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The Q2 reporting cycle has effectively come to an end, with earnings of 98.7% of the S&P 500 market capitalization that has reported so far is down 32.3% on 9.5% lower revenues, with 80.4% beating EPS estimates and 64.0% beating revenue estimates. This is the lowest earnings growth pace since the last earnings downturn following the 2008 recession. However, the proportion of these companies beating consensus estimates, particularly EPS estimates, is tracking above historical trends.
Given this, several equity ETFs have impressed with their performances and generated handsome returns over the trailing one-month period. While there are winners in many corners of the space, below are five ETFs that buoyed up on strong earnings results. In addition, we have given a chart for their one-month performance and compared them with the broad market fund (SPY - Free Report) and the broad sector.
This ETF offers companies in the solar energy industry. It has gained 22.3% in a month on strong Q2 earnings. In particular, upbeat earnings from First Solar (FSLR - Free Report) , SolarEdge Technologies SEDG, Enphase Energy (ENPH - Free Report) , SunPower Corp. (SPWR - Free Report) and Canadian Solar (CSIQ - Free Report) led to a strong rally in the ETF. TAN has a Zacks ETF Rank #2 (Buy) with a High risk outlook. Overall, the solar industry came up with a 45% earnings beat in Q2 (read: 5 Sector ETFs Soaring Halfway Through Q3).
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in equal weights of 10% each in its basket. A slew of strong earnings results from the five tech giants in the index such as Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Alphabet GOOGL, Microsoft (MSFT - Free Report) and Facebook has strongly contributed to overall technology earnings. Other stocks in the index such as Tesla (TSLA - Free Report) , and Nvidia (NVDA - Free Report) also came up with solid results. All these led to strong trading in the ETF, which is up 18.1% in a month (read: 5 Tech ETFs at the Forefront of the Latest Sector Rally).
The digital shift has led to the rapid adoption of esports and increased video game usage, pushing revenues and profits higher. This ETF is designed to offer retail and institutional investors exposure to sports betting and iGaming industries. It has surged 21.3% in a month on strong Q2 earnings (read: Time to Gamble on Sports Betting Stocks & ETF?).
This fund provides exposure to the 31 most-liquid U.S. transportation securities based on volatility, value and growth. It has gained 16.1% in the past month on strong Q2 earnings. Total earnings for 100% of the sector’s market capitalization that have been reported so far are down 145.7% on 38.4% lower revenues. Although growth ratios seem disappointing, the earnings and revenue beat ratio of 62.5% and 75%, respectively, led to solid trading in the sector. The sector has gained 2.22% (average price difference between a day before and after the earnings announcement of a stock) post results. FTXR has a Zacks ETF Rank #4 (Sell) (read: Transport ETFs Gain Despite Soft Q2 Earnings).
This fund offers a pure-play global exposure to auto stocks. It has gained 16.4% mainly driven by soaring Tesla share price. The electric carmaker has been on a crazy ride after reporting the longest streak of profitability in the company’s history and a 5-for-1 stock split announcement. The euphoria surrounding growing electric-vehicle sales and Tesla’s possible inclusion in the S&P 500 Index has added to the strength in the Tesla stock. TSLA has gained more than 56% in a month and takes the top spot in the CARZ portfolio with 11.6% exposure (read: Tesla ETFs Set to Soar Further on 5-for-1 Stock Split).
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Q2 Earnings Effect: 5 Must-Watch ETF Charts
The Q2 reporting cycle has effectively come to an end, with earnings of 98.7% of the S&P 500 market capitalization that has reported so far is down 32.3% on 9.5% lower revenues, with 80.4% beating EPS estimates and 64.0% beating revenue estimates. This is the lowest earnings growth pace since the last earnings downturn following the 2008 recession. However, the proportion of these companies beating consensus estimates, particularly EPS estimates, is tracking above historical trends.
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Given this, several equity ETFs have impressed with their performances and generated handsome returns over the trailing one-month period. While there are winners in many corners of the space, below are five ETFs that buoyed up on strong earnings results. In addition, we have given a chart for their one-month performance and compared them with the broad market fund (SPY - Free Report) and the broad sector.
Invesco Solar ETF (TAN - Free Report)
This ETF offers companies in the solar energy industry. It has gained 22.3% in a month on strong Q2 earnings. In particular, upbeat earnings from First Solar (FSLR - Free Report) , SolarEdge Technologies SEDG, Enphase Energy (ENPH - Free Report) , SunPower Corp. (SPWR - Free Report) and Canadian Solar (CSIQ - Free Report) led to a strong rally in the ETF. TAN has a Zacks ETF Rank #2 (Buy) with a High risk outlook. Overall, the solar industry came up with a 45% earnings beat in Q2 (read: 5 Sector ETFs Soaring Halfway Through Q3).
MicroSectors FANG+ ETN FNGS
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in equal weights of 10% each in its basket. A slew of strong earnings results from the five tech giants in the index such as Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Alphabet GOOGL, Microsoft (MSFT - Free Report) and Facebook has strongly contributed to overall technology earnings. Other stocks in the index such as Tesla (TSLA - Free Report) , and Nvidia (NVDA - Free Report) also came up with solid results. All these led to strong trading in the ETF, which is up 18.1% in a month (read: 5 Tech ETFs at the Forefront of the Latest Sector Rally).
Roundhill Sports Betting & iGaming ETF BETZ
The digital shift has led to the rapid adoption of esports and increased video game usage, pushing revenues and profits higher. This ETF is designed to offer retail and institutional investors exposure to sports betting and iGaming industries. It has surged 21.3% in a month on strong Q2 earnings (read: Time to Gamble on Sports Betting Stocks & ETF?).
First Trust Nasdaq Transportation ETF FTXR
This fund provides exposure to the 31 most-liquid U.S. transportation securities based on volatility, value and growth. It has gained 16.1% in the past month on strong Q2 earnings. Total earnings for 100% of the sector’s market capitalization that have been reported so far are down 145.7% on 38.4% lower revenues. Although growth ratios seem disappointing, the earnings and revenue beat ratio of 62.5% and 75%, respectively, led to solid trading in the sector. The sector has gained 2.22% (average price difference between a day before and after the earnings announcement of a stock) post results. FTXR has a Zacks ETF Rank #4 (Sell) (read: Transport ETFs Gain Despite Soft Q2 Earnings).
First Trust NASDAQ Global Auto ETF CARZ
This fund offers a pure-play global exposure to auto stocks. It has gained 16.4% mainly driven by soaring Tesla share price. The electric carmaker has been on a crazy ride after reporting the longest streak of profitability in the company’s history and a 5-for-1 stock split announcement. The euphoria surrounding growing electric-vehicle sales and Tesla’s possible inclusion in the S&P 500 Index has added to the strength in the Tesla stock. TSLA has gained more than 56% in a month and takes the top spot in the CARZ portfolio with 11.6% exposure (read: Tesla ETFs Set to Soar Further on 5-for-1 Stock Split).
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>