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Escalating tensions between Moscow and the West over Ukraine and its implications on the economy has led to huge volatility and uncertainty in the stock market. All the major U.S. indices posted sharp losses in February and extended the sell-off to start March. Higher inflation and the Fed rate hike bets added to the chaos.
While most of the sectors are being beaten badly, a few are thriving and scaling new 52-week highs. Sector ETFs like SPDR S&P Metals & Mining ETF (XME - Free Report) , Invesco S&P SmallCap Energy ETF (PSCE - Free Report) , Invesco Aerospace & Defense ETF (PPA - Free Report) , and Virtus Real Asset Income ETF (VRAI - Free Report) from different corners of the space have been the leaders amid the market turmoil.
Sectors on Rise
In particular, commodity producers are benefiting as the tensions have led to supply-disruption fears in an already-tight commodity market, given that Russia is a commodities powerhouse and a key supplier of energy, metals and agri. Oil topped $110 per barrel while gold topped $1900 per ounce on its safe-haven status. Nickel and aluminum prices soared to multi-year highs while wheat and corn also spiked. The conflict could disrupt grain flows from the key Black Sea export region. Russia is the world's third-largest producer of gold as well (read: Russia-Ukraine Crisis Spark Rally in Commodity ETFs).
Agri commodities also jumped on the geopolitical tension. Notably, Ukraine is a major exporter of corn and wheat. Together, Russia and Ukraine account for roughly 29% of the global wheat export market.
Meanwhile, the defense and cybersecurity sectors are also showing immense strength. Any warfare or military strike means increased purchase and usage of weapons that will benefit the defense industry. Cybersecurity stocks have surged as many experts warned about the possibility of cyberattacks by Russia in retaliation to Western sanctions. In fact, cyberattacks appear to be part of Russia’s war strategy.
SPDR S&P Metals & Mining ETF offers a broad exposure to the U.S. metal and mining industry by tracking the S&P Metals and Mining Select Industry. It holds 32 stocks in its basket with steel firms accounting for 40.6% of the portfolio while coal & consumable fuels, aluminum and gold round off the next two spots with double-digit exposure each.
SPDR S&P Metals & Mining ETF has 0.35% in expense ratio and has AUM of $2.7 billion. It trades in an average daily volume around 5 million shares and has surged 28% in a month (read: 5 Sector ETFs That Gained Double-Digits in Wild February).
Invesco S&P SmallCap Energy ETF offers exposure to the companies that are principally engaged in producing, distributing or servicing energy-related products, including oil and gas exploration and production, refining, oil services and pipelines. It tracks the S&P Small Cap 600 Capped Energy Index, holding 33 stocks in its basket.
Invesco S&P SmallCap Energy ETF has accumulated $128.4 million in its asset base and charges 29 bps in annual fees. It trades in an average daily volume of 526,000 shares and gas a Zacks ETF Rank #3 (Hold). PSCE has gained about 16% in a month (read: Oil Rallies Amid Russia-Ukraine Crisis: ETFs to Bet on).
Invesco Aerospace & Defense ETF offers exposure to 53 companies involved in the development, manufacturing, and operations as well as provides support to U.S. defense, homeland security and aerospace. It tracks the SPADE Defense Index, charging 61 bps in annual fees from investors.
Invesco Aerospace & Defense ETF has so far managed assets of $676.4 million and trades in an average daily volume of $40,000 shares. It has a Zacks ETF Rank #3 and has gained about 12% in a month.
Virtus Real Asset Income ETF (VRAI - Free Report) – 52-Week High: $28.04
Virtus Real Asset Income ETF seeks to provide exposure to U.S. listed, real asset securities by tracking the Indxx Real Asset Income Index, which comprises real estate, natural resources and infrastructure stocks with a history of providing income and dividend growth. It holds 90 stocks in its basket with each accounting for no more than 2.1% of assets.
Virtus Real Asset Income ETF has accumulated $140.1 million in its asset base and trades in volumes of 11,000 shares a day on average. It charges 55 bps in annual fees and has added 4.5% in a month.
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4 Sector ETFs Flying High Amid Market Turmoil
Escalating tensions between Moscow and the West over Ukraine and its implications on the economy has led to huge volatility and uncertainty in the stock market. All the major U.S. indices posted sharp losses in February and extended the sell-off to start March. Higher inflation and the Fed rate hike bets added to the chaos.
While most of the sectors are being beaten badly, a few are thriving and scaling new 52-week highs. Sector ETFs like SPDR S&P Metals & Mining ETF (XME - Free Report) , Invesco S&P SmallCap Energy ETF (PSCE - Free Report) , Invesco Aerospace & Defense ETF (PPA - Free Report) , and Virtus Real Asset Income ETF (VRAI - Free Report) from different corners of the space have been the leaders amid the market turmoil.
Sectors on Rise
In particular, commodity producers are benefiting as the tensions have led to supply-disruption fears in an already-tight commodity market, given that Russia is a commodities powerhouse and a key supplier of energy, metals and agri. Oil topped $110 per barrel while gold topped $1900 per ounce on its safe-haven status. Nickel and aluminum prices soared to multi-year highs while wheat and corn also spiked. The conflict could disrupt grain flows from the key Black Sea export region. Russia is the world's third-largest producer of gold as well (read: Russia-Ukraine Crisis Spark Rally in Commodity ETFs).
Agri commodities also jumped on the geopolitical tension. Notably, Ukraine is a major exporter of corn and wheat. Together, Russia and Ukraine account for roughly 29% of the global wheat export market.
Meanwhile, the defense and cybersecurity sectors are also showing immense strength. Any warfare or military strike means increased purchase and usage of weapons that will benefit the defense industry. Cybersecurity stocks have surged as many experts warned about the possibility of cyberattacks by Russia in retaliation to Western sanctions. In fact, cyberattacks appear to be part of Russia’s war strategy.
SPDR S&P Metals & Mining ETF (XME - Free Report) – 52-Week High: $55.25
SPDR S&P Metals & Mining ETF offers a broad exposure to the U.S. metal and mining industry by tracking the S&P Metals and Mining Select Industry. It holds 32 stocks in its basket with steel firms accounting for 40.6% of the portfolio while coal & consumable fuels, aluminum and gold round off the next two spots with double-digit exposure each.
SPDR S&P Metals & Mining ETF has 0.35% in expense ratio and has AUM of $2.7 billion. It trades in an average daily volume around 5 million shares and has surged 28% in a month (read: 5 Sector ETFs That Gained Double-Digits in Wild February).
Invesco S&P SmallCap Energy ETF (PSCE - Free Report) – 52-Week High: $9.05
Invesco S&P SmallCap Energy ETF offers exposure to the companies that are principally engaged in producing, distributing or servicing energy-related products, including oil and gas exploration and production, refining, oil services and pipelines. It tracks the S&P Small Cap 600 Capped Energy Index, holding 33 stocks in its basket.
Invesco S&P SmallCap Energy ETF has accumulated $128.4 million in its asset base and charges 29 bps in annual fees. It trades in an average daily volume of 526,000 shares and gas a Zacks ETF Rank #3 (Hold). PSCE has gained about 16% in a month (read: Oil Rallies Amid Russia-Ukraine Crisis: ETFs to Bet on).
Invesco Aerospace & Defense ETF (PPA - Free Report) – 52-Week High: $77.58
Invesco Aerospace & Defense ETF offers exposure to 53 companies involved in the development, manufacturing, and operations as well as provides support to U.S. defense, homeland security and aerospace. It tracks the SPADE Defense Index, charging 61 bps in annual fees from investors.
Invesco Aerospace & Defense ETF has so far managed assets of $676.4 million and trades in an average daily volume of $40,000 shares. It has a Zacks ETF Rank #3 and has gained about 12% in a month.
Virtus Real Asset Income ETF (VRAI - Free Report) – 52-Week High: $28.04
Virtus Real Asset Income ETF seeks to provide exposure to U.S. listed, real asset securities by tracking the Indxx Real Asset Income Index, which comprises real estate, natural resources and infrastructure stocks with a history of providing income and dividend growth. It holds 90 stocks in its basket with each accounting for no more than 2.1% of assets.
Virtus Real Asset Income ETF has accumulated $140.1 million in its asset base and trades in volumes of 11,000 shares a day on average. It charges 55 bps in annual fees and has added 4.5% in a month.