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Sector ETFs to Gain the Most on COVID-19 Vaccine Rollout
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The United States has geared up for the largest-ever immunization with the rollout of the COVID-19 vaccine developed by Pfizer (PFE - Free Report) in collaboration with a German biotechnology company, BioNTech (BNTX - Free Report) for millions of Americans. This is a historic development to counter the worst pandemic in over 100 years.
About 3 million doses of the Pfizer/BioNTech vaccine have been delivered to health workers and nursing home residents for the first shot. The U.S. vaccination program aims to reach 100 million people by April. The FDA authorized the emergency use in people aged 16 and older last week. The United States became the sixth country to approve the Pfizer vaccine after Britain, Bahrain, Canada, Saudi Arabia, and Mexico, and is the second to join Britain in rolling out vaccines (read: After a Historic November, What Awaits ETFs in December?).
The Pfizer vaccine, which needs to be stored at -70 degree Celsius, offers up to 95% protection and is the first COVID-19 vaccine approved by U.S. regulators. Pfizer expects to ship 25 million doses in the remainder of 2020 and up to 100 million in the first quarter of next year.
The vaccination came amid the surge in a number of cases lately. Per the Covid Tracking Project, death has risen sharply since November and the number of people in hospitalization also continued to grow steadily. The seven-day averages of new daily cases reached a record high of 211,494 with 106,656 hospitalizations and 2,427 deaths on Dec 13.
Another company — Moderna (MRNA - Free Report) — is expected to receive FDA approval by the end of this week. The company is expected to ship vaccines next week if approved. Moderna can make 20 million doses available to the U.S. by the end of the year, up to 100 million doses by the end of the first quarter of 2021 and another 100 million by the end of Q2.
Sectors to Gain Big
A vaccine will end the pandemic crisis and set the stage for a speedy recovery thereby boosting demand for several types of products and services in the economy. The increased activity will continue to fuel the stock market to new heights (read: Leisure Stocks & ETFs Rally on Strong Vaccine Hopes).
While the rally will be broad-based, cyclical sectors — consumer discretionary, financials, energy, materials and industrials — tend to gain the most. As these sectors are closely tied to the economy, they expected to outperform when economic growth improves. Most notably, the industries hardest hit by the pandemic such as airlines, hotel and casino operators, travel and entertainment-booking companies are expected to gain the most.
ETFs Set to Surge
Given this, we have presented a bunch of ETFs from these corners of the market that are expected to outperform in the coming weeks:
This fund provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 40 securities and charges investors 60 bps in annual fees. The fund has gathered $2.9 billion in its asset base while seeing solid trading volume of nearly 5.8 million shares a day. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs to Win & Lose From the Surge in Oil Price).
This fund offers a pure-play global exposure to 34 auto stocks by tracking the NASDAQ OMX Global Auto Index. It has a lower level of $49.4 million in AUM and trades in a small average daily trading volume of about 17,000 shares. The product charges 70 bps in fees per year and has a Zacks ETF Rank #3 with High risk outlook.
This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. The fund holds 27 stocks in its basket with travel bookings & reservations companies accounting for 48.6% of assets, followed by 20.1% share in travel advice firms. AWAY has accumulated $59.1 million in its asset base and trades in an average daily volume of 81,000 shares (read: 5 ETFs at the Forefront of the Latest Market Rally).
This ETF provides investors with exposure to companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. It follows the MVIS Global Gaming Index, holding 41 securities in its basket. The product has AUM of $64.4 million and an average daily volume of roughly 25,000 shares. It has a Zacks ETF Rank #3 with a High risk outlook
This ETF offers exposure to global metals and mining stocks (excluding gold and silver) and follows the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index. The fund holds 197 stocks in its basket with AUM of $370.5 million. The United Kingdom, Australia and the United States are the top three countries with 24.7%, 22.2% and 11.1%, respectively. The product trades in volume of 148,000 shares per day on average while charging 39 bps in annual fees.
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Sector ETFs to Gain the Most on COVID-19 Vaccine Rollout
The United States has geared up for the largest-ever immunization with the rollout of the COVID-19 vaccine developed by Pfizer (PFE - Free Report) in collaboration with a German biotechnology company, BioNTech (BNTX - Free Report) for millions of Americans. This is a historic development to counter the worst pandemic in over 100 years.
About 3 million doses of the Pfizer/BioNTech vaccine have been delivered to health workers and nursing home residents for the first shot. The U.S. vaccination program aims to reach 100 million people by April. The FDA authorized the emergency use in people aged 16 and older last week. The United States became the sixth country to approve the Pfizer vaccine after Britain, Bahrain, Canada, Saudi Arabia, and Mexico, and is the second to join Britain in rolling out vaccines (read: After a Historic November, What Awaits ETFs in December?).
The Pfizer vaccine, which needs to be stored at -70 degree Celsius, offers up to 95% protection and is the first COVID-19 vaccine approved by U.S. regulators. Pfizer expects to ship 25 million doses in the remainder of 2020 and up to 100 million in the first quarter of next year.
The vaccination came amid the surge in a number of cases lately. Per the Covid Tracking Project, death has risen sharply since November and the number of people in hospitalization also continued to grow steadily. The seven-day averages of new daily cases reached a record high of 211,494 with 106,656 hospitalizations and 2,427 deaths on Dec 13.
Another company — Moderna (MRNA - Free Report) — is expected to receive FDA approval by the end of this week. The company is expected to ship vaccines next week if approved. Moderna can make 20 million doses available to the U.S. by the end of the year, up to 100 million doses by the end of the first quarter of 2021 and another 100 million by the end of Q2.
Sectors to Gain Big
A vaccine will end the pandemic crisis and set the stage for a speedy recovery thereby boosting demand for several types of products and services in the economy. The increased activity will continue to fuel the stock market to new heights (read: Leisure Stocks & ETFs Rally on Strong Vaccine Hopes).
While the rally will be broad-based, cyclical sectors — consumer discretionary, financials, energy, materials and industrials — tend to gain the most. As these sectors are closely tied to the economy, they expected to outperform when economic growth improves. Most notably, the industries hardest hit by the pandemic such as airlines, hotel and casino operators, travel and entertainment-booking companies are expected to gain the most.
ETFs Set to Surge
Given this, we have presented a bunch of ETFs from these corners of the market that are expected to outperform in the coming weeks:
U.S. Global Jets ETF (JETS - Free Report)
This fund provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 40 securities and charges investors 60 bps in annual fees. The fund has gathered $2.9 billion in its asset base while seeing solid trading volume of nearly 5.8 million shares a day. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs to Win & Lose From the Surge in Oil Price).
First Trust NASDAQ Global Auto ETF (CARZ - Free Report)
This fund offers a pure-play global exposure to 34 auto stocks by tracking the NASDAQ OMX Global Auto Index. It has a lower level of $49.4 million in AUM and trades in a small average daily trading volume of about 17,000 shares. The product charges 70 bps in fees per year and has a Zacks ETF Rank #3 with High risk outlook.
ETFMG Travel Tech ETF (AWAY - Free Report)
This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. The fund holds 27 stocks in its basket with travel bookings & reservations companies accounting for 48.6% of assets, followed by 20.1% share in travel advice firms. AWAY has accumulated $59.1 million in its asset base and trades in an average daily volume of 81,000 shares (read: 5 ETFs at the Forefront of the Latest Market Rally).
VanEck Vectors Gaming ETF (BJK - Free Report)
This ETF provides investors with exposure to companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. It follows the MVIS Global Gaming Index, holding 41 securities in its basket. The product has AUM of $64.4 million and an average daily volume of roughly 25,000 shares. It has a Zacks ETF Rank #3 with a High risk outlook
iShares MSCI Global Metals & Mining Producers ETF (PICK - Free Report)
This ETF offers exposure to global metals and mining stocks (excluding gold and silver) and follows the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index. The fund holds 197 stocks in its basket with AUM of $370.5 million. The United Kingdom, Australia and the United States are the top three countries with 24.7%, 22.2% and 11.1%, respectively. The product trades in volume of 148,000 shares per day on average while charging 39 bps in annual fees.
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 >>