stockpiles remained around 25% below last year’s levels. This comes after moderately rising during the previous week. The Horizons NYMEX Natural Gas ETF (HUN) came in as the top-performing ETF in Canada last week, having risen 11.31% while gaining 83.09% since the beginning of the year.
ETFs in play:
Cryptocurrencies Are Struggling
Bitcoin, Ethereum, and other dominant cryptocurrencies have fallen sharply, tumbling Bitcoin and Ethereum’s prices back under the USD$40,000 and USD$3,000 levels respectively. The aggregate crypto market managed to lose almost USD$400 billion in market capitalization since early April. Crypto pundits believe that escalating geopolitical worries are influencing the performance of this volatile asset class. Others attribute the intense selloff to global tax obligations in countries like the United States, Canada, and the United Kingdom since people may sell some of their holdings as they need to pay the income taxes for the fiscal year 2021. The decrease in cryptocurrencies’ prices negatively affected cryptocurrencies ETFs. In fact, all the 20 least performing ETFs in Canada last week were funds in the cryptocurrencies space. The Bitcoin ETF in its CAD (EBIT) and USD (EBIT.U) were down 6.46% and 6.09% last week respectively. The 3iQ CoinShares Bitcoin ETF (BTCQ.U) managed to lose the least but bled the most assets among its peers. The fund was down 4.06% with outflows of CAD$25 million.
ETFs in play:
Data for this article is as of April 13th, 2022.
