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ETFs to Buy on Most-Bullish Wall Street Outlook in Two Decades
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Wall Street has been enjoying smooth trading this year with the major bourses hitting a series of record highs lately thanks to solid corporate earnings and an improving economy.
The Q2 earnings picture has been one of all-round strength, with aggregate total quarterly earnings on track to reach a new all-time record and impressive momentum on the revenue side. Meanwhile, the U.S. economy returned to the pre-pandemic level with GDP rising 6.5% annually in the second quarter, indicating a sustained recovery from the pandemic recession. Rapid vaccinations, business reopenings and trillions of dollars of government stimulus spending are powering consumer spending and resulting in robust growth.
Driven by these factors and lower rates, Wall Street analysts have become more optimistic and bullish on stocks in almost two decades with about 56% of all recommendations on S&P 500 firms listed as buys, the highest since 2002. The U.S. market is strongly shrugging off the concerns about the Delta variant, China’s regulatory crackdown or easing Federal Reserve stimulus. Notably, Goldman Sachs has become the strongest bull on Wall Street and lifted the 2021 target on the S&P 500 by 7% to 4,700 from 4,300 (read: Bet on Top-Ranked Sectors With These ETFs & Stocks).
It is not only the American companies that are getting love from Wall Street analysts, European and Asian companies are gaining affection too. About 52% of the analysts’ recommendation on the Stoxx 600 firms are a 10-year high buy or equivalent, while the rating has risen to 75% — the highest proportion since at least 2010 — for Asian stocks.
Investors seeking to tap the most bullish view could consider the following ETFs. These funds are showing solid strength this year and will likely continue their momentum going forward:
This ETF offers exposure to companies engaged in producing, refining and recycling of rare earth and strategic metals and minerals. It follows the MVIS Global Rare Earth/Strategic Metals Index, holding 20 stocks in its basket. The product has AUM of $1 billion and an average daily volume of 259,000 shares. From a country look, Chinese firms dominate the portfolio with a 47.3% share, closely followed by Australia (22.8%) and the United States (12.4%). The product charges 59 bps in annual fees.
First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) – Up 54.6%
This fund offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 38 stocks in its basket. The fund has amassed $245.2 million in its asset base while charging 60 bps in annual fees. Volume is good with 1.5 million shares exchanged per day on average. The product has a Zacks ETF Rank #2 (Buy) (read: 5 Winning ETF Strategies for the Second Half).
With AUM of $1.3 billion, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 107 securities in its basket with the key holdings in the automotive retail, Internet & direct marketing retail, apparel retail, and specialty stores. The fund charges 35 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) – Up 45.3%
This fund offers exposure to the companies having the highest "value scores" and "momentum scores" by tracking the S&P 600 High Momentum Value Index. It holds a basket of 121 stocks with AUM of $306.8 million and an average daily volume of 139,000 shares. Financials and consumer discretionary take the largest share at 28% and 23.8%, respectively, while industrials round off the next spot with a double-digit exposure. The ETF charges 39 bps in annual fees.
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report) – Up 40.8%
This fund offers exposure to biotech companies directly engaged in the testing and treatments of infectious diseases by tracking the Prime Treatments, Testing and Advancements Index. It holds 77 stocks in its basket and charges 68 bps in annual fees. The ETF has amassed $67.5 million in its asset base and trades in an average daily volume of 13,000 shares (read: Moderna ETFs to Shine Bright on Booster Update, New Study Data).
Amplify Transformational Data Sharing ETF (BLOK - Free Report) – Up 40.6%
This fund is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It has AUM of $1.2 billion in its asset base and trades in an average daily volume of 336,000 shares. The product holds a basket of 44 stocks with American firms dominating about 71.5% of the portfolio, followed by Asia Pacific (20.9%). The ETF has an expense ratio of 0.71%.
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ETFs to Buy on Most-Bullish Wall Street Outlook in Two Decades
Wall Street has been enjoying smooth trading this year with the major bourses hitting a series of record highs lately thanks to solid corporate earnings and an improving economy.
The Q2 earnings picture has been one of all-round strength, with aggregate total quarterly earnings on track to reach a new all-time record and impressive momentum on the revenue side. Meanwhile, the U.S. economy returned to the pre-pandemic level with GDP rising 6.5% annually in the second quarter, indicating a sustained recovery from the pandemic recession. Rapid vaccinations, business reopenings and trillions of dollars of government stimulus spending are powering consumer spending and resulting in robust growth.
Driven by these factors and lower rates, Wall Street analysts have become more optimistic and bullish on stocks in almost two decades with about 56% of all recommendations on S&P 500 firms listed as buys, the highest since 2002. The U.S. market is strongly shrugging off the concerns about the Delta variant, China’s regulatory crackdown or easing Federal Reserve stimulus. Notably, Goldman Sachs has become the strongest bull on Wall Street and lifted the 2021 target on the S&P 500 by 7% to 4,700 from 4,300 (read: Bet on Top-Ranked Sectors With These ETFs & Stocks).
It is not only the American companies that are getting love from Wall Street analysts, European and Asian companies are gaining affection too. About 52% of the analysts’ recommendation on the Stoxx 600 firms are a 10-year high buy or equivalent, while the rating has risen to 75% — the highest proportion since at least 2010 — for Asian stocks.
Investors seeking to tap the most bullish view could consider the following ETFs. These funds are showing solid strength this year and will likely continue their momentum going forward:
VanEck Vectors Rare Earth/Strategic Metals ETF (REMX - Free Report) – Up 71.7%
This ETF offers exposure to companies engaged in producing, refining and recycling of rare earth and strategic metals and minerals. It follows the MVIS Global Rare Earth/Strategic Metals Index, holding 20 stocks in its basket. The product has AUM of $1 billion and an average daily volume of 259,000 shares. From a country look, Chinese firms dominate the portfolio with a 47.3% share, closely followed by Australia (22.8%) and the United States (12.4%). The product charges 59 bps in annual fees.
First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) – Up 54.6%
This fund offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 38 stocks in its basket. The fund has amassed $245.2 million in its asset base while charging 60 bps in annual fees. Volume is good with 1.5 million shares exchanged per day on average. The product has a Zacks ETF Rank #2 (Buy) (read: 5 Winning ETF Strategies for the Second Half).
SPDR S&P Retail ETF (XRT - Free Report) – Up 49.2%
With AUM of $1.3 billion, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 107 securities in its basket with the key holdings in the automotive retail, Internet & direct marketing retail, apparel retail, and specialty stores. The fund charges 35 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) – Up 45.3%
This fund offers exposure to the companies having the highest "value scores" and "momentum scores" by tracking the S&P 600 High Momentum Value Index. It holds a basket of 121 stocks with AUM of $306.8 million and an average daily volume of 139,000 shares. Financials and consumer discretionary take the largest share at 28% and 23.8%, respectively, while industrials round off the next spot with a double-digit exposure. The ETF charges 39 bps in annual fees.
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report) – Up 40.8%
This fund offers exposure to biotech companies directly engaged in the testing and treatments of infectious diseases by tracking the Prime Treatments, Testing and Advancements Index. It holds 77 stocks in its basket and charges 68 bps in annual fees. The ETF has amassed $67.5 million in its asset base and trades in an average daily volume of 13,000 shares (read: Moderna ETFs to Shine Bright on Booster Update, New Study Data).
Amplify Transformational Data Sharing ETF (BLOK - Free Report) – Up 40.6%
This fund is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It has AUM of $1.2 billion in its asset base and trades in an average daily volume of 336,000 shares. The product holds a basket of 44 stocks with American firms dominating about 71.5% of the portfolio, followed by Asia Pacific (20.9%). The ETF has an expense ratio of 0.71%.