Last week was downbeat for Wall Street mainly only the rate hike speculation. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 lost about 1.9%, 3.5%, 0.3% and 4.2% last week.
Though the Fed held interest rates steady at a near-zero level in its latest meeting, the forecast revealed that 13 members of the Federal Open Market Committee believe the Fed will hike rates in 2023 and the majority expect at least two hikes that year,
per a CNBC article.
Seven of the 18 members see the Fed increasing rates as early as 2022.The Fed also hiked its inflation forecast for the year. The central bank now expects inflation to jump to 3.4% this year, higher than its previous forecast of 2.4%. PCE inflation expectation has gone up to 2.1% for 2022 from 2% projected in March and to 2.2% for 2022 (from 2.1%) (read:
Fed Rate Hike in the Cards? ETFs to Buy).
Economic data have been overwhelming. Per the Fed’s recently-released data,
total industrial production rose 0.8% in May. Going on, there was a 0.9%, 1.2% and 0.2% rise, respectively, in manufacturing output, mining and utilities production (read: ETFs to Gain as US Industrial Output Rises in May).
Against this backdrop, below we highlight a few ETFs that have won last week.
Simplify Volt Cloud and Cybersecurity Disruption ( VCLO Quick Quote VCLO - Free Report) – Up 7.3%
Investors should note that tech ETFs fared better last week despite a hawkish signal from the Fed. The tech-heavy Nasdaq was the best-performer among the big U.S. equity indexes. The sector outlook remains solid given the global digital shift even in the post-COVID world with the acceleration in e-commerce for everything, ranging from remote working to entertainment and shopping. This has resulted in great returns in VCLO.
The ETF seeks to concentrate in those few disruptive companies poised to dominate the new era of the cloud and then enhance the concentrated exposures with options. The fund’s expense ratio is 1.02% (read:
Tech ETFs Hit New Peaks Despite Hawkish Fed). Arrow DWA Country Rotation ETF ( DWCR Quick Quote DWCR - Free Report) – Up 5.3%
The underlying Dorsey Wright Country and Stock Momentum Index selects at least ten countries with the highest relative strength among the universe of 41 foreign countries on a quarterly basis. The fund’s expense ratio is 1.16%.
Wisdomtree Cloud Computing Fund ( WCLD Quick Quote WCLD - Free Report) – Up 5.3%
The underlying BVP Nasdaq Emerging Cloud Index is an equally weighted Index, designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers. It charges 45 bps in fees (read:
Franklin Disruptive Commerce ETF ( BUYZ Quick Quote BUYZ - Free Report) – Up 3.7%
This ETF is active and does not track a benchmark. The ETF seeks capital appreciation by investing in innovative companies benefitting from transformation in the e-commerce space. It charges 50 bps in fees.
Kraneshares Cicc China 5G and Semiconductor ETF ( KFVG Quick Quote KFVG - Free Report) – Up 3.7%
The underlying CICC China 5G and Semiconductor Leaders Index tracks the performance of companies engaged in the 5G and semiconductor related businesses, including 5G equipment, semiconductors, electronic components and big data centers. The fund charges 65 bps in fees.
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