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The Q2 earnings picture is very strong, with broad-based strength across all major sectors and the overall quarterly total on track to reach a new record. Total Q2 earnings from 466 S&P 500 members or 93.9% of the index’s total membership are up 97.8% from the same period last year on 25.8% higher revenues, with 86.9% beating EPS and 86.9% surpassing revenue estimates.
Earnings and revenue growth as well as beat ratios are tracking above the recent historical period. Additionally, earnings estimates have been on a rise for the current quarter and beyond.
Given this, several equity ETFs have impressed with their performance and generated handsome returns over the trailing one-month period though surge in COVID-19 cases with the spread of the Delta variant has suppressed the returns somewhat. Below are five ETFs that have gained from 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.
ETFMG Treatments Testing and Advancements ETF
This fund offers exposure to biotech companies directly engaged in the testing and treatments of infectious diseases. It has risen 11.7% in a month driven by strong Q2 earnings growth and Pfizer vaccine approval news. Earnings for 95.4% of the healthcare sector are up 30.2% from the same period last year on 21.1% higher revenues, with 88.5% of the companies beating on EPS and 96.2% topping revenue estimates (read: Tap the Red Hot Biotech Sector With These 2 Leveraged ETFs).
This ETF offers exposure to the companies that stand to benefit from the increased adoption of cybersecurity technology. Total Q2 earnings for 87.6% of the technology sector are up 65.7% from the same period last year on 25.7% higher revenues, with 96.8% of the companies beating on EPS and 93.7% surpassing revenue estimates. The combined beat is 92.1% — the second highest this earnings season. As such, BUG from cybersecurity corner emerged as the biggest winner, gaining 7.6% in a month.
With 100% of the results out, the financial sector’s Q2 earnings rose 146.5% on revenue growth of 10.8%. The earnings growth rate is the fourth highest of all the sectors and the only pure-play broker dealer ETF is the winner. IAI offers exposure to U.S. investment banks, discount brokerages, and stock exchanges. It has returned 6.5% over the past month and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Financial ETFs to Buy on Taper Talks).
Image Source: Zacks Investment Research
First Trust Nasdaq Retail ETF
The fund offers exposure to U.S. companies within the retail industry. Earnings for 93.8% of the retail sector that have reported Q2 results are up 44.6% on revenue growth of 14.3%, with 91.7% beating on EPS and 95.8% surpassing top-line estimates. This is a much stronger showing from the retailers than what we have seen from the group in other recent periods. As a result, FTXD was up 4.2% over the past month and carries a Zacks ETF Rank #3 (Hold) (read: Retail ETFs Mixed on Blockbuster Q2 Earnings Wave).
Image Source: Zacks Investment Research
Invesco S&P 500 Equal Weight Materials ETF
This fund provides equal-weight exposure to the stocks in the materials sector. Total earnings for the basic materials sector are up 277.4% on 47.3% higher revenues. Earnings growth represents the highest and revenues take the fourth highest spot. Given this, RTM has gained 4.1% in the past month and carries a Zacks ETF Rank #2 with a Medium risk outlook.
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5 Must-Watch ETF Charts of Q2 Earnings
The Q2 earnings picture is very strong, with broad-based strength across all major sectors and the overall quarterly total on track to reach a new record. Total Q2 earnings from 466 S&P 500 members or 93.9% of the index’s total membership are up 97.8% from the same period last year on 25.8% higher revenues, with 86.9% beating EPS and 86.9% surpassing revenue estimates.
Earnings and revenue growth as well as beat ratios are tracking above the recent historical period. Additionally, earnings estimates have been on a rise for the current quarter and beyond.
Given this, several equity ETFs have impressed with their performance and generated handsome returns over the trailing one-month period though surge in COVID-19 cases with the spread of the Delta variant has suppressed the returns somewhat. Below are five ETFs that have gained from 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.
ETFMG Treatments Testing and Advancements ETF
This fund offers exposure to biotech companies directly engaged in the testing and treatments of infectious diseases. It has risen 11.7% in a month driven by strong Q2 earnings growth and Pfizer vaccine approval news. Earnings for 95.4% of the healthcare sector are up 30.2% from the same period last year on 21.1% higher revenues, with 88.5% of the companies beating on EPS and 96.2% topping revenue estimates (read: Tap the Red Hot Biotech Sector With These 2 Leveraged ETFs).
Image Source: Zacks Investment Research
Global X Cybersecurity ETF (BUG - Free Report)
This ETF offers exposure to the companies that stand to benefit from the increased adoption of cybersecurity technology. Total Q2 earnings for 87.6% of the technology sector are up 65.7% from the same period last year on 25.7% higher revenues, with 96.8% of the companies beating on EPS and 93.7% surpassing revenue estimates. The combined beat is 92.1% — the second highest this earnings season. As such, BUG from cybersecurity corner emerged as the biggest winner, gaining 7.6% in a month.
Image Source: Zacks Investment Research
iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI - Free Report)
With 100% of the results out, the financial sector’s Q2 earnings rose 146.5% on revenue growth of 10.8%. The earnings growth rate is the fourth highest of all the sectors and the only pure-play broker dealer ETF is the winner. IAI offers exposure to U.S. investment banks, discount brokerages, and stock exchanges. It has returned 6.5% over the past month and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Financial ETFs to Buy on Taper Talks).
Image Source: Zacks Investment Research
First Trust Nasdaq Retail ETF
The fund offers exposure to U.S. companies within the retail industry. Earnings for 93.8% of the retail sector that have reported Q2 results are up 44.6% on revenue growth of 14.3%, with 91.7% beating on EPS and 95.8% surpassing top-line estimates. This is a much stronger showing from the retailers than what we have seen from the group in other recent periods. As a result, FTXD was up 4.2% over the past month and carries a Zacks ETF Rank #3 (Hold) (read: Retail ETFs Mixed on Blockbuster Q2 Earnings Wave).
Image Source: Zacks Investment Research
Invesco S&P 500 Equal Weight Materials ETF
This fund provides equal-weight exposure to the stocks in the materials sector. Total earnings for the basic materials sector are up 277.4% on 47.3% higher revenues. Earnings growth represents the highest and revenues take the fourth highest spot. Given this, RTM has gained 4.1% in the past month and carries a Zacks ETF Rank #2 with a Medium risk outlook.
Image Source: Zacks Investment Research