We did a quick update of the top ETF’s in May last night after seeing markets rise big time following the European rescue plan worth close to 1000 billions. The US markets were up over 4% after a painful time. We had written about possible ways to play the Greece crisis and were wondering if only short ETF’s had done well so far this month… We would expect quite a few short ETF’s to be among the top since the S&P500 is down over 6% so far this month! So yes, looking at your statements on Mint or elsewhere might be a bit more painful!

So is it unanimous?

Not exactly! Although about 90 of the top 100 ETF’s this month were either short or leveraged short ETF’s, there were a few long ETF’s that made the list which might give some hope to the few bulls left alive after this bloody month. Right? Not quite in fact…

Which long ETF’s made the list?

At the very top is VXX, an ETF linked to  volatility in the S&P500. It might be long but as you might know, volatility increases when markets crash and decreases when markets rise. It is certainly not an encouraging sign to see VXX at the top of our list for the month.  What else made the list? There was a mid term volatility ETF and some treasury ETF’s which also tend to do well in times of crisis. So say what you want, yesterday’s huge returns are not a sign that all is good, in fact none of the top 100 ETF’s are really encouraging signs for the US market! So yes it was unanimous, the only way to do well this month was betting on a market decline.

Time to bet on a rebound?

With all these terrible things happening in the markets, you might think it’s now bound to rebound? It might happen but I’d say it’s far from a sure thing as it remains dependent on investors faith in the European governments and their ability to turn things around. So yes it might be time to return but maybe not all in just yet. Thinking about placing a few dollars on the recovery? Then look for the inverse of those that topped this list. They don’t exist to my knowledge for volatility but you can certainly go long emerging markets, latin America and other more fragile regions!