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The Q2 earnings picture is very strong, with broad-based strength across all major sectors and the overall quarterly total on track to reach a new record. Total Q2 earnings from 466 S&P 500 members or 93.9% of the index’s total membership are up 97.8% from the same period last year on 25.8% higher revenues, with 86.9% beating EPS and 86.9% surpassing revenue estimates.
Earnings and revenue growth as well as beat ratios are tracking above the recent historical period. Additionally, earnings estimates have been on a rise for the current quarter and beyond.
Given this, several equity ETFs have impressed with their performance and generated handsome returns over the trailing one-month period though surge in COVID-19 cases with the spread of the Delta variant has suppressed the returns somewhat. Below are five ETFs that have gained from strong earnings results. In addition, we have given a chart for their one-month performance and compared them with the broad market fund (SPY - Free Report) and the broad sector.
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report)
This fund offers exposure to biotech companies directly engaged in the testing and treatments of infectious diseases. It has risen 11.7% in a month driven by strong Q2 earnings growth and Pfizer vaccine approval news. Earnings for 95.4% of the healthcare sector are up 30.2% from the same period last year on 21.1% higher revenues, with 88.5% of the companies beating on EPS and 96.2% topping revenue estimates (read: Tap the Red Hot Biotech Sector With These 2 Leveraged ETFs).
This ETF offers exposure to the companies that stand to benefit from the increased adoption of cybersecurity technology. Total Q2 earnings for 87.6% of the technology sector are up 65.7% from the same period last year on 25.7% higher revenues, with 96.8% of the companies beating on EPS and 93.7% surpassing revenue estimates. The combined beat is 92.1% — the second highest this earnings season. As such, BUG from cybersecurity corner emerged as the biggest winner, gaining 7.6% in a month.
With 100% of the results out, the financial sector’s Q2 earnings rose 146.5% on revenue growth of 10.8%. The earnings growth rate is the fourth highest of all the sectors and the only pure-play broker dealer ETF is the winner. IAI offers exposure to U.S. investment banks, discount brokerages, and stock exchanges. It has returned 6.5% over the past month and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Financial ETFs to Buy on Taper Talks).
Image Source: Zacks Investment Research
First Trust Nasdaq Retail ETF
The fund offers exposure to U.S. companies within the retail industry. Earnings for 93.8% of the retail sector that have reported Q2 results are up 44.6% on revenue growth of 14.3%, with 91.7% beating on EPS and 95.8% surpassing top-line estimates. This is a much stronger showing from the retailers than what we have seen from the group in other recent periods. As a result, FTXD was up 4.2% over the past month and carries a Zacks ETF Rank #3 (Hold) (read: Retail ETFs Mixed on Blockbuster Q2 Earnings Wave).
Image Source: Zacks Investment Research
Invesco S&P 500 Equal Weight Materials ETF
This fund provides equal-weight exposure to the stocks in the materials sector. Total earnings for the basic materials sector are up 277.4% on 47.3% higher revenues. Earnings growth represents the highest and revenues take the fourth highest spot. Given this, RTM has gained 4.1% in the past month and carries a Zacks ETF Rank #2 with a Medium risk outlook.
Image Source: Zacks Investment Research
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5 Must-Watch ETF Charts of Q2 Earnings
The Q2 earnings picture is very strong, with broad-based strength across all major sectors and the overall quarterly total on track to reach a new record. Total Q2 earnings from 466 S&P 500 members or 93.9% of the index’s total membership are up 97.8% from the same period last year on 25.8% higher revenues, with 86.9% beating EPS and 86.9% surpassing revenue estimates.
Earnings and revenue growth as well as beat ratios are tracking above the recent historical period. Additionally, earnings estimates have been on a rise for the current quarter and beyond.
Given this, several equity ETFs have impressed with their performance and generated handsome returns over the trailing one-month period though surge in COVID-19 cases with the spread of the Delta variant has suppressed the returns somewhat. Below are five ETFs that have gained from strong earnings results. In addition, we have given a chart for their one-month performance and compared them with the broad market fund (SPY - Free Report) and the broad sector.
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report)
This fund offers exposure to biotech companies directly engaged in the testing and treatments of infectious diseases. It has risen 11.7% in a month driven by strong Q2 earnings growth and Pfizer vaccine approval news. Earnings for 95.4% of the healthcare sector are up 30.2% from the same period last year on 21.1% higher revenues, with 88.5% of the companies beating on EPS and 96.2% topping revenue estimates (read: Tap the Red Hot Biotech Sector With These 2 Leveraged ETFs).
Image Source: Zacks Investment Research
Global X Cybersecurity ETF (BUG - Free Report)
This ETF offers exposure to the companies that stand to benefit from the increased adoption of cybersecurity technology. Total Q2 earnings for 87.6% of the technology sector are up 65.7% from the same period last year on 25.7% higher revenues, with 96.8% of the companies beating on EPS and 93.7% surpassing revenue estimates. The combined beat is 92.1% — the second highest this earnings season. As such, BUG from cybersecurity corner emerged as the biggest winner, gaining 7.6% in a month.
Image Source: Zacks Investment Research
iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI - Free Report)
With 100% of the results out, the financial sector’s Q2 earnings rose 146.5% on revenue growth of 10.8%. The earnings growth rate is the fourth highest of all the sectors and the only pure-play broker dealer ETF is the winner. IAI offers exposure to U.S. investment banks, discount brokerages, and stock exchanges. It has returned 6.5% over the past month and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Financial ETFs to Buy on Taper Talks).
Image Source: Zacks Investment Research
First Trust Nasdaq Retail ETF
The fund offers exposure to U.S. companies within the retail industry. Earnings for 93.8% of the retail sector that have reported Q2 results are up 44.6% on revenue growth of 14.3%, with 91.7% beating on EPS and 95.8% surpassing top-line estimates. This is a much stronger showing from the retailers than what we have seen from the group in other recent periods. As a result, FTXD was up 4.2% over the past month and carries a Zacks ETF Rank #3 (Hold) (read: Retail ETFs Mixed on Blockbuster Q2 Earnings Wave).
Image Source: Zacks Investment Research
Invesco S&P 500 Equal Weight Materials ETF
This fund provides equal-weight exposure to the stocks in the materials sector. Total earnings for the basic materials sector are up 277.4% on 47.3% higher revenues. Earnings growth represents the highest and revenues take the fourth highest spot. Given this, RTM has gained 4.1% in the past month and carries a Zacks ETF Rank #2 with a Medium risk outlook.
Image Source: Zacks Investment Research