As the second-quarter draws to a close, Wall Street and global markets, must be interested in knowing which investing areas won in the second quarter. The quarter was upbeat for the stock market, having gained positive momentum from an agreement on the U.S. debt ceiling, encouraging Q1 results, easing inflation and an AI frenzy.
The S&P 500 (up 8.7%), the Dow Jones (up 3.7%), the Nasdaq (up 13.7%) and the Russell 2000 (up 4.4%) — all delivered positive returns in the past three months (as of Jun 28, 2023). Notably, Information Technology takes about 27% of the S&P 500 while the sector occupies about 60% of the Nasdaq-100. Hence, a tech rally is always instrumental in driving the broader markets.
However, though the quarter started on a hopeful note, it is going to end on a wavering mode as the Fed rate hike worries took centerstage all over again. Fed chair Powell’s hawkish comments made recently hinted at July’s rate hike possibility.
Against this backdrop, below, we highlight a few top-performing ETF areas of the second quarter.
Brazil VanEck Brazil Small-Cap ETF ( BRF Quick Quote BRF - Free Report) – Up 42.9% iShares MSCI Brazil Small-Cap ETF ( EWZS Quick Quote EWZS - Free Report) – Up 37.1%
Investors have launched themselves into Brazil’s stock market as the nation’s central bank is likely to ease stubbornly high rates amid falling inflation. Finance Minister Fernando Haddad stated that Brazil is about to enter a cycle of interest rate cuts, highlighting that inflation is within the range and the exchange rate is stable. Fidelity Investments and some local hedge funds placed their bet on Brazil, as they believed that the likely decline in borrowing costs would boost corporate growth — just as President Luiz Inacio Lula da Silva’s new fiscal framework moves toward materialization.
Nigeria Global X MSCI Nigeria ETF ( NGE Quick Quote NGE - Free Report) – Up 28.5%
Nigeria stocks soared to a 15-year high due to the oustering of central bank governor Godwin Emefiele. Investors betting on a currency devaluation sent the main index of the Nigerian Exchange soaring, per Bloomberg.
European Equities OShares Europe Quality Dividend ETF ( OEUR Quick Quote OEUR - Free Report) – Up 28.4%
The fund looks to provide exposure to a portfolio of large-cap and mid-cap dividend-paying companies in Europe selected based on several fundamental metrics such as quality, low volatility and dividend growth. As the European pean markets have been going through high inflation and high rates, safer products like quality dividend ETF surged in Q2.
FANG+ MicroSectors FANG+ ETN ( FNGS Quick Quote FNGS - Free Report) – Up 24.9%
The AI boom has brightened the appeal for the FANG+ even more in the second quarter. In any case, the tech space has been in high momentum from the start of the year. Wedbush analyst Dan Ives believes that the AI resurgence will usher in the “fourth industrial revolution,”
as quoted on CNBC. He expects “a trillion dollars of incremental spend over the next decade” into A.I. Meta, Alphabet, Amazon, Nvidia – all splurged massively into AI in the second quarter. Sugar iPath Series B Bloomberg Sugar Subindex Total Return ( SGG Quick Quote SGG - Free Report) – Up 23.6% Teucrium Sugar ETF ( CANE Quick Quote CANE - Free Report) – Up 23.1%
Sugar futures rose to the highest level since January 2017, thanks to a stronger Brazilian real as well as a supply crunch. Plus, inclement weather in major producing countries like Brazil, Thailand, Australia, and Central America also delayed harvests and boosted sugar prices.