Best-Performing ETF Areas of March

March 2026 can easily be credited to the Iran war and a severe oil market crisis. Due to the war in the Middle East, oil prices shot up, and the global market tumbled. Even the safe-haven asset gold failed this time around.

Brent crude oil prices hit their highest level since June 2022 in March 2026, reaching about $120 per barrel on March 9. WTI crude, too, surpassed the $100-level in March. State Street SPDR S&P 500 ETF Trust SPY lost about $7.9% over the past month (as of March 30, 2026), Invesco QQQ Trust, Series 1 QQQ retreated 8.2%, and State Street SPDR Dow Jones Indust Avg ETF Trust DIA dropped 7.6%.

Small-cap ETF iShares Russell 2000 ETF IWM slumped 9.2% while SPDR Gold Trust GLD shed 15.4% as the greenback gained. Invesco DB US Dollar Index Bullish Fund UUP rose 2.4% over the past month (as of March 30, 2026). All-world ex U.S. fund iShares MSCI ACWI ex US ETF ACWX also plunged 9.4%.

Iran War Update

The United States and Israel launched coordinated strikes on Iran on Feb. 28, 2026, with President Donald Trump stating that the operation aimed to destroy Iran’s nuclear program and weaken the current regime.

The attacks prompted immediate retaliation from Iran, which included launching missiles toward U.S. military assets and infrastructure across the Gulf region, including locations in Bahrain, the United Arab Emirates and Qatar. 

Crisis in the Strait of Hormuz

The main crisis emerged from the Strait of Hormuz, a vital chokepoint through which roughly one-fifth of global oil and liquefied natural gas supplies pass daily. By the end of the month, the Strait remained closed as Iranian forces reportedly warned vessels against transiting the waterway.

The data provided by shipping analysts Kpler shows 99 vessels passing the narrow strait so far this month, an average of just 5-6 vessels a day (as quoted on BBC), despite periodic attacks on shipping in the area by Iranian forces.

While some energy and daily goods are still moving through one of the world's busiest shipping lanes, daily traffic is down about 95% since the start of the war. Before the war, about 138 ships used to pass through the strait each day, according to the Joint Maritime Information Center, as quoted on the BBC.

Diplomacy on the Way?

Late-month signals suggested that Trump may end the Iran conflict even if the Strait of Hormuz stays largely closed, The Wall Street Journal reported, per Reuters, as quoted on Yahoo Finance. 

As per the latest update, Trump said on April 7, 2026, that he agreed to a two-week “double-sided ceasefire” with Iran just hours before his deadline for a deal or major strikes.

Oil Market in Backwardation: Is Energy Market Complacent?

Despite the volatility, the oil market entered backwardation last month, where near-term prices were higher than those for future delivery, as quoted on CNBC. Despite expectations of a resolution, risks remain significant. Damage to energy infrastructure could take years to repair. Hence, we do not expect the oil to return to the pre-war levels soon (read: Oil Could Surge to $200 if Conflict Continues: Energy ETFs in Focus).

No Near-Term Inflation Threat

On the monetary policy front, Federal Reserve Chair Jerome Powell reassured markets that risks of contagion in the private credit market remain low. He also indicated that inflation pressures appear contained for now.

Winning ETF Areas of March

Shipping – Breakwave Tanker Shipping ETF BWET – Up 96.8% in the past month (as of Apr. 3, 2026)

Disruptions in various shipping routes have boosted shipping stocks this year. About 90% of the world’s goods are transported by sea, according to the FT. Due to all the disruptions, shipping rates have surged in recent months.

Energy – United States Oil Fund LP USO – Up 50.6% in the past month

Energy markets surged amid supply disruptions. Oil prices jumped by roughly 77% from $57 per barrel. BNO ETF skyrocketed by about 84% in Q1 (read: Oil Could Surge to $200 if Conflict Continues: Energy ETFs in Focus).

Commodity – iShares S&P GSCI Commodity-Indexed Trust GSG – Up 20.8% in the past month

Commodity ETFs often tend to have lower correlation to stocks and bonds. This makes them a good buy amid market volatility. During geopolitical crises, investors often move away from risky assets (stocks) and into safe-haven commodities. Moreover, war is likely to disrupt shipping, production, or exports of commodities, which normally leads to a rally in commodity prices (read: 5 Low-Beta Commodity ETFs to Scoop Up Amid Market Volatility).

Volatility – ProShares VIX Short-Term Futures ETF VIXY – Up 17.5% in the past month

Middle East tensions drove sharp swings, keeping markets volatile. Markets are unlikely to see immediate relief as oil prices are expected to remain elevated even after the Middle East conflict eases, since damage to key energy infrastructure across the region may take time to repair. The month was all about war and hopes of a ceasefire. So, no wonder, volatility in the equity market was prevalent.

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This article originally published on Zacks Investment Research (zacks.com).

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Source Zacks-com