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Top ETF Areas of Last Week

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Last week was marked with the U.S. Presidential Inauguration, Fed’s dovish comments, hopes of fatter fiscal stimulus in the United States, China’s upbeat GDP data and the ECB’s promise to continue the accommodative approach. Meanwhile, COVID-19 vaccination is in full swing.

Overall, global markets were charged up with the S&P 500, the Dow Jones and the Nasdaq Composite gaining about 1.9%, 0.5% and 3.2%, respectively. All-world ETF iShares MSCI ACWI ETF (ACWI - Free Report) has added 1.1% last week.

The markets probably rallied because Biden started his term by signing a number of executive orders to counter the ill effects of the COVID-19 pandemic, empower environmental protection initiatives and roll back many of the Trump administration’s immigration policies.

Against this backdrop, below we highlight a few ETF areas that gained substantially last week.

China   

KraneShares Trust KS CSI China Internet ETF ((KWEB - Free Report) ) – Up 10.9%

KraneShares MSCI All China Health Care Index ETF (KURE - Free Report) ) – Up 9.8%

China Small-Cap iShares MSCI ETF (ECNS) – Up 9.2%

China Technology Invesco ETF (CQQQ) – Up 8.6%

China’s GDP grew 6.5% in the fourth quarter of 2020, after 4.9% growth in the third quarter. The metric also beat economists’ forecast of 6.1% growth, according to a Reuters' poll. Notably, the world’s second-largest economy recorded growth of 2.3% in 2020. No wonder, Chinese equities will stage a rally in such a situation. China’s Internet stocks were the top-most winners in the space (read: China ETFs Ruling 52-Week High Chart on Impressive GDP Data).

Homebuilding

U.S. Home Construction iShares ETF ((ITB - Free Report) ) – Up 9.5%

U.S. home sales unexpectedly increased in December, despite surging home prices amid record-low inventory levels.The National Association of Realtors said that existing home sales increased 0.7% to a seasonally adjusted annual rate of 6.76 million units last month. The data topped economists’ forecast of a sales decline of 2.0% to a rate of 6.55 million units in December. In any case, homebuilding sector has been in nice shape even amid the pandemic (read: 6 Reasons Why Homebuilding ETFs Are a Strong Buy).   

Rare Earth

Rare Earth/Strategic Metals Vaneck ETF ((REMX - Free Report) ) – Up 8.7%

Rare Earths include a group of 17 minerals that are used heavily in various applications, from consumer electronics to military equipment. So, rare earth metals got a boost from the expectation that economic recovery and beefed-up fiscal stimulus under Biden presidency will drive the demand for these metals. The underlying MVIS Global Rare Earth/Strategic Metals Index tracks the overall performance of companies involved in producing, refining and recycling of rare earth, and strategic metals and minerals (read: 4 Best Investing Areas of Q4 & Their Top ETFs).

Cash Cow           

Pacer Cash Cows Fund of Funds ETF (HERD - Free Report) ) – Up 7.8%

Since virus threats are still alive with the new variant of it flaring up tensions (which in fact can cause double-dip recession in the Euro zone), cash-rich companies act as safer bets. No wonder, cash cows fared better last week.

The underlying Pacer Cash Cows Fund of Funds Index uses an objective, rules-based approach to construct a portfolio that is composed of the ETFs that seek to provide exposure to companies with high free cash flow yields.

Clean Energy

SPDR Kensho Clean Power ETF (CNRG - Free Report) ) – Up 6.7%

Climate change is one of the top priorities of the Biden administration. Biden already canceled Keystone XL Pipeline and rejoined Paris Climate Agreement. Notably, Paris Climate Agreement is the international treaty designed to counter disastrous global warming. Biden ordered federal agencies to start reviewing and reestablishing more than 100 environmental regulations that were weakened or canceled by Donald Trump. No wonder, clean energy ETFs will start soaring from such a move.

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