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Traditionally, April brings with it seasonal tailwinds for the equity world. A consensus carried out from 1950 to 2022 shows that April ended up offering positive stock returns in 51 years and negative returns in 22 years, per moneychimp.com, with an average positive return of 1.45%.
However, this April failed to live up to its upbeat reputation. The benchmark U.S. treasury yield started the month at 3.43%, hit a high of 3.60% and ended the month at 3.44%. The Fed’s preferred inflation gauge Personal Consumption Expenditures price index increased 0.3% last month, in line with economists' expectations.
The annual rate of PCE inflation slowed down to 4.6%, slightly above market expectations of 4.5%. Falling energy prices helped headline inflation continue its downtrend. With most global central banks, including the Fed, remaining committed to raising interest rates due to still-hot inflation, there is a prevalent risk of a recession.
Overall, the S&P 500 had gained a muted 1.5% past month, the Dow Jones has added about 2.5%, the Nasdaq is up only 0.04% and the Russell 2000 has lost about 1.9%. The current earnings season has been mostly positive, especially for big tech companies. However, the United States is facing a re-emergence of the regional banking crisis.
Still, the month of April has been a fruitful month for many ETF areas, with some ETFs posting impressive gains of over 30%. Below we highlight such winning ETF areas.
ETF Areas
Digital Assets
Vaneck Digital Transformation ETF (DAPP - Free Report) ) – Up 32.0%
April 2023 has been one of the biggest months for cryptocurrency. In the aftermath of the banking crisis, cryptocurrencies have experienced a significant surge in value as conventional investment options lose appeal among the broader investor base.
Sugar futures rose to the highest level since January of 2017, thanks to a stronger Brazilian real as well as supply crunch. “As industry groups point to the end of the crushing season, heavy rainfall in top producer and exporter Brazil caused mills to leave millions of tonnes of sugarcane crops untouched in fields to be harvested next year, significantly reducing supply,” as quoted on Tradingeconomics. Plus, inclement weather in other producing countries like Thailand, Australia, and Central America also delayed harvests (read: Tap the Rally in Sweetener Prices With Sugar ETFs).
A combination of factors like power cuts in major producer South Africa, the war in Ukraine and increased production of hybrid cars are driving the platinum prices higher. The platinum market is forecast to be in deficit after two consecutive years of significant surpluses. On the other hand, the demand for platinum is projected to grow by 24% as some part of the auto sector is replacing palladium with cheaper platinum, and industrial demand is increasing, per WPIC. Other emerging applications, such as fuel cells, are creating new opportunities for platinum demand (read: ETFs to Ride the Platinum Rally).
Biotech
Alps Medical Breakthroughs ETF (SBIO - Free Report) – Up 11.8%
The biopharma space is hot with mergers and acquisitions. In the first quarter of this year, total healthcare and life sciences M&A in the United States was about $71 billion, more than double the $28 billion seen in the same quarter last year, according to KPMG, as quoted on barrons.com. Plus, a solid pipeline of research and developments and the incorporation of AI in the R&D division have also been driving prices.
Homebuilding
US Home Construction iShares ETF (ITB - Free Report) ) – Up 11.4%
Homebuilding stocks and ETFs gained in late April on upbeat corporate earnings and upbeat sector data. The nationwide median sale price for existing homes rose slightly month over month in March to $375,700. However, it dropped 0.9% year over year. The year-over-year decline in price has been seen for two successive months following a long period of price increases.
Before that, the U.S. housing market saw 131 consecutive months of year-over-year median sale price increases. Along a decline in prices, we can expect a fall in mortgage rates. Moreover, the mortgage rates may decline in the medium term as the Fed might act less-hawkish ahead on cues of cooling inflation. All these factors may boost home sales ahead (read: Housing ETFs Up on D.R. Horton's Upbeat Earnings).
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5 Best ETF Areas of April Up At Least 10%
Traditionally, April brings with it seasonal tailwinds for the equity world. A consensus carried out from 1950 to 2022 shows that April ended up offering positive stock returns in 51 years and negative returns in 22 years, per moneychimp.com, with an average positive return of 1.45%.
However, this April failed to live up to its upbeat reputation. The benchmark U.S. treasury yield started the month at 3.43%, hit a high of 3.60% and ended the month at 3.44%. The Fed’s preferred inflation gauge Personal Consumption Expenditures price index increased 0.3% last month, in line with economists' expectations.
The annual rate of PCE inflation slowed down to 4.6%, slightly above market expectations of 4.5%. Falling energy prices helped headline inflation continue its downtrend. With most global central banks, including the Fed, remaining committed to raising interest rates due to still-hot inflation, there is a prevalent risk of a recession.
Overall, the S&P 500 had gained a muted 1.5% past month, the Dow Jones has added about 2.5%, the Nasdaq is up only 0.04% and the Russell 2000 has lost about 1.9%. The current earnings season has been mostly positive, especially for big tech companies. However, the United States is facing a re-emergence of the regional banking crisis.
Still, the month of April has been a fruitful month for many ETF areas, with some ETFs posting impressive gains of over 30%. Below we highlight such winning ETF areas.
ETF Areas
Digital Assets
Vaneck Digital Transformation ETF (DAPP - Free Report) ) – Up 32.0%
Valkyrie Bitcoin Miners ETF (WGMI - Free Report) ) – Up 27.9%
April 2023 has been one of the biggest months for cryptocurrency. In the aftermath of the banking crisis, cryptocurrencies have experienced a significant surge in value as conventional investment options lose appeal among the broader investor base.
Sugar
iPatha.B Sugar Subindex TR ETN ) – Up 26.9%
Teucrium Sugar (CANE - Free Report) ) – Up 26.5%
Sugar futures rose to the highest level since January of 2017, thanks to a stronger Brazilian real as well as supply crunch. “As industry groups point to the end of the crushing season, heavy rainfall in top producer and exporter Brazil caused mills to leave millions of tonnes of sugarcane crops untouched in fields to be harvested next year, significantly reducing supply,” as quoted on Tradingeconomics. Plus, inclement weather in other producing countries like Thailand, Australia, and Central America also delayed harvests (read: Tap the Rally in Sweetener Prices With Sugar ETFs).
Platinum
iPatha.B Platinum Subindex TR ETN – Up 12.2%
Physical Platinum ETF (PPLT - Free Report) – Up 11.3%
A combination of factors like power cuts in major producer South Africa, the war in Ukraine and increased production of hybrid cars are driving the platinum prices higher. The platinum market is forecast to be in deficit after two consecutive years of significant surpluses. On the other hand, the demand for platinum is projected to grow by 24% as some part of the auto sector is replacing palladium with cheaper platinum, and industrial demand is increasing, per WPIC. Other emerging applications, such as fuel cells, are creating new opportunities for platinum demand (read: ETFs to Ride the Platinum Rally).
Biotech
Alps Medical Breakthroughs ETF (SBIO - Free Report) – Up 11.8%
The biopharma space is hot with mergers and acquisitions. In the first quarter of this year, total healthcare and life sciences M&A in the United States was about $71 billion, more than double the $28 billion seen in the same quarter last year, according to KPMG, as quoted on barrons.com. Plus, a solid pipeline of research and developments and the incorporation of AI in the R&D division have also been driving prices.
Homebuilding
US Home Construction iShares ETF (ITB - Free Report) ) – Up 11.4%
Homebuilding stocks and ETFs gained in late April on upbeat corporate earnings and upbeat sector data. The nationwide median sale price for existing homes rose slightly month over month in March to $375,700. However, it dropped 0.9% year over year. The year-over-year decline in price has been seen for two successive months following a long period of price increases.
Before that, the U.S. housing market saw 131 consecutive months of year-over-year median sale price increases. Along a decline in prices, we can expect a fall in mortgage rates. Moreover, the mortgage rates may decline in the medium term as the Fed might act less-hawkish ahead on cues of cooling inflation. All these factors may boost home sales ahead (read: Housing ETFs Up on D.R. Horton's Upbeat Earnings).