We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Sector ETFs That Survived Market Turmoil in June
Read MoreHide Full Article
June has proved to be a brutal month for the stock market. The S&P 500 Index entered a bear market in mid-June but retreated last week on bargain hunting. In fact, the benchmark jumped more than 6% last week, its first weekly advance since late May and its second-best week of 2022 to date. This has made up for some losses for the month.
The S&P 500 is down more than 7% in June. Despite the broad indices’ losses, a few sector ETFs survived the turmoil. These include Global X Solar ETF (RAYS - Free Report) , Volt Crypto Industry Revolution & Tech ETF , Virtus LifeSci Biotech Clinical Trials ETF (BBC - Free Report) and Global X Lithium & Battery Tech ETF (LIT - Free Report) .
The combination of factors such as decades-high inflation, the Russia-Ukraine conflict and Fed’s aggressive tightening policy are weighing heavily on investors’ sentiment. Investors have increasingly been concerned that the economy will plunge into recession (read: 5 Undervalued ETFs to Buy for Second Half 2022).
The sell-off in the S&P 500 Index aggravated when the Fed raised interest rates by 75 bps in its latest FOMC meeting — the biggest increase since 1994 — and signaled continued tightening ahead, which could further weigh on stocks. Fed Chair Jerome Powell said that another hike of 50 or 75 bps at the next meeting in July is likely. An increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans that will likely cut consumer spending and hurt economic growth.
Additionally, rounds of data suggest a slowdown in economic activity in the key sectors. Mortgage rates reached their highest levels in more than 13 years, while retail sales registered a bigger-than-expected drop in May as record gasoline prices prompted households to cut back on spending. As the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession. The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are curtailing growth.
Global X Solar ETF seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry. This includes companies involved in solar power production; the integration of solar into energy systems; and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source.
Global X Solar ETF has accumulated $7.6 million in its asset base and charges 50 bps in annual fees.
Volt Crypto Industry Revolution & Tech ETF – Up 9.2%
Volt Crypto Industry Revolution & Tech ETF is the first ETF offering exposure to Bitcoin companies and its supporting infrastructure. It employs a call options overlay designed to boost performance in extreme run-ups of companies with high bitcoin-correlation. BTCR is actively managed and looks to indicators such as the stock-to-flow model to adjust its level of Bitcoin-related investments (read: 5 ETFs Surge As S&P 500 Slips to Bear Market).
Volt Crypto Industry Revolution & Tech ETF has accumulated $2.8 million in its asset base and charges 85 bps in annual fees.
Virtus LifeSci Biotech Clinical Trials ETF offers exposure to companies with promising drugs in clinical human trials that have not yet been approved by the FDA or gone into production. Virtus LifeSci Biotech Clinical Trials ETF follows the LifeSci Biotechnology Clinical Trials Index and holds 196 securities in its basket.
Virtus LifeSci Biotech Clinical Trials ETF has amassed $15.7 million in its asset base and charges 79 bps in fees per year from its investors. It carries a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs Winners of S&P 500's Second Best Week in 2022).
Global X Lithium & Battery Tech ETF (LIT - Free Report) – Up 1.3%
Global X Lithium & Battery Tech ETF invests in companies throughout the lithium cycle, including mining, refinement and battery production, cutting across the traditional sectors and geographic definitions by tracking the Solactive Global Lithium Index. It holds 40 securities in its basket, with the Chinese firms taking the largest share at 39.5%, followed by the United States (20.8%) and South Korea (12%).
Global X Lithium & Battery Tech ETF charges investors 75 bps in annual fees and has amassed $4.7 billion in AUM.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
4 Sector ETFs That Survived Market Turmoil in June
June has proved to be a brutal month for the stock market. The S&P 500 Index entered a bear market in mid-June but retreated last week on bargain hunting. In fact, the benchmark jumped more than 6% last week, its first weekly advance since late May and its second-best week of 2022 to date. This has made up for some losses for the month.
The S&P 500 is down more than 7% in June. Despite the broad indices’ losses, a few sector ETFs survived the turmoil. These include Global X Solar ETF (RAYS - Free Report) , Volt Crypto Industry Revolution & Tech ETF , Virtus LifeSci Biotech Clinical Trials ETF (BBC - Free Report) and Global X Lithium & Battery Tech ETF (LIT - Free Report) .
The combination of factors such as decades-high inflation, the Russia-Ukraine conflict and Fed’s aggressive tightening policy are weighing heavily on investors’ sentiment. Investors have increasingly been concerned that the economy will plunge into recession (read: 5 Undervalued ETFs to Buy for Second Half 2022).
The sell-off in the S&P 500 Index aggravated when the Fed raised interest rates by 75 bps in its latest FOMC meeting — the biggest increase since 1994 — and signaled continued tightening ahead, which could further weigh on stocks. Fed Chair Jerome Powell said that another hike of 50 or 75 bps at the next meeting in July is likely. An increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans that will likely cut consumer spending and hurt economic growth.
Additionally, rounds of data suggest a slowdown in economic activity in the key sectors. Mortgage rates reached their highest levels in more than 13 years, while retail sales registered a bigger-than-expected drop in May as record gasoline prices prompted households to cut back on spending. As the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession. The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are curtailing growth.
Global X Solar ETF (RAYS - Free Report) – Up 10.3%
Global X Solar ETF seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry. This includes companies involved in solar power production; the integration of solar into energy systems; and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source.
Global X Solar ETF has accumulated $7.6 million in its asset base and charges 50 bps in annual fees.
Volt Crypto Industry Revolution & Tech ETF – Up 9.2%
Volt Crypto Industry Revolution & Tech ETF is the first ETF offering exposure to Bitcoin companies and its supporting infrastructure. It employs a call options overlay designed to boost performance in extreme run-ups of companies with high bitcoin-correlation. BTCR is actively managed and looks to indicators such as the stock-to-flow model to adjust its level of Bitcoin-related investments (read: 5 ETFs Surge As S&P 500 Slips to Bear Market).
Volt Crypto Industry Revolution & Tech ETF has accumulated $2.8 million in its asset base and charges 85 bps in annual fees.
Virtus LifeSci Biotech Clinical Trials ETF (BBC - Free Report) – Up 8.9%
Virtus LifeSci Biotech Clinical Trials ETF offers exposure to companies with promising drugs in clinical human trials that have not yet been approved by the FDA or gone into production. Virtus LifeSci Biotech Clinical Trials ETF follows the LifeSci Biotechnology Clinical Trials Index and holds 196 securities in its basket.
Virtus LifeSci Biotech Clinical Trials ETF has amassed $15.7 million in its asset base and charges 79 bps in fees per year from its investors. It carries a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: ETFs Winners of S&P 500's Second Best Week in 2022).
Global X Lithium & Battery Tech ETF (LIT - Free Report) – Up 1.3%
Global X Lithium & Battery Tech ETF invests in companies throughout the lithium cycle, including mining, refinement and battery production, cutting across the traditional sectors and geographic definitions by tracking the Solactive Global Lithium Index. It holds 40 securities in its basket, with the Chinese firms taking the largest share at 39.5%, followed by the United States (20.8%) and South Korea (12%).
Global X Lithium & Battery Tech ETF charges investors 75 bps in annual fees and has amassed $4.7 billion in AUM.