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October has proved to be a turbulent month for Wall Street as higher bond yields and rising geopolitical tensions continued to weigh on it. The Nasdaq Composite Index and the S&P 500 fell into correction territory last week, especially after big technology earnings failed to reassure investors.
Despite the weakness, a few sectors have still been in green over the past month. We have highlighted the top-performing ETFs from different sectors. These include First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) , iShares MSCI Global Gold Miners ETF (RING - Free Report) , Global X Defense Tech ETF (SHLD - Free Report) , Global X Silver Miners ETF (SIL - Free Report) and Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) .
Treasury yields are on the rise, with the 10-year bond hitting 5% — its highest level since 2007. Investors are betting that the Fed would keep interest rates at their current high levels for longer amid concerns over inflation spiking again due to the high energy process. The raft of economic data showing the resilience of economic growth is also bolstering the case for persistently high inflation expectations.
With the market expecting one more Fed hike this year, yields are expected to rise further. As yields climb, the cost of borrowing will surge, potentially curtailing consumer spending and corporate investment and thereby posing a significant headwind to economic recovery (read: Covered Call ETFs: A High-Yield Income Strategy for Investors).
Further, the ongoing Israel-Hamas Conflict has resulted in global uncertainties, leading to risk-off trade.
ETFs in Focus
We have profiled the abovementioned ETFs in detail below:
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 9.2%
Bitcoin’s thrilling ascent to heights not seen in a year has led to a spike in crypto stocks. The combination of factors, including growing anticipation surrounding the approval of Bitcoin ETFs in the United States, advancing technology and positive market sentiment, rekindled interest in the crypto market (read: 5 ETFs at the Forefront of Bitcoin's Thrilling Ascent).
First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge believes are driving cryptocurrency, crypto assets and digital economies-related innovation. SkyBridge identifies securities primarily via “bottom up” research focused on finding companies leading in the crypto industry ecosystem. First Trust SkyBridge Crypto Industry holds 30 stocks in its basket and charges 85 bps in fees per year from investors. It has amassed $18.2 million in its asset base and trades in an average daily volume of 17,000 shares.
iShares MSCI Global Gold Miners ETF (RING - Free Report) – Up 8.7%
Gold prices have been trading at the key $2,000 level, supported by safe-haven demand amid the Middle East conflict. Metal miners are the biggest beneficiaries of the surge in gold price as the mining companies act as a leveraged play on the underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market.
iShares MSCI Global Gold Miners ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 37 securities in its portfolio. Canadian firms take more than half of the portfolio, while the United States takes the next spot at 21% share. RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. It has been able to manage assets worth $385 million and trades in a good volume of 76,000 shares per day.
Shares of defense companies are on the rise as a result of the Israel and Gaza conflict, which could result in increased defense spending. Global X Defense Tech ETF tracks the Global X Defense Tech Index and seeks to invest in companies positioned to benefit from the increased adoption and utilization of defense technology. These include companies that build and manage cybersecurity systems, utilize artificial intelligence and big data, and build advanced military systems and hardware such as robotics, fuel systems, and aircraft for defense applications.
Global X Defense Tech ETF holds 34 stocks in its basket with and charges 50 bps in annual fees. It trades in a volume of 3,0000 shares a day on average.
Global X Silver Miners ETF (SIL - Free Report) – Up 3.1%
Silver prices also saw a rise due to its characteristics as a precious metal and industrial use. Global X Silver Miners ETF provides investors access to a broad range of silver mining companies by tracking the Solactive Global Silver Miners Total Return Index. It holds 36 stocks in its basket with double-digit concentration on the top two firms. Global X Silver Miners ETF has managed assets worth $832.9 million and trades in a good volume of about 383,000 shares a day. It charges 65 bps in annual fees.
Invesco KBW Property & Casualty Insurance ETF provides exposure to the 25 leading national money centers and regional banks or thrifts. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up for at least 8% share each (read: 5 Sector ETFs That Survived the Market Downturn in September).
Invesco KBW Property & Casualty Insurance ETF has managed $158.6 million in its asset base and has an expense ratio of 0.35%. KBWP trades in an average daily volume of 10,000 shares but has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
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5 Sector ETFs That Gained in Turbulent October
October has proved to be a turbulent month for Wall Street as higher bond yields and rising geopolitical tensions continued to weigh on it. The Nasdaq Composite Index and the S&P 500 fell into correction territory last week, especially after big technology earnings failed to reassure investors.
Despite the weakness, a few sectors have still been in green over the past month. We have highlighted the top-performing ETFs from different sectors. These include First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) , iShares MSCI Global Gold Miners ETF (RING - Free Report) , Global X Defense Tech ETF (SHLD - Free Report) , Global X Silver Miners ETF (SIL - Free Report) and Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) .
Treasury yields are on the rise, with the 10-year bond hitting 5% — its highest level since 2007. Investors are betting that the Fed would keep interest rates at their current high levels for longer amid concerns over inflation spiking again due to the high energy process. The raft of economic data showing the resilience of economic growth is also bolstering the case for persistently high inflation expectations.
With the market expecting one more Fed hike this year, yields are expected to rise further. As yields climb, the cost of borrowing will surge, potentially curtailing consumer spending and corporate investment and thereby posing a significant headwind to economic recovery (read: Covered Call ETFs: A High-Yield Income Strategy for Investors).
Further, the ongoing Israel-Hamas Conflict has resulted in global uncertainties, leading to risk-off trade.
ETFs in Focus
We have profiled the abovementioned ETFs in detail below:
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 9.2%
Bitcoin’s thrilling ascent to heights not seen in a year has led to a spike in crypto stocks. The combination of factors, including growing anticipation surrounding the approval of Bitcoin ETFs in the United States, advancing technology and positive market sentiment, rekindled interest in the crypto market (read: 5 ETFs at the Forefront of Bitcoin's Thrilling Ascent).
First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge believes are driving cryptocurrency, crypto assets and digital economies-related innovation. SkyBridge identifies securities primarily via “bottom up” research focused on finding companies leading in the crypto industry ecosystem. First Trust SkyBridge Crypto Industry holds 30 stocks in its basket and charges 85 bps in fees per year from investors. It has amassed $18.2 million in its asset base and trades in an average daily volume of 17,000 shares.
iShares MSCI Global Gold Miners ETF (RING - Free Report) – Up 8.7%
Gold prices have been trading at the key $2,000 level, supported by safe-haven demand amid the Middle East conflict. Metal miners are the biggest beneficiaries of the surge in gold price as the mining companies act as a leveraged play on the underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market.
iShares MSCI Global Gold Miners ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 37 securities in its portfolio. Canadian firms take more than half of the portfolio, while the United States takes the next spot at 21% share. RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. It has been able to manage assets worth $385 million and trades in a good volume of 76,000 shares per day.
Global X Defense Tech ETF (SHLD - Free Report) – Up 4.1%
Shares of defense companies are on the rise as a result of the Israel and Gaza conflict, which could result in increased defense spending. Global X Defense Tech ETF tracks the Global X Defense Tech Index and seeks to invest in companies positioned to benefit from the increased adoption and utilization of defense technology. These include companies that build and manage cybersecurity systems, utilize artificial intelligence and big data, and build advanced military systems and hardware such as robotics, fuel systems, and aircraft for defense applications.
Global X Defense Tech ETF holds 34 stocks in its basket with and charges 50 bps in annual fees. It trades in a volume of 3,0000 shares a day on average.
Global X Silver Miners ETF (SIL - Free Report) – Up 3.1%
Silver prices also saw a rise due to its characteristics as a precious metal and industrial use. Global X Silver Miners ETF provides investors access to a broad range of silver mining companies by tracking the Solactive Global Silver Miners Total Return Index. It holds 36 stocks in its basket with double-digit concentration on the top two firms. Global X Silver Miners ETF has managed assets worth $832.9 million and trades in a good volume of about 383,000 shares a day. It charges 65 bps in annual fees.
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) – Up 3%
Invesco KBW Property & Casualty Insurance ETF provides exposure to the 25 leading national money centers and regional banks or thrifts. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up for at least 8% share each (read: 5 Sector ETFs That Survived the Market Downturn in September).
Invesco KBW Property & Casualty Insurance ETF has managed $158.6 million in its asset base and has an expense ratio of 0.35%. KBWP trades in an average daily volume of 10,000 shares but has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.