The U.S. stock market staged a strong comeback from the pandemic lows thanks to vaccine rollouts, expanded stimulus, healing job market and earnings growth. The combination of factors has resulted in speedy economic recovery and powered activities across all sectors and categories. This has led to increase in consumer spending and confidence.
Americans are now spending on big-ticket items such as vacations and weddings, companies are going on hiring sprees, and the transition to new technologies such as electric vehicles is accelerating. Notably, the S&P 500 saw the second-best start to a year since 1998. It had recovered all of its losses by August 2020 and climbed to new highs. The index is up 38% over the one-year time frame. Though technology powered the rally in the second half of 2020, cyclical sectors have been at the forefront this year (read: 5 Sector ETFs That Crushed the Market in the First Half). The solid gains came defying the bouts of woes and uncertainty over the rise in coronavirus cases, elections, Biden tax hike plan and inflation fears. Below, we discuss a few sector ETFs that have more than doubled in a year. These funds focus exclusively on U.S. equities and deserve the attention of investors seeking a domestic tilt to their portfolio going into the Fourth of July holiday: Invesco S&P SmallCap Energy ETF ( PSCE Quick Quote PSCE - Free Report) – Up 150.2% Energy prices are on a tear on bullish demand and tightening supply. A swift global economic recovery and reopening of economies have spurred energy demand. This fund provides exposure to the U.S. small-cap segment of the energy sector by tracking the S&P Small Cap 600 Capped Energy Index. It holds 33 stocks in its basket with AUM of $213.6 million. The fund trades in an average daily volume of 826,000 shares and charges 29 basis points (bps) in fees per year. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Top Performing ETFs of the First Half). Amplify Seymour Cannabis ETF ( CNBS Quick Quote CNBS - Free Report) – Up 133.2% Cannabis stocks are soaring on a wave of wider legalization as well as the growing adoption of marijuana in more states. The Biden government has the friendliest political environment for the cannabis industries in U.S. history, as it will expedite the legalization of marijuana at the federal level. With AUM of $148.2 million, CNBS is actively managed and invests 80% of its assets in securities of companies with 50% or more of their revenues from the cannabis and hemp ecosystem. The fund holds 33 securities and charges 75 bps in annual fees. It trades in an average daily volume of 98,000 shares. First Trust NASDAQ Clean Edge Green Energy Index Fund ( QCLN Quick Quote QCLN - Free Report) – Up 131.2% Clean energy space has shown strength on climate change, growing global renewable energy consumption, higher spending in clean tech business and President Joe Biden’s push toward going greener. This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $2.8 billion. In total, it holds 53 securities and charges 60 bps in fees per year. It has a Zacks ETF Rank #3 with a High risk outlook. SPDR S&P Retail ETF ( XRT Quick Quote XRT - Free Report) – Up 130.2% With millions of Americans being vaccinated and reopening of the economy, consumers are feeling more optimistic, about the economy, leading to increased spending. With AUM of $965.4 million, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 106 securities in its basket with key holdings in Internet & direct marketing retail, apparel retail, automotive retail and specialty stores. The fund charges 35 bps in annual fees and trades in an average daily volume of 2.4 million shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Here's Why Retail ETFs Are Good Picks Right Now). Invesco S&P SmallCap 600 Revenue ETF ( RWJ Quick Quote RWJ - Free Report) – Up 127.7% As small-cap companies are more domestically tied, these are poised to outperform when the economy improves. These pint-sized stocks generate most of their revenues from the domestic market, making them great choices during an uptrend. RWJ offers exposure to securities of the S&P SmallCap 600 but is weighted by revenues instead of market capitalization. It is home to 601 securities with key holdings in consumer discretionary, industrials and financials. The ETF has AUM of $705.3 million and an expense ratio of 0.39%. It trades in an average daily volume of about 59,000 shares and has a Zacks ETF Rank #3 with a High risk outlook (read: Winning ETFs on Record Run in Stocks Under Biden Presidency). Want key ETF info delivered straight to your inbox?
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