iPath S&P 500 VIX Short-Term Futures ETN (VXX) +48.5%Fear was in favor during the second quarter as investors fled the market. The resounding anxiety stemming from Europe's debt crisis, China's overheating real estate market and doubts about the strength of the broad global economic recovery provided the push necessary to power the VIX, and the exchange-traded notes related to the fear-based index, higher. The iPath S&P 500 VIX Mid Term Futures ETN ( VXZ), while less popular than the short-term futures based VXX, boasted a strong quarter as well.
Market Vectors Gold Miners ETF (GDX) +17.0%With fear in favor, investors poured out of equities in droves. One sector of the market that managed to score gains over the most recent three-month period, however, was gold miners. GDX, which boasts heavy exposure to top gold producers such as Goldcorp ( GG), Barrick Gold ( ABX) and Newmont Gold ( NEM), soared in the second quarter as investors sought the protective nature of the yellow metal. GDX's small-cap cousin, Market Vectors Junior Gold Miners ( GDXJ), was another big winner during this period.
iShares Barclays 20+ Year Treasury Bond Fund (TLT) +14.9%Investors fearing the market storm piled into long-term treasuries as well, pushing TLT to a top spot. During this three-month period, the fund's ascension has been impressive, breaking through previous 2010 highs and currently testing levels last seen during the opening months of 2009. On the other side of the coin, UltraShort 20+ Year Treasury ProShares ( TBT) turned in one of the worst performances within the ETF industry during this period, dropping 27.1%. If the headwinds that tested the markets in the second quarter continue into the third, TLT will likely remain an attractive fund for investors seeking a safe haven.
United States Natural Gas Fund (UNG) +12.1%Although UNG has suffered through a fast and steady downturn since the start of the second half of 2008, in 2010, the fund has shown signs that it may, at last, be stabilizing. Looking towards the third quarter of 2010, I feel that the natural gas industry will present an attractive investment opportunity. However, playing the fuel directly will be a difficult task. Weather and contango issues from previous years risk pressuring prices once again. Instead, investors should look to equity based-products that will benefit from growing favor towards natural gas. First Trust ISE-Revere Natural Gas Index ETF ( FCG) and JPMorgan Alerian MLP Index ETN ( AMJ) are my two favorite options for natural gas bulls looking toward the rest of the year.