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Wall Street has witnessed an impressive surge in November. Specifically, the S&P 500 has surged by 8.5% past month, and the Nasdaq Composite Index has seen a substantial rise of nearly 11%. Furthermore, the Dow Jones has achieved a 7.2% increase in November, marking its best month in about a year. The Russell 2000 was also not far behind as it scored 5.6% gains past month. The gains were broad-based and well spread out across various segments.
The technology sector has led the month with about 13% gains, while the energy sector has been a laggard, losing 2.3%. The bets that the Fed rates have peaked resulted in this surge in the markets. As the growth sectors like technology relies on borrowing for superior growth, these outperform in a low-rate environment.
Further, better-than-expected earnings added to the strength. The overall Q3 earnings picture remains stable and largely positive. The third-quarter reporting cycle is on track to record year-over-year earnings growth after three back-to-back quarters of earnings decline.
The Personal Consumption Expenditures (PCE) Index grew 3% year over year for the month of October, down from 3.4% in September and in line with expectations. "Core" PCE, which bars the volatile food and energy categories, grew 3.5%, down from 3.7% from the month prior and also in line with what economists surveyed by Bloomberg had expected. This was yet another good news for the month.
Upbeat consumer confidence is another reason for the uptick in the markets. Americans have spent by a record figure this year over the five-day Thanksgiving weekend lured by significant discounts across various categories, including beauty products, toys and electronics.
According to a survey by the National Retail Federation (“NRF”), more than 200 million shoppers engaged in in-store and online purchases over the Thanksgiving weekend (Thanksgiving Day through Cyber Monday). This represents about 2% growth from the previous year and an increase from the NRF's initial estimates of 182 million.
Against this backdrop, below we highlight a few winning & losing ETFs of November.
The underlying Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure rates for shipping dry bulk freight. The expense ratio of the fund is 3.50%.
ARKK is an actively managed Exchange Traded Fund that seeks long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation. The fund charges 75 bps in fees.
ARKF is an actively managed Exchange Traded Fund that seeks long-term growth of capital. It seeks to achieve this investment objective by investing under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies that are engaged in the Fund’s investment theme of financial technology (“Fintech”) innovation. It charges 75 bps in fees.
The underlying Solactive Blockchain Index provides exposure to companies that are positioned to benefit from further advances in the field of blockchain technology. The fund charges 50 bps in fees.
Losing ETFs in Focus
Simplify Tail Risk Strategy ETF – Down 89.8%
This ETF is active and does not track a benchmark. The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 84 bps in fees.
KraneShares Global Carbon Offset Strategy ETF – Down 35.3%
The KraneShares Global Carbon Offset Strategy ETF provides broad coverage of the voluntary carbon market by tracking carbon offset futures contracts. The fund charges 79 bps in fees.
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) – Down 35.2%
The underlying S&P 500 VIX Short-Term Futures Index Total Return offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index. The fund charges 89 bps in fees.
United States Natural Gas ETF (UNG - Free Report) – Down 23.5%
The Natural Gas Price Index is the futures contract on natural gas as traded on the NYMEX. The expense ratio of the fund is 1.06%.
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Best & Worst ETFs of November
Wall Street has witnessed an impressive surge in November. Specifically, the S&P 500 has surged by 8.5% past month, and the Nasdaq Composite Index has seen a substantial rise of nearly 11%. Furthermore, the Dow Jones has achieved a 7.2% increase in November, marking its best month in about a year. The Russell 2000 was also not far behind as it scored 5.6% gains past month. The gains were broad-based and well spread out across various segments.
The technology sector has led the month with about 13% gains, while the energy sector has been a laggard, losing 2.3%. The bets that the Fed rates have peaked resulted in this surge in the markets. As the growth sectors like technology relies on borrowing for superior growth, these outperform in a low-rate environment.
Further, better-than-expected earnings added to the strength. The overall Q3 earnings picture remains stable and largely positive. The third-quarter reporting cycle is on track to record year-over-year earnings growth after three back-to-back quarters of earnings decline.
The Personal Consumption Expenditures (PCE) Index grew 3% year over year for the month of October, down from 3.4% in September and in line with expectations. "Core" PCE, which bars the volatile food and energy categories, grew 3.5%, down from 3.7% from the month prior and also in line with what economists surveyed by Bloomberg had expected. This was yet another good news for the month.
Upbeat consumer confidence is another reason for the uptick in the markets. Americans have spent by a record figure this year over the five-day Thanksgiving weekend lured by significant discounts across various categories, including beauty products, toys and electronics.
According to a survey by the National Retail Federation (“NRF”), more than 200 million shoppers engaged in in-store and online purchases over the Thanksgiving weekend (Thanksgiving Day through Cyber Monday). This represents about 2% growth from the previous year and an increase from the NRF's initial estimates of 182 million.
Against this backdrop, below we highlight a few winning & losing ETFs of November.
Winning ETFs in Focus
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 83.4%
The underlying Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure rates for shipping dry bulk freight. The expense ratio of the fund is 3.50%.
ARK Innovation ETF (ARKK - Free Report) – Up 37.5%
ARKK is an actively managed Exchange Traded Fund that seeks long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation. The fund charges 75 bps in fees.
ARK Fintech Innovation ETF (ARKF - Free Report) – Up 36.6%
ARKF is an actively managed Exchange Traded Fund that seeks long-term growth of capital. It seeks to achieve this investment objective by investing under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies that are engaged in the Fund’s investment theme of financial technology (“Fintech”) innovation. It charges 75 bps in fees.
Global X Blockchain ETF (BKCH - Free Report) – Up 36.6%
The underlying Solactive Blockchain Index provides exposure to companies that are positioned to benefit from further advances in the field of blockchain technology. The fund charges 50 bps in fees.
Losing ETFs in Focus
Simplify Tail Risk Strategy ETF – Down 89.8%
This ETF is active and does not track a benchmark. The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 84 bps in fees.
KraneShares Global Carbon Offset Strategy ETF – Down 35.3%
The KraneShares Global Carbon Offset Strategy ETF provides broad coverage of the voluntary carbon market by tracking carbon offset futures contracts. The fund charges 79 bps in fees.
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) – Down 35.2%
The underlying S&P 500 VIX Short-Term Futures Index Total Return offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index. The fund charges 89 bps in fees.
United States Natural Gas ETF (UNG - Free Report) – Down 23.5%
The Natural Gas Price Index is the futures contract on natural gas as traded on the NYMEX. The expense ratio of the fund is 1.06%.