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Beyond Clean Energy, 5 Best Global ETF Areas of Q3
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The third quarter of 2020 has been all about coronavirus-related developments.Global fiscal and monetary stimulus, coronavirus vaccine hopes, pent-up consumer demand and decent earnings releases kept global markets steady in July and August.
But Wall Street is on its way for the first monthly decline in September since March.Doubts over a faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, reports 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.
Overall, the S&P 500 has gained about 11.2% in the past three months, while the Nasdaq Composite is up about 14.1%. All-world ETF iShares MSCI ACWI ETF (ACWI - Free Report) has added 10.2%. Against this backdrop, let’s take a look at which global ETFs excelled in the July-September period.
Global clean energy ruled the space in the third quarter with Invesco Solar ETF (TAN - Free Report) , Invesco WilderHill Clean Energy ETF (PBW - Free Report) andFirst Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report) adding as much as 67.7%, 46.3% and 40.9%, respectively. However, there are some other areas that also outperformed in the third quarter.
Silver Bullion & Mining
Silver has been on a stellar ride with prices climbing to the highest level in nearly seven years. Increase in investment demand, pick-up in industrial activity due to factory reopening after lockdowns, and investors’ appetite for alternatives to the safe-haven asset gold (which is pretty pricey at the current level) led to the rally (read: Silver ETFs or Gold: Which Metal to Shine More Ahead?).
Unlike gold, silver has considerable presence in the industrial sector. About 50% of the metal’s total demand comes from industrial applications. So, the reopening of global economies is helping silver more than the yellow metal. Aberdeen Standard Physical Silver Shares ETF (SIVR - Free Report) (up 29.8%) and iShares Silver Trust (SLV - Free Report) (up 29.5%) were the toppers in the segment.
FANG+
The rapid adoption of cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, machine learning, digital communication and 5G technology provided a big added advantage to the high-tech space. Activities from home amid lockdown have boosted the note further.
Tesla, which has a considerable weight in MicroSectors FANG+ ETN (FNGS - Free Report) , has soared this year and hence benefited the note. FNGS, which provides exposure to a group of highly-traded growth stocks of next generation technology and tech-enabled companies, is up about 28.7% in the third quarter(read: Tesla's 'Battery Day': Pain or Gain for ETFs Over Long Term?).
Online Retail
The global digital shift that has accelerated e-commerce for everything, ranging from remote working to entertainment and shopping, has driven the sector higher. Amplify Online Retail ETF (IBUY - Free Report) (up 26.5%) and ProShares Online Retail ETF (ONLN - Free Report) (up 23.1%) were the winners in the segment.
IPO
The IPO market is very heathy this year despite the pandemic. We have seen more than 100 IPOs till August. The year started with a surge in biotech IPOs. Some of these newly-public companies are working on coronavirus vaccines and therapeutics and have been very popular with investors (read: Invest in Hottest IPOs With These ETFs).
September was also a smashing month with cloud database company Snowflake’s IPO. The company recorded the biggest software IPO of all time. Overall, Renaissance IPO ETF (IPO - Free Report) has added 27.7% in the past three months.
Auto
Occasional vaccine hopes and the resultant rally in cyclical stocks aided auto stocks. Hot stock Tesla has a good exposure in the fund First Trust NASDAQ Global Auto ETF (CARZ - Free Report) . As a result, it has advanced 24.4% in the past three months (read: Is It Again Time to Shift Focus to Cyclical ETFs?).
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Beyond Clean Energy, 5 Best Global ETF Areas of Q3
The third quarter of 2020 has been all about coronavirus-related developments.Global fiscal and monetary stimulus, coronavirus vaccine hopes, pent-up consumer demand and decent earnings releases kept global markets steady in July and August.
But Wall Street is on its way for the first monthly decline in September since March.Doubts over a faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, reports 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.
Overall, the S&P 500 has gained about 11.2% in the past three months, while the Nasdaq Composite is up about 14.1%. All-world ETF iShares MSCI ACWI ETF (ACWI - Free Report) has added 10.2%. Against this backdrop, let’s take a look at which global ETFs excelled in the July-September period.
Global clean energy ruled the space in the third quarter with Invesco Solar ETF (TAN - Free Report) , Invesco WilderHill Clean Energy ETF (PBW - Free Report) andFirst Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report) adding as much as 67.7%, 46.3% and 40.9%, respectively. However, there are some other areas that also outperformed in the third quarter.
Silver Bullion & Mining
Silver has been on a stellar ride with prices climbing to the highest level in nearly seven years. Increase in investment demand, pick-up in industrial activity due to factory reopening after lockdowns, and investors’ appetite for alternatives to the safe-haven asset gold (which is pretty pricey at the current level) led to the rally (read: Silver ETFs or Gold: Which Metal to Shine More Ahead?).
Unlike gold, silver has considerable presence in the industrial sector. About 50% of the metal’s total demand comes from industrial applications. So, the reopening of global economies is helping silver more than the yellow metal. Aberdeen Standard Physical Silver Shares ETF (SIVR - Free Report) (up 29.8%) and iShares Silver Trust (SLV - Free Report) (up 29.5%) were the toppers in the segment.
FANG+
The rapid adoption of cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, machine learning, digital communication and 5G technology provided a big added advantage to the high-tech space. Activities from home amid lockdown have boosted the note further.
Tesla, which has a considerable weight in MicroSectors FANG+ ETN (FNGS - Free Report) , has soared this year and hence benefited the note. FNGS, which provides exposure to a group of highly-traded growth stocks of next generation technology and tech-enabled companies, is up about 28.7% in the third quarter(read: Tesla's 'Battery Day': Pain or Gain for ETFs Over Long Term?).
Online Retail
The global digital shift that has accelerated e-commerce for everything, ranging from remote working to entertainment and shopping, has driven the sector higher. Amplify Online Retail ETF (IBUY - Free Report) (up 26.5%) and ProShares Online Retail ETF (ONLN - Free Report) (up 23.1%) were the winners in the segment.
IPO
The IPO market is very heathy this year despite the pandemic. We have seen more than 100 IPOs till August. The year started with a surge in biotech IPOs. Some of these newly-public companies are working on coronavirus vaccines and therapeutics and have been very popular with investors (read: Invest in Hottest IPOs With These ETFs).
September was also a smashing month with cloud database company Snowflake’s IPO. The company recorded the biggest software IPO of all time. Overall, Renaissance IPO ETF (IPO - Free Report) has added 27.7% in the past three months.
Auto
Occasional vaccine hopes and the resultant rally in cyclical stocks aided auto stocks. Hot stock Tesla has a good exposure in the fund First Trust NASDAQ Global Auto ETF (CARZ - Free Report) . As a result, it has advanced 24.4% in the past three months (read: Is It Again Time to Shift Focus to Cyclical ETFs?).
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 >>