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Materials ETF (VAW) Hits New 52-Week High

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For investors seeking momentum, Vanguard Materials ETF (VAW - Free Report) is probably on radar. The fund just hit a 52-week high and is up 80% from its 52-week low of $81.10 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.

VAW in Focus

This fund targets the material sector of the broad U.S. equity market with key holdings in specialty chemicals and industrial gases. It charges 10 basis points in annual fees (see: all the Materials ETFs here).

Why the Move?

The materials sector of the broad U.S. stock market has been an area to watch lately given the optimism surrounding the divided government. Biden has likely won the race to White House per various media sources while fight to Senate is ongoing with Georgia’s run-off elections scheduled on Jan 5. A potential Biden presidency would be supportive of the equity markets and an economy with more stimulus package, which will result in the outperformance of the cyclical sectors, including materials.

More Gains Ahead?

Currently, VAW has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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