It’s time for Thanksgiving and Americans are ready for a plate stuffed with food and carts full of shopping. The celebration of bounty and gratitude is in full swing in the investment world as well. Let’s explore it by screening ETFs that have rewarded investors this year.
A few corners have crushed the broader market in the year-to-date period. These ETFs — Invesco Dynamic Energy Exploration & Production ETF ( PXE Quick Quote PXE - Free Report) , SPDR S&P North American Natural Resources ETF ( NANR Quick Quote NANR - Free Report) , SPDR S&P Metals & Mining ETF ( XME Quick Quote XME - Free Report) , VanEck Vectors Steel ETF ( SLX Quick Quote SLX - Free Report) and iShares U.S. Insurance ETF ( IAK Quick Quote IAK - Free Report) — from different zones have been the star performers so far this year and could be better plays in the coming months. These ETFs deserve special thanks and attention going into the New Year too (see: all the Categories ETF here). How is the Stock Market Faring?
So far, 2022 has proven to be a dismal year, with all three major indices in deep red. The S&P 500 Index and Dow Jones Industrial Average are down 16% and 6.2%, respectively, while the tech-heavy Nasdaq Composite Index has tumbled the most by 28.6%.
Russia’s invasion of Ukraine, persistently high inflation, aggressive rate hikes by the Fed and global growth concerns have roiled the stock market badly. The central bank has lifted interest rates six times this year with four consecutive rate hikes of 75 bps. The rate hike brings the benchmark interest rate, the federal funds rate, to 3.75-4%, its highest level since 2008. The increase in interest rates will make borrowing expensive, driving up the cost of buying a new car or house or pushing up the cost of carrying credit card debt and thus slowing down economic growth. Additionally, a resurgence of COVID-19 cases in China has slowed down economic activities across the country, thereby weighing on global growth. However, the stock market got a boost this month from fresh hopes of smaller interest rate hikes, following the easing of consumer prices. Annual inflation slipped below 8% for the first time in eight months. The consumer price index rose 7.7% annually in October after rising 8.2% at the end of September, while the core consumer price index, which strips out volatile components such as food and energy prices, climbed 6.3% year over year, down from 6.6% in September. Let’s detailed the above-mentioned ETFs that have rewarded investors this year: Invesco Dynamic Energy Exploration & Production ETF ( PXE Quick Quote PXE - Free Report) – Up 81.9% Invesco Dynamic Energy Exploration & Production ETF follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value. Holding 31 stocks in its basket, Invesco Dynamic Energy Exploration & Production ETF has amassed $349.9 million in its asset base and charges 63 bps in annual fees. It trades in a volume of 154,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook. SPDR S&P North American Natural Resources ETF ( NANR Quick Quote NANR - Free Report) – Up 32% SPDR S&P North American Natural Resources ETF provides exposure to U.S. and Canadian publicly traded large and mid-cap companies within the industries of the materials energy, and consumer staples with 49%, 46% and 5% share, respectively. It follows the S&P BMI North American Natural Resources Index, holding 35 stocks in its basket (read: Top-Performing ETFs of Last Week). SPDR S&P North American Natural Resources ETF has amassed $596.6 million and charges 35 bps in annual fees. It trades in a moderate volume of 56,000 shares a day on average. SPDR S&P Metals & Mining ETF ( XME Quick Quote XME - Free Report) – Up 18.5% SPDR S&P Metals & Mining ETF offers broad exposure to the U.S. metal and mining industry by tracking the S&P Metals and Mining Select Industry. It holds 34 stocks in its basket, with steel firms accounting for 40.3% of the portfolio, while coal & consumable fuels, aluminum and Diversified Metals & Mining rounding off the next three spots with double-digit exposure each. SPDR S&P Metals & Mining ETF has 0.35% in expense ratio and AUM of $1.9 billion. It trades in an average daily volume of around 4.1 million shares (read: 5 Sector ETFs That Show Promise After August Jobs Data). VanEck Vectors Steel ETF ( SLX Quick Quote SLX - Free Report) – Up 13.9% VanEck Vectors Steel ETF provides a pure-play exposure to a small basket of 26 stocks in the steel sector. It tracks the NYSE Arca Steel Index. American firms dominate the fund’s returns at 49%, followed by Brazil (19.4%) and Australia (10.7%). VanEck Vectors Steel ETF has amassed $95.5 million in its asset base and charges 56 bps in fees from investors. It trades in a moderate volume of 27,000 shares a day on average. iShares U.S. Insurance ETF ( IAK Quick Quote IAK - Free Report) – Up 12.4% With AUM of $507.9 million, iShares U.S. Insurance ETF offers exposure to U.S. companies that provide life, property and casualty, and full-line insurance. It tracks the Dow Jones U.S. Select Insurance Index and holds 56 securities in its basket with a double-digit concentration on the top two firms (read: Insurance ETFs Rallying on Solid Q3 Earnings). Property & casualty insurance accounts for the largest share at 54.8%, while life & health insurance and multiline insurance round off the next two spots with double-digit exposure each. iShares U.S. Insurance ETF charges 39 bps in annual fees and trades in an average daily volume of 86,000 shares per day. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.