The U.S. stock market has been roaring higher halfway through the third quarter with the S&P 500 and the Nasdaq Composite Index hitting multiple new highs. Notably, the Nasdaq Composite Index crossed the 11,000 milestone last month while the S&P 500 has topped the 2,400 level this week. Meanwhile, the Dow Jones Industrial Index ended above 28,000 for the first time in six months (read: Dow Reclaims 28,000: 5 Stocks Driving the ETF Rally).

The positive developments in the coronavirus vaccine, hopes of a swift economic rebound and better-than-expected earnings have been driving the stocks higher. The unprecedented fiscal and monetary stimulus in response to the pandemic, rise in mergers and acquisitions as well as the recent weakens in dollar are also acting as a tailwind.

Moreover, a statement released by the U.S. Trade Representative bolstered optimism. Per the statement, both the United States and China are in discussion for the implementation of the historic Phase One Agreement and are committed to take the steps necessary to ensure its success.

While the rally seems broad-based, a few sectors are outperforming the market halfway through the third quarter. Below we have highlighted five such ETFs that raked in more than 25% gains in the same timeframe and could be better plays if the trend prevails.

Invesco Solar ETF (TAN Quick QuoteTAN - Free Report) – Up 48.2%

The solar industry has been on fire buoyed by solid earnings coupled with the presumptive Democratic presidential candidate Joe Biden’s push for clean energy and infrastructure plans. This ETF offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 27 stocks in the basket. American firms dominate with half of the fund’s portfolio, followed by China (22.4%) and Spain (7.3%). The product has amassed $1.2 billion in its asset base and trades in a solid volume of around 547,000 shares a day. It charges investors 71 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Clean Energy Stocks & ETFs to Buy as Biden Gains Popularity).

Invesco DWA Consumer Cyclicals Momentum ETF (PEZ Quick QuotePEZ - Free Report) – Up 42.6%

The cyclical sector has been benefiting from the optimism over a coronavirus vaccine and the recovering economy. This is because these are tied to economic activities and when growth improves, these perform well. The latest rounds of data signal that the economy is stabilizing amid the ongoing pandemic, providing enough impetus to economic-sensitive sectors. This product tracks the DWA Consumer Cyclicals Technical Leaders Index. It holds 44 stocks having positive relative strength (momentum) characteristics. About 34.7% of the portfolio is dominated by specialty retail while diversified retail round out the next spot. The fund has managed $43.2 million in its asset base while trading in a lower average daily volume of 7,000 shares. It charges 60 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

ProShares Online Retail ETF (ONLN Quick QuoteONLN - Free Report) – Up 31.8%

With the rapid digital shift in consumer landscape, online shopping has surged as people want to avoid direct contact or go outside. This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 26 stocks in its basket. The product has amassed $325 million in its asset base and trades in moderate volume of around 126,000 shares a day on average. It charges 58 bps in annual fees from investors (read: Retail ETFs Look Strong Post Q2 Earnings).

Reality Shares Nasdaq NexGen Economy ETF (BLCN Quick QuoteBLCN - Free Report) – Up 30.2%

The technology sector has regained its momentum lately driven by the global digital shift that has accelerated e-commerce for everything ranging from remote working to entertainment and shopping. This ETF tracks the Reality Shares NASDAQ Blockchain Economy Index, which measures the returns of companies that are committing material resources to developing, researching, supporting, innovating or utilizing blockchain technology for their use or for use by others. It holds 67 stocks in its basket with AUM of $112 million and trades in average daily volume of 42,000 shares. The product charges 68 bps in annual fees (read: 5 Tech ETFs at the Forefront of the Latest Sector Rally).

iShares U.S. Home Construction ETF (ITB Quick QuoteITB - Free Report) – Up 28.6%

The housing sector has emerged strongly from the COVID-19 pandemic as the S&P Homebuilders Select Industry Index reached a record high in 15 years early this month. Tumbling mortgage rates and higher demand for new homes are driving homebuilders higher. This fund provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $2.2 billion, it holds a basket of 44 stocks with homebuilding and building products accounting for 66.2% and 14.1% share, respectively. The product charges 42 bps in annual fees and trades in heavy volume of around 3.1 million shares a day on average. It carries a Zack ETF Rank #3 with a High risk outlook (read: 5 Stocks Driving Homebuilding ETF to New Highs).

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