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5 Niche ETFs That Led the Market Rally Higher Last Week
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Wall Street strongly rebounded last week with all three major bourses registering the best week since November. The blue-chip Dow Jones gained 3.9% while the S&P 500 and the tech-heavy Nasdaq Composite Index spiked 4.7% and 6%, respectively. In fact, both the S&P 500 and Dow Jones enjoyed the longest winning streak since August 2020 (read: Ride the Impressive Nasdaq Rally With These 5 ETFs).
The gains were driven by the fading of retail trading frenzy for stocks like GameStop (GME - Free Report) , expectations of a large stimulus by U.S. President Joe Biden’s administration and solid corporate earnings. Notably, the stronger-than-expected results so far in the fourth quarter have led analysts’ to raise their estimates for the coming quarters. Earnings growth for Q4 has turned modestly positive, following three-straight quarters of decline, thanks to impressive results from the tech sector leaders.
The Senate has passed a budget resolution, allowing Congress to continue its quest toward passing a $1.9 trillion coronavirus stimulus bill. Additionally, signs of a healing labor market, continued optimism surrounding new vaccines, widening reach of vaccination, and easing restrictions drove the stocks higher.
The U.S. economy added 49,000 jobs last month, indicating a return to growth after job losses in December. The unemployment rate also dropped to 6.3%, down significantly from its pandemic high of 14.7% in April.
While there have been winners in many corner of the space, we have highlighted five ETFs from different zones that were at the heart of the market rally last week:
Cannabis: Global X Cannabis ETF – Up 26.5%
POTX seeks to invest in companies across the cannabis industry and tracks the Cannabis Index. It holds 18 stocks in its basket, with Canadian firms accounting for 79% of assets while the United States and Britain take 10.5% and 6.9% share, respectively. The product has accumulated $115.4 million in its asset base and trades in an average daily volume of 312,000 shares. Expense ratio comes in at 0.50% (read: Cannabis ETFs Spike on Jazz-GW Pharma Deal).
This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. The fund holds 28 stocks in its basket, with travel booking and reservations making up for 48.6%, followed by travel price comparison (17.2%) and ride sharing and hailing (13.5%). AWAY has accumulated $101.4 million in its asset base and trades in an average daily volume of 118,000 shares.
Commodity Producer: North Shore Global Uranium Mining ETF (URNM - Free Report) – Up 15.4%
This ETF provides exposure to companies that are involved in the mining, exploration, development, and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee. The ETF holds 27 stocks in its basket with double-digit exposure to the top three firms. It has accumulated $63.4 million in its asset base and trades in lower volume of 54,000 shares per day on average.
PRNT follows the Total 3D-Printing Index, which is designed to track the price movement of companies involved in the 3D printing industry. It has a basket of 49 securities with 3D printing hardware taking the largest share at 50%, while CAD & 3D printing simulation services and 3D printing centers round off the next two with double-digit allocation each. The fund charges 66 bps in annual fees while trades in an average daily volume of 325,000 shares. The ETF has amassed $369.4 million in its asset base (read: 5 Sector ETFs That Outperformed in a Volatile January).
Consumer: Invesco DWA Consumer Cyclicals Momentum ETF (PEZ - Free Report) – Up 13.2%
This fund tracks the DWA Consumer Cyclicals Technical Leaders Index. It holds 41 stocks having positive relative strength (momentum) characteristics. About 28.7% of the portfolio is dominated by hotels, restaurants & leisure, while specialty retail, and Internet & direct marketing round out the next two spots. The fund has managed $82.5 million in its asset base and trades in a lower average daily volume of 14,000 shares. It charges 60 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
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5 Niche ETFs That Led the Market Rally Higher Last Week
Wall Street strongly rebounded last week with all three major bourses registering the best week since November. The blue-chip Dow Jones gained 3.9% while the S&P 500 and the tech-heavy Nasdaq Composite Index spiked 4.7% and 6%, respectively. In fact, both the S&P 500 and Dow Jones enjoyed the longest winning streak since August 2020 (read: Ride the Impressive Nasdaq Rally With These 5 ETFs).
The gains were driven by the fading of retail trading frenzy for stocks like GameStop (GME - Free Report) , expectations of a large stimulus by U.S. President Joe Biden’s administration and solid corporate earnings. Notably, the stronger-than-expected results so far in the fourth quarter have led analysts’ to raise their estimates for the coming quarters. Earnings growth for Q4 has turned modestly positive, following three-straight quarters of decline, thanks to impressive results from the tech sector leaders.
The Senate has passed a budget resolution, allowing Congress to continue its quest toward passing a $1.9 trillion coronavirus stimulus bill. Additionally, signs of a healing labor market, continued optimism surrounding new vaccines, widening reach of vaccination, and easing restrictions drove the stocks higher.
The U.S. economy added 49,000 jobs last month, indicating a return to growth after job losses in December. The unemployment rate also dropped to 6.3%, down significantly from its pandemic high of 14.7% in April.
While there have been winners in many corner of the space, we have highlighted five ETFs from different zones that were at the heart of the market rally last week:
Cannabis: Global X Cannabis ETF – Up 26.5%
POTX seeks to invest in companies across the cannabis industry and tracks the Cannabis Index. It holds 18 stocks in its basket, with Canadian firms accounting for 79% of assets while the United States and Britain take 10.5% and 6.9% share, respectively. The product has accumulated $115.4 million in its asset base and trades in an average daily volume of 312,000 shares. Expense ratio comes in at 0.50% (read: Cannabis ETFs Spike on Jazz-GW Pharma Deal).
Transportation: ETFMG Travel Tech ETF (AWAY - Free Report) – Up 15.8%
This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. The fund holds 28 stocks in its basket, with travel booking and reservations making up for 48.6%, followed by travel price comparison (17.2%) and ride sharing and hailing (13.5%). AWAY has accumulated $101.4 million in its asset base and trades in an average daily volume of 118,000 shares.
Commodity Producer: North Shore Global Uranium Mining ETF (URNM - Free Report) – Up 15.4%
This ETF provides exposure to companies that are involved in the mining, exploration, development, and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee. The ETF holds 27 stocks in its basket with double-digit exposure to the top three firms. It has accumulated $63.4 million in its asset base and trades in lower volume of 54,000 shares per day on average.
Technology: 3D Printing ETF (PRNT - Free Report) – Up 15%
PRNT follows the Total 3D-Printing Index, which is designed to track the price movement of companies involved in the 3D printing industry. It has a basket of 49 securities with 3D printing hardware taking the largest share at 50%, while CAD & 3D printing simulation services and 3D printing centers round off the next two with double-digit allocation each. The fund charges 66 bps in annual fees while trades in an average daily volume of 325,000 shares. The ETF has amassed $369.4 million in its asset base (read: 5 Sector ETFs That Outperformed in a Volatile January).
Consumer: Invesco DWA Consumer Cyclicals Momentum ETF (PEZ - Free Report) – Up 13.2%
This fund tracks the DWA Consumer Cyclicals Technical Leaders Index. It holds 41 stocks having positive relative strength (momentum) characteristics. About 28.7% of the portfolio is dominated by hotels, restaurants & leisure, while specialty retail, and Internet & direct marketing round out the next two spots. The fund has managed $82.5 million in its asset base and trades in a lower average daily volume of 14,000 shares. It charges 60 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>