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After a downbeat September, October started on a volatile note. Coronavirus cases, President Trump detecting virus positive and the uncertainty over the looming election have kept the market volatile to start the month.
Historically, October has a moderate reputation in the stock market. According to moneychimp.com, a consensus carried out from 1950 to 2020 has revealed that October ended up offering positive returns in 43 years and negative returns in 27 years, with an average return of positive 0.68%.
This year is unlikely to be an exception. While jitters will emanate from the U.S. presidential election, and global banking sector woes amid news of money laundering, strength may be added by President Trump’s fast recovering health, U.S. stimulus talks, strong vaccine hopes and the upcoming holiday season.
Against such a backdrop, let’s take a look at which ETFs that could be good picks in October.
Whatever the market movement, tech stocks are in great shape, showering gains irrespective of market conditions. Within the pack, Internet stocks deserve special mention. Unparalleled growth of high-speed mobile Internet traffic, still-untapped opportunities in emerging markets especially via the adoption of smartphones and tablets, 5g revolution and a sharp rise in online shopping should translate into the outperformance of Internet ETFs.
Only 58% say they will celebrate Halloween this year, per National Retail Federation’s survey, as quoted on Business Insider.So, chances are high that much of the shopping will be done at discount stores. Dollar General (G) and Wal-Mart (WMT) have considerable weight in the fund RTH.
The IPO market probably had the busiest third quarter since the dot-com years. The trend should be upbeat in the fourth quarter too. Per the latest news, U.S. bioplastics firm Danimer Scientific has agreed to go public by merging with blank-check acquisition company Live Oak Acquisition Corp., in a deal that values the former at around $890 million, according to people familiar with the matter, per Reuters. Home rental company Airbnb is aiming to raise around $3 billion in its upcoming initial public offering.
The space is lately hitting headlines for several reasons. Big corporations are making or promising investments in achieving the most-coveted carbon neutral status. Like most Democratic candidates, Joe Biden has also been strongly campaigning for his clean energy and infrastructural plans. He intends to inject trillions of dollars into green energy for over four years to build solar panels, charging stations, etc. This is making funds like PBW attractive investment options.
The low-rate environment is great for the fixed-income market. Moreover, muni bonds are known for yielding higher than treasuries. Plus, Biden is supporting the idea of tax hike. With the Democratic candidate having higher chances of winning, muni bonds may see great days ahead as these bonds are exempt from federal taxes, and most state and local taxes.
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5 ETFs to Play in October
After a downbeat September, October started on a volatile note. Coronavirus cases, President Trump detecting virus positive and the uncertainty over the looming election have kept the market volatile to start the month.
Historically, October has a moderate reputation in the stock market. According to moneychimp.com, a consensus carried out from 1950 to 2020 has revealed that October ended up offering positive returns in 43 years and negative returns in 27 years, with an average return of positive 0.68%.
This year is unlikely to be an exception. While jitters will emanate from the U.S. presidential election, and global banking sector woes amid news of money laundering, strength may be added by President Trump’s fast recovering health, U.S. stimulus talks, strong vaccine hopes and the upcoming holiday season.
Against such a backdrop, let’s take a look at which ETFs that could be good picks in October.
Invesco NASDAQ Internet ETF (PNQI - Free Report)
Whatever the market movement, tech stocks are in great shape, showering gains irrespective of market conditions. Within the pack, Internet stocks deserve special mention. Unparalleled growth of high-speed mobile Internet traffic, still-untapped opportunities in emerging markets especially via the adoption of smartphones and tablets, 5g revolution and a sharp rise in online shopping should translate into the outperformance of Internet ETFs.
VanEck Vectors Retail ETF (RTH - Free Report)
Only 58% say they will celebrate Halloween this year, per National Retail Federation’s survey, as quoted on Business Insider.So, chances are high that much of the shopping will be done at discount stores. Dollar General (G) and Wal-Mart (WMT) have considerable weight in the fund RTH.
Renaissance IPO ETF (IPO - Free Report)
The IPO market probably had the busiest third quarter since the dot-com years. The trend should be upbeat in the fourth quarter too. Per the latest news, U.S. bioplastics firm Danimer Scientific has agreed to go public by merging with blank-check acquisition company Live Oak Acquisition Corp., in a deal that values the former at around $890 million, according to people familiar with the matter, per Reuters. Home rental company Airbnb is aiming to raise around $3 billion in its upcoming initial public offering.
SPDR Kensho Clean Power ETF (CNRG - Free Report)
The space is lately hitting headlines for several reasons. Big corporations are making or promising investments in achieving the most-coveted carbon neutral status. Like most Democratic candidates, Joe Biden has also been strongly campaigning for his clean energy and infrastructural plans. He intends to inject trillions of dollars into green energy for over four years to build solar panels, charging stations, etc. This is making funds like PBW attractive investment options.
iShares National Muni Bond ETF (MUB - Free Report)
The low-rate environment is great for the fixed-income market. Moreover, muni bonds are known for yielding higher than treasuries. Plus, Biden is supporting the idea of tax hike. With the Democratic candidate having higher chances of winning, muni bonds may see great days ahead as these bonds are exempt from federal taxes, and most state and local taxes.
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 >>