5 ETFs to Avoid in This Volatile Market

NASDAQ: TLT | iShares 20+ Year Treasury Bond ETF News, Ratings, and Charts

TLT – The Fed’s aggressive monetary policy stance is expected to keep the stock market under pressure in the upcoming months. Moreover, a potential recession could keep several assets under pressure. Therefore, we think it could be wise to avoid ETFs iShares 20+ Year Treasury Bond (TLT), VanEck Gold Miners (GDX), Ark Innovation (ARKK), Direxion Daily S&P Biotech Bull (LABU), and ProShares UltraShort Bloomberg Natural Gas (KOLD), which hold assets or financial instruments that might see a downtrend. Read on….

The Fed announced another 75-basis-point interest rate hike last week after August’s consumer price index (CPI) rose higher than expected. The latest interest rate hike marked the third consecutive three-quarters of a percentage point rise in a row.

Moreover, Fed officials expect the key rate to end 2022 between 4.25% to 4.5%, up from the previously expected 3% to 3.25%. This is expected to push the economy into a recession.

Looming recession fears have kept the market volatile, with the CBOE Volatility Index climbing more than 80% year-to-date. Economic uncertainties are expected to pressure stocks, some assets, and financial instruments.

Given this backdrop, it could be wise to avoid iShares 20+ Year Treasury Bond ETF (TLT), VanEck Gold Miners ETF (GDX), ARK Innovation ETF (ARKK), Direxion Daily S&P Biotech Bull 3X Shares (LABU), and ProShares UltraShort Bloomberg Natural Gas (KOLD) that might witness a downtrend.

iShares 20+ Year Treasury Bond ETF (TLT)

BlackRock Fund Advisors manage TLT. The fund invests in U.S. dollar-denominated fixed-rate U.S. Treasury securities with a remaining maturity of greater than or equal to twenty years. It seeks to track the performance of the ICE U.S. Treasury Bond ETF by using a representative sampling technique.

With $24.20 billion in assets under management (AUM), TLT’s top holding is United States Treasury Bond 1.875% 15-Feb-2051, which has a 12.50% weighting in the fund, followed by United States Treasury Bond 2.0% 15-Aug-2051 at 7.30%, and United States Treasury Bond 1.625% 15-Nov-2050 at 6.88%. It has a total of 35 holdings.

Its fund flows were negative $265.04 million over the past five days. Its NAV was $103.60 as of September 26, 2022. TLT has declined 30% year-to-date and 29.4% over the past year to close the last trading session at $103.68.

TLT’s POWR Ratings reflect its bleak prospects. It has an overall D rating, equating to a Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

TLT has an F grade for Trade and a D for Peer. It is ranked #24 out of 40 ETFs in the Government Bonds ETFs group. Click here to see TLT’s rating for Buy & Hold.

VanEck Gold Miners ETF (GDX)

Van Eck Associates Corporation manages GDX. The fund offers investors indirect exposure to precious metals by investing in stocks of companies operating across materials, metals, and mining, gold, and silver sectors around the world.

GDX seeks to track the performance of the NYSE Arca Gold Miners Index by using the full replication technique. With $9.31 billion in AUM, GDX’s top holding is Newmont Corporation (NEM), which has a 13.26% weighting in the fund, followed by Barrick Gold Corporation (GOLD) at 10.54%, and Franco-Nevada Corporation (FNV) at 8.90%. It has a total of 49 holdings.

The fund’s 0.51% expense ratio compares to the category average of 0.48%. Its fund flows were negative $814.40 million over the past year.

GDX has lost 31.7% year-to-date and 26.3% over the past year to close the last trading session at $21.86.

GDX’s overall POWR Rating of F, equating to a Strong Sell. The fund also has grades F for Trade and Buy & Hold and a D for Peer.

GDX is ranked #24 among 38 funds in the Precious Metals ETFs group. Click here to see all GDX’s ratings.

ARK Innovation ETF (ARKK)

ARKK is the flagship actively managed fund from ARK Invest, an advisory firm led by renowned investor Catherine Wood. The fund seeks to generate long-term capital appreciation by investing in businesses across the globe that seeks to benefit from disruptive innovation.

With $7.43 billion in AUM, ARKK’s top holding is Tesla Inc. (TSLA), which has a 10.55% weighting in the fund, followed by Zoom Video Communications, Inc. Class A (ZM) at 8.45%, and Roku Inc. Class A (ROKU) at 7.18%. It has a total of 36 holdings.

The fund’s expense ratio is 0.75%, compared to the category average of $0.50. The fund flows came in at a negative $486.94 million over the past three months. It has a beta of 1.61.

ARKK has declined 60.4% year-to-date and 68% over the past year to close the last trading session at $37.43. The fund’s NAV was $37.36 as of September 26, 2022.

ARKK’s POWR Ratings indicate its bleak prospects. The fund’s overall F rating translates to a Strong Sell in our proprietary rating system. It also has an F grade for Trade and Buy & Hold and a D for Peer.

It is ranked #63 among the 118 funds in the D-rated Technology Equities ETFs group. Click here to view all ratings of ARKK.

Direxion Daily S&P Biotech Bull 3X Shares (LABU)

LABU is managed by Rafferty Asset Management, LLC. It invests directly, through derivatives and other funds, in stocks of companies operating across health care, pharmaceuticals, biotechnology, and life sciences sectors. It seeks to track 3x the daily performance of the S&P Biotechnology Select Industry Index.

With $880.60 million in AUM, LABU’s top holding is Mutual Fund, which has a 14.59% weighting in the fund, followed by Goldman Sachs Trust Financial Square Treasury Instruments Fund Institutional (FTIXX) at 10.10%, and Dreyfus Government Cash Management Funds Institutional (DGCXX) at 5.62%. It has a total of 157 holdings.

Its fund flows came in at a negative $43.58 million over the past three months. The fund’s NAV was $5.99 as of September 26, 2022.

LABU has lost 83.2% year-to-date and 90.3% over the past year to close the last trading session at $6.03.

LABU’s overall POWR Rating of F equates to a Strong Sell. The fund also has grades F for Trade and Buy & Hold and a D grade for Peer.

LABU is ranked #38 among 101 funds in the F-rated Leveraged Equities ETFs group. Click here to see all LABU’s ratings.

ProShares UltraShort Bloomberg Natural Gas (KOLD)

KOLD is co-managed by ProFund Advisors LLC and ProShare Advisors LLC. The fund invests in the commodity markets. It takes short positions and uses derivatives such as futures contracts to invest in the natural gas sector. The fund seeks to track -2x the daily performance of the Bloomberg Natural Gas Subindex.

With $403.80 million in AUM, KOLD’s only holding is Natural Gas, which has a 100% weighting in the fund.

KOLD’s fund flows were negative $35.16 million over the past three months.

KOLD has lost 93.3% year-to-date and 91.4% over the past year to close the last trading session at $16.17. Its NAV was $16.28 as of September 26, 2022.

KOLD’s POWR Ratings indicate its bleak prospects. The fund’s overall D rating translates to a Sell in our proprietary rating system.

It also has an F grade for Buy & Hold and a D for Trade and Peer. It is ranked #9 among the 23 funds in the Inverse Commodities ETFs group. Click here to view all ratings of KOLD.


TLT shares fell $0.49 (-0.47%) in premarket trading Tuesday. Year-to-date, TLT has declined -29.10%, versus a -21.29% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
TLTGet RatingGet RatingGet Rating
GDXGet RatingGet RatingGet Rating
ARKKGet RatingGet RatingGet Rating
LABUGet RatingGet RatingGet Rating
KOLDGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

6 Reasons to Become Bullish Now

40 year investment veteran Steve Reitmeister has been beating the bearish drums since May 2022. However, he is seeing more and more reasons to consider that it might be time to get bullish on stocks (SPY). All 6 of those bullish reasons are shared in the new commentary below including top picks to consider now.

:  |  News, Ratings, and Charts

3 Upgraded Stocks to Put on Your Radar This Week

With the expected continuation of monetary policy tightening, the economy is anticipated to witness a slowdown this year. Amid an uncertain economic backdrop, it could be wise to add fundamentally sound stocks HCA Healthcare (HCA), Yum! Brands (YUM) and DocuSign (DOCU) to your watchlist this week. These stocks have been recently upgraded in our proprietary rating system. Keep reading…

:  |  News, Ratings, and Charts

4 Best Software Stocks That Money Can Buy

The software industry has faced several macroeconomic headwinds since last year. However, the industry’s prospects remain strong, driven by rapid digitalization and heightened spending. Therefore, it could be wise for investors to buy fundamentally strong software stocks Salesforce (CRM), Synopsys (SNPS), Autodesk (ADSK), and Progress Software (PRGS). Read more…

:  |  News, Ratings, and Charts

2 Large-Cap Stocks to Buy Before the End of January

Growing concerns over the economy’s uncertainties and yet-to-be-tamed inflation have led to widespread worries about an economic slowdown. Therefore, fundamentally strong large-cap stocks Walmart UnitedHealth Group (UNH) and VMware (VMW) could help stabilize your portfolios amid the volatile economic backdrop. Read more…

:  |  News, Ratings, and Charts

4 Best Software Stocks That Money Can Buy

The software industry has faced several macroeconomic headwinds since last year. However, the industry’s prospects remain strong, driven by rapid digitalization and heightened spending. Therefore, it could be wise for investors to buy fundamentally strong software stocks Salesforce (CRM), Synopsys (SNPS), Autodesk (ADSK), and Progress Software (PRGS). Read more…

Read More Stories

More iShares 20+ Year Treasury Bond ETF (TLT) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All TLT News