ETFs With Stocks Near 52-Week Lows

In most cases, the price action in equity-based ETFs is driven by demand for, or selling pressure on, an ETF's underlying components. It was not surprising, for example, that the Consumer Staples Select SPDR (NYSE: XLP) has struggled since last week, as many of its holdings have since sold off.
 
Procter & Gamble (NYSE: PG) and Philip Morris (NYSE: PM), two stocks that combine for almost 23% of XLP's weight, have issued glum quarterly profit guidance. When the stocks that combine for nearly a quarter of an ETF's weight pare profit guidance, more often than not, the ETF will suffer.
 
XLP is just one example. There are plenty of equity-based ETFs on the market today that are being dragged lower by the slack performances being notched by some of the funds' most significant holdings. Investors use 52-week low data to their advantage to find ETFs that should be avoided or sold short.
 
For the purposes of this exercise, only equity-based funds were considered and the funds on this list all had to meet the following criteria: At least 25% of the ETF's weight has to be trading at or within no more than 10% of new 52-week lows. Here are some of the ETFs that popped up:
 
iShares MSCI Brazil Index Fund (NYSE: EWZ) As predicted things have gotten worse, not better, for EWZ below $50. The ETF has printed another new 52-week low today.
 
The decline in market value for Petrolbras (NYSE: PBR) has reduced the Brazilian oil giant's weight in EWZ to just over 14.5% (two Petrobras securities combine for that weight), but that is enough to be problematic as the stock has hit new lows almost everyday this week. Mining giant Vale (NYSE: VALE), 13.3% of EWZ's weight, is also flirting with a new 52-week low.
 
For bad measure, Itau Unibanco (NYSE: ITUB), 7.1% of EWZ's weight, also hit a new 52-week low today. Thus, three stocks combining for more than a third of EWZ's weight are at or near new lows.
 
Market Vectors Oil Services ETF (NYSE: OIH) Schlumberger (NYSE: SLB) and National Oilwell Varco (NYSE: NOV), two stocks that combine for nearly 30% of OIH's weight, are not in immediate danger of falling to new 52-week lows. That is a good thing because Halliburton (NYSE: HAL), Baker Hughes (NYSE: BHI), Weatherford (NYSE: CFT) and Cameron International (NYSE: CAM) are within 10% of their 52-week lows. Those stocks combine for about 24% of OIH's weight.
 
Transocean (NYSE: RIG), the world's largest provider of offshore drilling services, is just outside of 10% parameter. That stock accounts for 5.4% of OIH's weight.
 
Market Vectors Coal ETF (NYSE: KOL) Perhaps the least surprising member, traders just need to look at KOL's top holdings to get a sense for how badly battered this ETF is.
 
Peabody Energy (NYSE: BTU) and Joy Global (NYSE: JOY) are within 10% or less of new lows while Yanzhou Coal (NYSE: YZC) printed a new 52-week low today. Walter Energy (NYSE: WLT) is getting close to joining that dubious club as well. Those stocks combine for about 24% of KOL's weight, but the ETF offers small allocations to some other coal names that are near new lows as well. thus helping it exceed the 25% criteria.
 
China Guggenheim Technology ETF (NYSE: CQQQ) The China Guggenheim Technology ETF, which has not seen a single trade today, does not quite meet the criteria of 25% of the fund's weight being within 10% of new 52-week lows. However, Baidu (NASDAQ: BIDU) and Sina (NASDAQ: SINA) do, and those stocks combine for almost 16% of CQQQ's total weight.
 
A few more bad days for some of CQQQ's other U.S-listed names such as Giant Interactive (NYSE: GA) and Renren (NYSE: RENN) and this ETF could see its number of vulnerable constituents multiply.

BY The ETF Professor