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6 Hot ETFs That Could be Investors' Darling in February

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After a shaky month, Wall Street started February on a solid footing as the retail trading frenzy for the stocks like GameStop (GME - Free Report) cools down. Additionally, talks over economic stimulus and rounds of solid earnings from big tech players like Amazon (AMZN - Free Report) and Alphabet (GOOGL - Free Report) added to the strength.

Continued optimism over new vaccines, more vaccinations, and easing restrictions are also driving the stock higher. Though U.S. manufacturing activity slowed down slightly last month, measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10 years, strengthening expectations inflation will perk up this year. Further, near-zero interest rates are the major catalysts to the stocks.

Amid such a backdrop, a few ETFs have garnered solid investors’ interest to start a New Year and will continue to be their darlings in the month of love. Below we have highlighted six of them, per

Financial Select Sector SPDR Fund (XLF - Free Report)

The ultra-popular XLF has been the most-popular ETFs so far this year, gathering $4.3 million in capital. The steepening of the yield curve, where long-term yields rise faster than the short term, will expand profits of banks, insurance companies, discount brokerage firms and asset managers, thereby resulting in a spike to this ETF (read: Bank ETFs to Consider on a Steepening Yield Curve).

It seeks to provide exposure to 65 companies in the diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts ("REITs"), consumer finance, and thrifts and mortgage finance industries. It has AUM of $30.5 billion and charges 12 bps in annual fees. The fund trades in an average trading volume of 48.6 million shares and has a Zacks ETF Rank #3 (Hold).

iShares MSCI EAFE Value ETF (EFV - Free Report)

This ETF has accumulated about $3.3 billion in the first few weeks of 2021, bringing its total AUM to $10.6 billion. The coronavirus vaccine will end the pandemic crisis, keeping the global economy recovery intact, and will boost consumer spending and in turn lift value stocks. As corporate earnings improve and yields started to creep up, value investing seems more tempting.

EFV offers exposure to a broad range of companies in Europe, Australia, Asia, and the Far East that are thought to be undervalued by the market. It tracks the MSCI EAFE Value Index, holding 537 stocks in its basket. The product charges 39 bps in annual fees and trades in an average daily volume of 3 million shares. However, it has a Zacks ETF Rank #4 (Sell).

ARK Innovation ETF (ARKK - Free Report)

This ETF continued its last year’s trend with inflows of $3.2 billion in the initial few weeks of 2021 driven by Tesla’s (TSLA - Free Report) smooth ride and its innovative strategy. Innovation has been changing consumer habit and the economy. ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically enabled new product or service that potentially changes the way the world works (read: 5 Top-Performing ARK ETFs Worth Your Attention Now).

ARKK is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to the areas of DNA technologies (Genomic Revolution), industrial innovation in energy, automation and manufacturing (Industrial Innovation), the increased use of shared technology, infrastructure and services (Next Generation Internet), and technologies that make financial services more efficient (Fintech Innovation). In total, the fund holds 54 securities in its basket and charges 75 bps in annual fees. The product has AUM of $24 billion and trades in an average daily volume of 5.9 million shares.

iShares Core MSCI Emerging Markets ETF (IEMG - Free Report)

This fund has pulled in about $3.1 billion in capital in the initial weeks of 2021. The wider rollout of COVID-19 vaccines and Joe Biden’s administration has bolstered confidence in emerging market assets. This is especially true as new government is looking for a bigger fiscal package and infrastructure spending that would lead to increased demand for metals and industrial products from companies in the emerging markets (read: ETFs to Play as Beginning of Biden Era May Prompt Market Rally).

It holds a broad basket of 2,511 stocks of emerging markets with key holdings in information technology, consumer discretionary, financials and communication. China takes the largest share at 37.3% while Taiwan and South Korea make up for at least 14% share each. The product has AUM of $77.7 billion and charges 11 bps in annual fees. It trades in an average daily volume of about 11.8 million shares and has a Zacks ETF Rank #3.

Vanguard Total Stock Market ETF (VTI - Free Report)

This fund has gathered $2.8 billion in capital, bringing its total AUM to $211.3 billion. The wider rollout of vaccines and hopes of more stimulus will continue to lift the stocks higher. VTI provides broad exposure to the stock market by tracking the CRSP US Total Market Index. It holds a large basket of well-diversified 3634 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials. It charges 3 bps in fees per year from investors and trades in volume of 4.2 million shares a day on average. The product has a Zacks ETF Rank #2 (Buy) with a medium risk outlook (read: January ETF Asset Report).

ARK Genomic Revolution Multi-Sector ETF (ARKG - Free Report)

The pandemic has led to a surge in the acceptance of the next-generation of healthcare solutions known as genomics. Additionally, rising government funding, increase in the number of genomics projects, falling sequencing costs, and the entry of new players and start-ups in the genomics field are driving the growth of the market. This actively managed ETF is focused on companies that are likely to benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments, and advancements in genomics into their business. With AUM of $11.6 billion, the fund holds 54 stocks in its basket and has 0.75% in expense ratio. It trades in an average daily volume of 5.2 million shares.

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