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Defying historical trend, Wall Street is off to a great start in June. The three key indexes, namely the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite have added about 1.1%, 1% and 2.3%, respectively, in the last five days (as of Jun 5, 2018).
And why not? With U.S. economic growth being the sturdiest since recession, unemployment at an 18-year low and manufacturing activity at a decent clip despite the ongoing trade spat, it makes sense to ride out the amazing growth momentum (read: Nasdaq at All-Time High: Play These 5 ETFs).
Right Time to Tap This Winning Momentum
Overall, the positive developments in U.S. markets and a few sectors present us with a solid buying opportunity at present. In order to pick the right funds, investors can land up on soaring ETFs, that are at their 52-week highs but still have the potential to gain further on solid industry dynamics.
This is a sort of Momentum investing. The basic idea is “buy high and sell higher,” with an expectation that the trend that has already been established will be intact in the near term. However, overvaluation concerns are the key risks associated with this inventing strategy.
In this context, we highlight five ETFs that are trading at their 52-week highs but have more room for growth.
Janus Henderson Small Cap Growth Alpha ETF (JSML - Free Report)
The fund gives exposure to small-sized capitalization stocks. Stocks are picked on the basis of the company’s performance in three critical areas: growth, profitability and capital efficiency. With the Fed hike in cue, the greenback likely to gain strength, geopolitical tensions rife and economic growth slowing abroad (especially in developed economies), small caps are sizzling bets right now.
Economic well-being is seen as beneficial for domestic small-cap stocks. Since the U.S. economy has been performing better than several other developed economies, the fund is likely to score higher (read: Fed, Trade & Global Politics to Rule June: 6 ETF Picks).
This fund gives exposure to companies actively involved in the cloud-computing industry. Cloud computing is a flourishing area in the tech space. Gartner recently forecast that sales of worldwide public cloud services will top $186 billion in 2018 versus $153.5 billion last year. The figure is likely to almost double to a whopping $302.5 billion by 2021 (read: Why Cloud ETFs Could Soar Ahead).
Global X Health & Wellness Thematic ETF
The fund measures the performance of companies in developed markets that provide products and services aimed at promoting physical wellness. People are becoming more health conscious. Millennials — gradually turning out to be the backbone of the U.S. economy — are currently the key drivers of organic produce sales.
Per a research report, the Health and Wellness industry in the United States makes over $153 billion a year, which represents a quarter of the global sales. The market has grown at a steady rate of 5% and has brighter prospects (read: 4 ETF Ideas to Follow Millennials' Lifestyle).
BUZZ US Sentiment Leaders ETF
The fund tracks stocks with the most positive insights collected from social media networks. The social media space is on a tear lately on its growing acceptance. The space recently cheered the addition of Twitter to the S&P 500 and inclusion of Netflix (NFLX - Free Report) in the S&P 100. Twitter takes the top spot in the fund with about 3.53% exposure while Netflix has about 3.25% focus (read: Social Media ETFs to Gain as Twitter Prepares for S&P 500).
Invesco DWA Consumer Cyclicals Momentum ETF (PEZ - Free Report)
The underlying DWA Consumer Cyclicals Technical Leaders Index picks companies that show relative strength and are composed of at least 30 stocks. Specialty Retail (26.94%), Hotels, Restaurants and Leisure (21.23%) and Textile, Apparel and Luxury Goods (9.79%) hold the top spots in the fund. With U.S. economic growth in decent shape and the job market steady, consumer cyclical ETF should see a smooth run ahead.
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5 ETFs to Buy at 52-Week High
Defying historical trend, Wall Street is off to a great start in June. The three key indexes, namely the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite have added about 1.1%, 1% and 2.3%, respectively, in the last five days (as of Jun 5, 2018).
And why not? With U.S. economic growth being the sturdiest since recession, unemployment at an 18-year low and manufacturing activity at a decent clip despite the ongoing trade spat, it makes sense to ride out the amazing growth momentum (read: Nasdaq at All-Time High: Play These 5 ETFs).
Right Time to Tap This Winning Momentum
Overall, the positive developments in U.S. markets and a few sectors present us with a solid buying opportunity at present. In order to pick the right funds, investors can land up on soaring ETFs, that are at their 52-week highs but still have the potential to gain further on solid industry dynamics.
This is a sort of Momentum investing. The basic idea is “buy high and sell higher,” with an expectation that the trend that has already been established will be intact in the near term. However, overvaluation concerns are the key risks associated with this inventing strategy.
In this context, we highlight five ETFs that are trading at their 52-week highs but have more room for growth.
Janus Henderson Small Cap Growth Alpha ETF (JSML - Free Report)
The fund gives exposure to small-sized capitalization stocks. Stocks are picked on the basis of the company’s performance in three critical areas: growth, profitability and capital efficiency. With the Fed hike in cue, the greenback likely to gain strength, geopolitical tensions rife and economic growth slowing abroad (especially in developed economies), small caps are sizzling bets right now.
Economic well-being is seen as beneficial for domestic small-cap stocks. Since the U.S. economy has been performing better than several other developed economies, the fund is likely to score higher (read: Fed, Trade & Global Politics to Rule June: 6 ETF Picks).
First Trust Cloud Computing ETF (SKYY - Free Report)
This fund gives exposure to companies actively involved in the cloud-computing industry. Cloud computing is a flourishing area in the tech space. Gartner recently forecast that sales of worldwide public cloud services will top $186 billion in 2018 versus $153.5 billion last year. The figure is likely to almost double to a whopping $302.5 billion by 2021 (read: Why Cloud ETFs Could Soar Ahead).
Global X Health & Wellness Thematic ETF
The fund measures the performance of companies in developed markets that provide products and services aimed at promoting physical wellness. People are becoming more health conscious. Millennials — gradually turning out to be the backbone of the U.S. economy — are currently the key drivers of organic produce sales.
Per a research report, the Health and Wellness industry in the United States makes over $153 billion a year, which represents a quarter of the global sales. The market has grown at a steady rate of 5% and has brighter prospects (read: 4 ETF Ideas to Follow Millennials' Lifestyle).
BUZZ US Sentiment Leaders ETF
The fund tracks stocks with the most positive insights collected from social media networks. The social media space is on a tear lately on its growing acceptance. The space recently cheered the addition of Twitter to the S&P 500 and inclusion of Netflix (NFLX - Free Report) in the S&P 100. Twitter takes the top spot in the fund with about 3.53% exposure while Netflix has about 3.25% focus (read: Social Media ETFs to Gain as Twitter Prepares for S&P 500).
Invesco DWA Consumer Cyclicals Momentum ETF (PEZ - Free Report)
The underlying DWA Consumer Cyclicals Technical Leaders Index picks companies that show relative strength and are composed of at least 30 stocks. Specialty Retail (26.94%), Hotels, Restaurants and Leisure (21.23%) and Textile, Apparel and Luxury Goods (9.79%) hold the top spots in the fund. With U.S. economic growth in decent shape and the job market steady, consumer cyclical ETF should see a smooth run ahead.
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 >>