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5 Top ETF Areas in Green Last Week in a Red Market

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Wall Street crashed last week with the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 losing about 2.5%, 1.8%, 4.9% and 2.4%, respectively. Rising rate worries led to this underperformance. The slide in markets was mainly triggered by the pain in growth stocks that were pandemic winners aided by low rates in 2020. The tech-heavy Nasdaq recorded its worst slump since October.

The investing scenario changed totally as we entered 2021 on vaccine distribution and hopes of a hefty fiscal stimulus in the United States under the Biden administration. This boosted reflationary trade, pushing long-term treasury yields higher and favoring value stocks over growth ones.

The reason was the sudden jump in benchmark U.S. treasury yield, which topped 1.6% lately, marking the highest level since February 2020. No wonder, growth-oriented tech stocks — so far aided by low rates and carrying overvaluation concerns — started being dumped heavily by investors.  

Against this backdrop, below we highlight a few ETF areas that gained the most last week despite such a freefall in the market.

Energy

Oil prices have been on the rise lately on a cold blast in the United States.A cold snap shut wells and refineries in Texas, the biggest crude producing state in the United States in the last-to-last week. The space is gradually returning to normalcy.

Stimulus hopes and a higher expected growth rate also boosted hopes for a rebound in the crude production in the United States, which in turn has benefited the oil companies. Oil Services Vaneck ETF (OIH - Free Report) , Unconventional Oil & Gas Vaneck ETF (FRAK - Free Report) , Dynamic Energy Exploration & Production Invesco (PXE - Free Report) and S&P Oil & Gas Eqpt & Services SPDR (XES - Free Report) also gained about 9.7%, 6.4%, 6.2% and 6.1%, respectively.

China Real Estate

Property firms in Mainland China and Hong Kong saw a surge last week. Property shares jumped last week after some research notes by local brokerages indicated that the valuation of the real estate sector was at a historically low level, as quoted on Economic Times. Global-X MSCI China Real Estate ETF (CHIR - Free Report) thus added about 6.40%.

Coffee

Coffee prices gained last week on brightening economic outlook. iPatha.B Coffee Subindex TR ETN (JO - Free Report) , which follows the Bloomberg Coffee Subindex Total Return and reflects the returns that are potentially available through an unleveraged investment in the futures contracts on coffee, gained about 5.4% last week.

Leisure

Hopes for proper economic reopening and a considerable rebound in global growth have facilitated a rally in leisure and transportation stocks.  US Global Jets ETF (JETS - Free Report) was up 5.2% last week while Dynamic Leisure and Entertainment Invesco ETF (PEJ - Free Report) gained 3.5%. Gaming ETF Vaneck (BJK), which offers exposure to a host of casino stocks,also advanced 2.1%.

Value Stocks

Small-cap stocks added gains on domestic economic strength. Plus, the recent emergence of the value corner of the investing spectrum especially offered gains on S&P Smallcap Value ETF SPDR (SLYV) and S&P Small-Cap 600 Value iShares ETF (IJS). Each fund added about 1.8% last week (read: Value Outshines Growth: 5 ETF Winners).

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