Wall Street registered the first back-to-back monthly gains since 2021, driven by signs of cooling consumer prices and hopes of a less-hawkish Fed. The Dow Jones Industrial Average and the S&P 500 Index climbed 5.7% and 5.4%, respectively, while the tech-heavy Nasdaq Composite Index gained 4.4%.
While there have been winners in many corners of the space, we highlight five ETFs from different industries that outperformed last month. These have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). The funds are, namely, Global X Social Media Index ETF ( SOCL Quick Quote SOCL - Free Report) , VanEck Vectors Semiconductor ETF ( SMH Quick Quote SMH - Free Report) , First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund ( GRID Quick Quote GRID - Free Report) , Materials Select Sector SPDR ( XLB Quick Quote XLB - Free Report) , and SPDR NYSE Technology ETF ( XNTK Quick Quote XNTK - Free Report) . These are likely to continue outperforming should the trends prevail. 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. The data renewed optimism in the stock market about the Fed‘s possibility of slowing its pace of interest-rate increases in 2023. The latest comments from the Federal Reserve Chairman Jerome Powell signaled that smaller interest rate increases are likely ahead and could start in December. Traders expect the Fed to increase rates by 50 bps in December, with the rates peaking in June 2023. Additionally, the holiday season started with a huge bang despite concerns about inflation and higher prices that bolstered further optimism in the stock market to end November. Consumers spent a record $9.12 billion, up 2.3% year over year, on online shopping during Black Friday this year, according to Adobe. Cyber Monday online sales reached a record $11.3 billion in online shopping, up 5.8% year over year (read: 5 ETFs to Splurge on Cyber Monday Record Sales). Further, the rounds of data underscore an improving economy, which can avoid a recession. The economy grew at an annualized rate of 2.9% in the third quarter, an upgrade from its initial estimate and the overall employment market remains strong. Consumer spending continued despite higher inflation. The month’s rally came despite continued worries over lockdowns in China. The country is ramping up COVID-19 restrictions after seeing case counts climbing in recent days. We have profiled the above-mentioned ETFs in detail below: Global X Social Media Index ETF ( SOCL Quick Quote SOCL - Free Report) – Up 23.3% Global X Social Media Index ETF provides investors access to social media companies around the world and has amassed $119.1 million in its asset base. It tracks the Solactive Social Media Total Return Index, holding 42 securities in the basket. Global X Social Media Index ETF charges 0.65% in annual fees and sees lower trading volumes of roughly 19,000 shares a day. The fund has a Zacks ETF Rank #1 with a High risk outlook. VanEck Vectors Semiconductor ETF ( SMH Quick Quote SMH - Free Report) VanEck Vectors Semiconductor ETF provides exposure to 25 companies involved in semiconductor production and equipment by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $7 billion and charges 35 bps in annual fees and expenses. VanEck Vectors Semiconductor ETF is heavily traded with a volume of around 4.8 million shares per day and has a Zacks ETF Rank #1 with a High risk outlook (read: Is the Worst Over for Semiconductor Stocks & ETFs?). First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund ( GRID Quick Quote GRID - Free Report) – Up 11.9% First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund offers exposure to stocks in the grid and electric energy infrastructure sector. It follows the Nasdaq Clean Edge Smart Grid Infrastructure Index, which includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector. First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund has accumulated $651 million in its asset base and trades in volume of 33,000 shares a day on average. It charges 63 bps in annual fees. First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund has a Zacks ETF Rank #2 with a High risk outlook. Materials Select Sector SPDR ( XLB Quick Quote XLB - Free Report) – Up 11.8% Materials Select Sector SPDR is the most popular material ETF that follows the Materials Select Sector Index. It manages about $5.4 billion in its asset base and trades in volumes of around 6.6 million shares. Materials Select Sector SPDR holds about 28 securities in its basket and charges 10 bps in fees per year from its investors. In terms of industrial exposure, chemicals dominates the portfolio with 70% share, while metals & mining and containers & packaging round off the top three positions. The product has a Zacks ETF Rank #2 with a Medium risk outlook. SPDR NYSE Technology ETF ( XNTK Quick Quote XNTK - Free Report) – Up 8% SPDR NYSE Technology ETF provides exposure to 35 leading U.S.-listed technology-related companies by tracking the NYSE Technology Index. Semiconductors take the largest share at 24.8%, while systems software, semiconductor equipment, and Internet & direct marketing retail round off the next spots (read: Should You Go Bottom Fishing Big Tech ETFs Following Soros?). SPDR NYSE Technology ETF has amassed $383.1 million and charges 35 bps in annual fees. It trades in an average daily volume of 15,000 shares and has a Zacks ETF Rank #2.