Top 11 ETFs of first quarter 2011

The first quarter has come to a close and what a quarter it has been! With the Fed continuing QE2, MENA turmoil, a Japan earthquake/tsunami/nuclear crisis and European debt issues (right on cue), the first quarter of 2011 has been one of the more eventful Q1’s in recent memory. Investors in the right areas of the market were handsomely rewarded with double digit gains during the roller coaster start of 2011. Let’s examine the top 11 best performing non leveraged equity ETFs/ETNs in Q1 to determine several winning trends. Source: indexuniverse.com data tool, link provided in bottom paragraph

The top 11 performers reveal two themes that worked in Q1. First energy was the place to be in Q1 given MENA turmoil and the continuing global economic recovery. Seven of the top 11 performers were related to energy with four of those products providing exposure to fossil fuel focused firms, one owning oil futures and another focusing on solar energy companies. It is interesting to see the continued dominance of equity focused fossil fuel products versus futures based. It’s  also hard to deny that equity based products have delivered the performance investors expect when it comes to fossil fuels. (escaping contango is a big advantage)

The second theme was the continued run in commodities albeit with some new commodities showing up. (Gold and Silver where art thou?) Three of the top 11 performers were Cotton, Tin and Cocoa which benefitted from supply and demand imbalances primarily due to weather related issues. It’s interesting to note that all three of these products are ETNs and offered by iPath. (a quick look at shows these products contain a bit less than $500 million in assets total — room for growth) And in case you’re keeping track, the final top performer in the group of 11 was the B2B Internet HOLDR. This ETF — although I use that term loosely as HOLDRs are a dying legacy product line and structure  - has close to 90% of its assets invested in the software and internet service company Ariba which had a strong Q1.

So Q1 2011 goes down as an eventful quarter which was especially beneficial to those with energy (7 0f the top 11) and certain individual commodity positions (3 of the top 11). For a look at a wider sampling of top performers, (a quick review of the top 50 shows materially similar themes) here’s the link to the full data sort I performed on indexuniverse.com. Enjoy and here’s to a stellar Q2!