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Top-Ranked Industrials ETFs Rise More Than 20% YTD
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The industrial sector, which faced disruption in global supply chains and factory closedowns, is rebounding on gradual recovery from the coronavirus-led slowdown. Notably, the S&P 500 Industrials index is up 18.4% so far in 2021 in comparison to the S&P 500’s 12% rise. The accelerated pace of coronavirus vaccine rollouts and addition of fiscal stimulus are driving demand and economic activities in the sector.
Also, the latest ISM Manufacturing PMI data for the United States is painting a rosy picture for the sector. The ISM Manufacturing PMI read 61.2 in May against 60.7 in April. Moreover, manufacturing activity rose for the 12th straight month. The New Orders Index rose to 67.0 in May from 64.3 in April. Meanwhile, the Production Index declined to 58.5 in May from 62.5 in April. The Backlog of Orders Index was at 70.6%, up 2.4% from April’s reading of 68.2%. Also, the New Export Orders Index jumped 0.5% to 55.4% from 54.9% in April.
Factors Driving Optimism
The U.S. economy seems to be on the path of recovery from the pandemic-led slowdown. Markedly, accelerated vaccine distribution, strong fiscal stimulus support and the reopening of non-essential businesses are expected to expedite the economic recovery pace. Notably, the central bank has raised its economic growth outlook considering the vaccine and stimulus optimism and even expects higher inflation this year.
Buoying optimism, President Joe Biden recently announced his latest vaccination goals. He aims at administering at least a single dose of coronavirus vaccine to 70% U.S. adults along with getting 160 million adults completely immunized by Jul 4, according to a CNBC report.
In another encouraging development, Moderna (MRNA) announced an impressive update relating to mRNA-1273. The company has announced that the Phase 2/3 study of its COVID-19 vaccine (mRNA-1273) in adolescents has met its primary immunogenicity endpoint. Markedly, there was no record of coronavirus cases among participants who were administered both the mRNA-1273 doses.
According to the company, a 93% vaccine efficacy was recorded in seronegative participants beginning 14 days after the first dose applying the secondary CDC case definition of COVID-19, which tested for milder disease.
The latest U.S. consumer confidence data looks decent as the metric has remained steady in May after registering gains in April. The Conference Board's measure of consumer confidence index stands at 117.2 for May, mostly flat in comparison with April’s reading of 117.5.
Lynn Franco, Senior Director of Economic Indicators at The Conference Board, has also reportedly said, “Overall, consumers remain optimistic, and confidence should remain resilient in the short term, as vaccination rates climb, COVID-19 cases decline further, and the economy fully reopens."
Industrial ETFs Up More Than 20% YTD
Against this backdrop, let’s take a look at some industrial ETFs that have gained more than 20% in 2021:
First Trust Industrials/Producer Durables AlphaDEX Fund (FXR - Free Report) — 22.8%
The investment objective of the fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the StrataQuant Industrials Index. It has AUM of $1.80 billion and charges fees of 64 basis points (bps). The fund has a Zacks ETF Rank #2 (Buy), with a Medium-Risk outlook (read: Buy 5 Top-Ranked High-Beta ETFs That Still Offer Value).
The Industrial Select Sector SPDR Fund (XLI - Free Report) — 22.5%
The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Industrial Select Sector Index. It has AUM of $21.01 billion and charges fees of 12 bps. The fund has a Zacks ETF Rank #1 (Strong Buy), with a Medium-Risk outlook (read: ETFs to Play Reopening Trade as New US COVID-19 Cases Drop).
The fund seeks to track the performance of the MSCI US Investable Market Industrials 25/50 Index. It has AUM of $5.63 billion and charges fees of 10 bps. The fund has a Zacks ETF Rank #1, with a Medium-Risk outlook (read: 5 Top-Ranked ETFs to Bet on After an Encouraging May).
John Hancock Multifactor Industrials ETF — 21.4%
The fund seeks to pursue results that closely correspond, before fees and expenses, to the performance of the John Hancock Dimensional Industrials Index. It has AUM of $56.7 million and charges fees of 40 bps. The fund has a Zacks ETF Rank #2.
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Top-Ranked Industrials ETFs Rise More Than 20% YTD
The industrial sector, which faced disruption in global supply chains and factory closedowns, is rebounding on gradual recovery from the coronavirus-led slowdown. Notably, the S&P 500 Industrials index is up 18.4% so far in 2021 in comparison to the S&P 500’s 12% rise. The accelerated pace of coronavirus vaccine rollouts and addition of fiscal stimulus are driving demand and economic activities in the sector.
Also, the latest ISM Manufacturing PMI data for the United States is painting a rosy picture for the sector. The ISM Manufacturing PMI read 61.2 in May against 60.7 in April. Moreover, manufacturing activity rose for the 12th straight month. The New Orders Index rose to 67.0 in May from 64.3 in April. Meanwhile, the Production Index declined to 58.5 in May from 62.5 in April. The Backlog of Orders Index was at 70.6%, up 2.4% from April’s reading of 68.2%. Also, the New Export Orders Index jumped 0.5% to 55.4% from 54.9% in April.
Factors Driving Optimism
The U.S. economy seems to be on the path of recovery from the pandemic-led slowdown. Markedly, accelerated vaccine distribution, strong fiscal stimulus support and the reopening of non-essential businesses are expected to expedite the economic recovery pace. Notably, the central bank has raised its economic growth outlook considering the vaccine and stimulus optimism and even expects higher inflation this year.
Buoying optimism, President Joe Biden recently announced his latest vaccination goals. He aims at administering at least a single dose of coronavirus vaccine to 70% U.S. adults along with getting 160 million adults completely immunized by Jul 4, according to a CNBC report.
In another encouraging development, Moderna (MRNA) announced an impressive update relating to mRNA-1273. The company has announced that the Phase 2/3 study of its COVID-19 vaccine (mRNA-1273) in adolescents has met its primary immunogenicity endpoint. Markedly, there was no record of coronavirus cases among participants who were administered both the mRNA-1273 doses.
According to the company, a 93% vaccine efficacy was recorded in seronegative participants beginning 14 days after the first dose applying the secondary CDC case definition of COVID-19, which tested for milder disease.
The latest U.S. consumer confidence data looks decent as the metric has remained steady in May after registering gains in April. The Conference Board's measure of consumer confidence index stands at 117.2 for May, mostly flat in comparison with April’s reading of 117.5.
Lynn Franco, Senior Director of Economic Indicators at The Conference Board, has also reportedly said, “Overall, consumers remain optimistic, and confidence should remain resilient in the short term, as vaccination rates climb, COVID-19 cases decline further, and the economy fully reopens."
Industrial ETFs Up More Than 20% YTD
Against this backdrop, let’s take a look at some industrial ETFs that have gained more than 20% in 2021:
First Trust Industrials/Producer Durables AlphaDEX Fund (FXR - Free Report) — 22.8%
The investment objective of the fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the StrataQuant Industrials Index. It has AUM of $1.80 billion and charges fees of 64 basis points (bps). The fund has a Zacks ETF Rank #2 (Buy), with a Medium-Risk outlook (read: Buy 5 Top-Ranked High-Beta ETFs That Still Offer Value).
The Industrial Select Sector SPDR Fund (XLI - Free Report) — 22.5%
The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Industrial Select Sector Index. It has AUM of $21.01 billion and charges fees of 12 bps. The fund has a Zacks ETF Rank #1 (Strong Buy), with a Medium-Risk outlook (read: ETFs to Play Reopening Trade as New US COVID-19 Cases Drop).
Vanguard Industrials ETF (VIS - Free Report) — 21.9%
The fund seeks to track the performance of the MSCI US Investable Market Industrials 25/50 Index. It has AUM of $5.63 billion and charges fees of 10 bps. The fund has a Zacks ETF Rank #1, with a Medium-Risk outlook (read: 5 Top-Ranked ETFs to Bet on After an Encouraging May).
John Hancock Multifactor Industrials ETF — 21.4%
The fund seeks to pursue results that closely correspond, before fees and expenses, to the performance of the John Hancock Dimensional Industrials Index. It has AUM of $56.7 million and charges fees of 40 bps. The fund has a Zacks ETF Rank #2.
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 >>