We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
"Worst September in 18 Years"? 4 Sector ETFs Surviving Selloffs
Read MoreHide Full Article
After a superb August, September looks gloomy for Wall Street. This is especially true given the month’s ill-famed seasonality in the equity market. According to moneychimp.com, a consensus carried out from 1950 to 2019 has revealed that September ended up offering positive returns in 32 years and negative returns in 38 years, with an average return of negative 0.57%, which is worse than any month.
This year looks to be no exception with a MarketWatch article indicating September 2020 could be the worst in 18 years. Doubts over the faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, talks of major banks engaging in transferring illicit funds, profit booking on tech stocks and pre-election volatility in the United States have spelt trouble for the markets (read: A Biden Presidency in the Making? ETF Strategies to Follow).
The S&P 500 has been down about 6% so far in the month. The index has lost 7.4% since it hit the peak on Sep 2. If there is a decline of 10% from a recent peak in the month, it will make an awful September for the index. Previously, it had crashed 11% in the month in 2002 on fears of the dot-com bubble, per the MarketWatch article (read: Is a September Lull Inevitable? Play 6 ETFs).
However, some sectors have still benefited in the month and braved the selloffs. Below we highlight those winners.
Gaming/E-sports
The gaming industry has been booming this year buoyed by the pandemic as people are mostly stuck indoors. As a result, spending on video games in the United States has skyrocketed to new heights in the past few months.
To add more allure to gaming investing, DraftKings (DKNG - Free Report) and Caesars (CZR) recently announced a multi-year deal with ESPN that will feature their content on the network's digital and TV platforms. Per the deal, DraftKings will be the exclusive provider of daily fantasy sports and a co-exclusive partner for gambling link-outs from ESPN, the company said, as quoted on CNBC.
Microsoft has also announced its plans to acquire video game behemoth Bethesda’s parent company — ZeniMax Media — one of the world’s most-important gaming firms, for $7.5 billion. All these news boosted Roundhill Sports Betting & iGaming ETF (BETZ - Free Report) (up 1.5%) in the month (read: 4 Reasons to be Bullish on Microsoft ETFs Now).
Biotech
Although there were doubts about the rollout of vaccines at the beginning of September,AstraZeneca Plc (AZN) resumed the U.K. trial of its COVID-19 vaccine, AZD1222, in collaboration with the University of Oxford, following confirmation by the Medicines Health Regulatory Authority (MHRA) that it was safe to do so. The trial was paused globally after a person who received the vaccine had an unexplained illness (read: ETFs to Gain as AstraZeneca Resumes Coronavirus Vaccine Trial).
Pfizer’s (PFE) management said that the vaccine candidate, BNT162b2, if proven to be safe and effective by federal regulators, in collaboration with BioNTech could reach Americans before the end of this year. No wonder, Virtus LifeSci Biotech Products ETF (BBP - Free Report) (up 4.4%) and Defiance Nasdaq Junior Biotechnology ETF (up 5.6%) are two of the prominent gainers in the space in September (read: Healthcare ETFs, Stocks That Gained Double Digits Last Week).
Clean Energy
Growing consumer electric vehicle adoption, an increase in charging stations by U.S. states, increased solar-storage installations have acted as a tailwind for the clean energy sector. The space is also set to benefit from the increasing deployment of clean energy in Europe and China. Invesco Global Clean Energy ETF (PBD - Free Report) (down 0.01%) has been almost flat this month.
Materials
Since the materials sector tends to be one of the most sensitive to global economic growth projections and the resultant demand, reopening trade led the sector’s way higher in the third quarter. Invesco SP 500 Equal Weight Materials ETF has lost only 0.5% in the month (read: Materials Sector Gains Steam in Q3: 5 Best ETFs & Stocks).
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
"Worst September in 18 Years"? 4 Sector ETFs Surviving Selloffs
After a superb August, September looks gloomy for Wall Street. This is especially true given the month’s ill-famed seasonality in the equity market. According to moneychimp.com, a consensus carried out from 1950 to 2019 has revealed that September ended up offering positive returns in 32 years and negative returns in 38 years, with an average return of negative 0.57%, which is worse than any month.
This year looks to be no exception with a MarketWatch article indicating September 2020 could be the worst in 18 years. Doubts over the faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, talks of major banks engaging in transferring illicit funds, profit booking on tech stocks and pre-election volatility in the United States have spelt trouble for the markets (read: A Biden Presidency in the Making? ETF Strategies to Follow).
The S&P 500 has been down about 6% so far in the month. The index has lost 7.4% since it hit the peak on Sep 2. If there is a decline of 10% from a recent peak in the month, it will make an awful September for the index. Previously, it had crashed 11% in the month in 2002 on fears of the dot-com bubble, per the MarketWatch article (read: Is a September Lull Inevitable? Play 6 ETFs).
However, some sectors have still benefited in the month and braved the selloffs. Below we highlight those winners.
Gaming/E-sports
The gaming industry has been booming this year buoyed by the pandemic as people are mostly stuck indoors. As a result, spending on video games in the United States has skyrocketed to new heights in the past few months.
To add more allure to gaming investing, DraftKings (DKNG - Free Report) and Caesars (CZR) recently announced a multi-year deal with ESPN that will feature their content on the network's digital and TV platforms. Per the deal, DraftKings will be the exclusive provider of daily fantasy sports and a co-exclusive partner for gambling link-outs from ESPN, the company said, as quoted on CNBC.
Microsoft has also announced its plans to acquire video game behemoth Bethesda’s parent company — ZeniMax Media — one of the world’s most-important gaming firms, for $7.5 billion. All these news boosted Roundhill Sports Betting & iGaming ETF (BETZ - Free Report) (up 1.5%) in the month (read: 4 Reasons to be Bullish on Microsoft ETFs Now).
Biotech
Although there were doubts about the rollout of vaccines at the beginning of September,AstraZeneca Plc (AZN) resumed the U.K. trial of its COVID-19 vaccine, AZD1222, in collaboration with the University of Oxford, following confirmation by the Medicines Health Regulatory Authority (MHRA) that it was safe to do so. The trial was paused globally after a person who received the vaccine had an unexplained illness (read: ETFs to Gain as AstraZeneca Resumes Coronavirus Vaccine Trial).
Pfizer’s (PFE) management said that the vaccine candidate, BNT162b2, if proven to be safe and effective by federal regulators, in collaboration with BioNTech could reach Americans before the end of this year. No wonder, Virtus LifeSci Biotech Products ETF (BBP - Free Report) (up 4.4%) and Defiance Nasdaq Junior Biotechnology ETF (up 5.6%) are two of the prominent gainers in the space in September (read: Healthcare ETFs, Stocks That Gained Double Digits Last Week).
Clean Energy
Growing consumer electric vehicle adoption, an increase in charging stations by U.S. states, increased solar-storage installations have acted as a tailwind for the clean energy sector. The space is also set to benefit from the increasing deployment of clean energy in Europe and China. Invesco Global Clean Energy ETF (PBD - Free Report) (down 0.01%) has been almost flat this month.
Materials
Since the materials sector tends to be one of the most sensitive to global economic growth projections and the resultant demand, reopening trade led the sector’s way higher in the third quarter. Invesco SP 500 Equal Weight Materials ETF has lost only 0.5% in the month (read: Materials Sector Gains Steam in Q3: 5 Best ETFs & Stocks).
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 >>