Tanker-freight fund rose 32.7% in a week stocks barely moved
The tanker-freight fund BWET rose 32.7% in the week ended October 2, far more than oil, while the S&P 500 fund slipped 0.2% and cannabis funds fell after a DEA pause.
Key takeaways
The cost of shipping crude rose far more than the oil itself in the week ended Friday, October 2. BWET, the fund that holds futures on that cost, mostly the voyage from the Middle East to China in the largest tankers, rose 32.7%. BNO, the fund that holds Brent crude futures, rose 5.8%, and XLE, the fund that holds large US energy companies, rose 1.3%.
SPY, the fund that holds the S&P 500, slipped 0.2%. QQQ, the fund that holds the Nasdaq-100, rose 0.7%.
This ranking leaves out funds that multiply daily moves, funds built to rise when markets fall, and funds below the size cutoff. On the funds that remain, nothing else came close.
BWET returned 32.7%, more than twice the next fund shown
BWET does not own oil, and it does not own ships. It has $194 million in assets and charges 3.5% a year. It rose every session, including 11% on Monday and 5.7% on Friday.
On September 22, before this week began, it fell 18% in a single session. This week's run came after a drop of that size.
The contracts are on the voyage through the Strait of Hormuz, the narrow passage for Gulf oil. Four tankers were hit there on Monday and Tuesday. On Thursday, UK Maritime Trade Operations reported another tanker struck, and the ship caught fire.
Long rates kept climbing
Long-term rates were the other move that lasted all week. The 10-year yield touched 5.34% on Thursday, the highest since 2002.
PFIX, a fund that holds options built to rise when long-term interest rates rise, climbed 11.4% and rose every session. TLT, the fund that holds Treasurys due in more than 20 years, fell 1.9%.
An oil surge on Monday fueled bets on higher interest rates and pulled gold down. GLD, the fund that holds gold, fell 3.9% that day and finished the week down 3.4%.
The Bureau of Labor Statistics said employers added 29,000 jobs in September. Economists surveyed by Dow Jones had expected 84,000, and the unemployment rate was 4.2%. The 10-year yield fell after the report, then turned higher and finished Friday at 5.28%.
Optics moved on Thursday
Photonics means the lasers and optical parts that connect chips in data centers. FOTO, a fund aimed at those companies, was little changed through Wednesday and finished the week up 9.5%. LAZR, a second photonics fund, rose 7.6%.
Lumentum, the largest holding in LAZR, rose 15.3%. Coherent rose 13.9% for the week, and Ciena rose 9.6%.
Coherent rose 10.9% on Thursday. Bernstein started coverage of Coherent, Lumentum, Ciena and Arista that day at Outperform, a rating that means it expects the shares to beat the market. The same day highlighted PhotonLink, Coherent's platform packaging lasers, fibers and detectors for data centers.
"The next leap in AI requires more than faster chips: it requires a new way to connect them," Coherent chief executive Jim Anderson said.
Coherent rose another 5.6% on Friday.
EUV, a fund that mixes those optics names with the companies that make chip equipment, rose 7.9%.
PSI holds 30 US semiconductor stocks, chosen for momentum, earnings, quality and value. It rose 6.9%, and it rose on each of the last four sessions.
Intel, the largest holding in PSI, fell 3%. Wolfspeed rose 28% and added more to the fund's week than any other holding. Applied Materials and Lam Research rose 11.3% and 10.2%, against a 4% rise for SMH, the fund that holds the largest chip makers, and 3.9% for Nvidia.
The pause came before the drop
On Tuesday, September 29, Derek C. Julius, an administrative law judge at the Drug Enforcement Administration, paused the case on moving marijuana to Schedule III, a less restricted category. Parties opposed to the change had asked for the pause after a September 23 report from the Government Accountability Office, a US watchdog, flagged gaps in the agency's scheduling work. A move to Schedule III would ease a federal tax burden on cannabis operators.
The next day MSOS, the fund that holds US cannabis operators, fell 11.2%, and Thursday and Friday did not give that loss back. It finished the week down 13.4%. CNBS and MJ, two other cannabis funds, fell 11.5% and 9.2%.
MSOS does not own the shares of Trulieve, Curaleaf and Green Thumb. It holds swaps, contracts that move with those stocks, and those three swaps are 81% of the fund. The stocks fell 12.2%, 10.1% and 14.7%, and most of the fund's loss came from them.
The Drug Enforcement Administration has until October 13 to say whether it will reopen the record.
ETFs in this story
Frequently asked questions
Why did BWET rise so much more than oil?
BWET holds futures on what it costs to ship crude, mostly on the Middle East-to-China route through the Strait of Hormuz, and tankers were struck there during the week.
How did the broad stock market do that week?
SPY, the S&P 500 fund, slipped 0.2%, and QQQ, the Nasdaq-100 fund, rose 0.7%.
Why did MSOS fall 13.4%?
A DEA administrative law judge paused the case on moving marijuana to Schedule III, and the fund's swaps on Trulieve, Curaleaf and Green Thumb, 81% of the fund, fell with those stocks.
What happens next with the marijuana rescheduling case?
The Drug Enforcement Administration has until October 13 to say whether it will reopen the record.
