Worst ETFs of the Week: China and Commodity ETFs

Global food commodity prices fall, China punches their own tech sector

After a long period of good performance, commodities, and more specifically food commodities have experienced a week of correction. Indeed, the FAO Food Price Index that tracks the prices of the most globally traded food commodities, is down by -2.5% from May. The decline marks the first drop in the Index following twelve consecutive monthly increases. There are three ETFs in the bottom 10 that track a physical commodity, including the WisdomTree Corn ETF which experienced the largest decrease (-10.59%).

The decline in Commodity ETFs is mainly due to an increase in inventory followed by a globally slowing demand. Many harvests around the world were more generous than expected, thus increasing inventory. In addition, there has also been an overall decrease in global imports which leads to a slowdown in demand. An increase in inventory coupled with a decrease in demand initiates a mechanical reaction of lowering prices.

ETFs tracking Chinese Markets are also among the Bottom 10 ETFs. The Chinese tech sector suffered the most last week in terms of performance. This sector has been under attack by the control freak Chinese Communist Party who want more dominance over tech companies and their data. Giants such as Alibaba or more recently Didi Chuxing, a ride-hailing application in China similar to Uber have been recent victims of the clampdown.  

After years of tolerant legislation that allowed tech companies to grow massively, China has embarked on a vast campaign to regulate the sector. Fears of tightening regulations on Chinese tech companies has caused the markets react negatively. The global tech sector also went into the red last week, adding more pressure to the sector.

Bottom 10 ETFs of the Week: China ETFs and Commodity ETFs

Europe:

• WisdomTree Corn: -10.59%
• KraneShares CSI China Internet UCITS ETF: -7.52%
• Xtrackers Physical Rhodium ETC: -7.38%
• WisdomTree Grains: -7.33%
• Xtrackers FTSE Vietnam Swap UCITS ETF: -6.65%
• UBS ETF Solactive China Technology UCITS ETF: -6.45%
• HSBC Hang Seng TECH UCITS ETF: -5.85%
• WisdomTree Wheat: -5.81%
• iShares MSCI Brazil UCITS ETF: -5.77%
• VanEck Vectors Hydrogen Economy UCITS ETF: -5.45%

Which ETFs performed the best this week? Read the list of Best ETFs of the Week.

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