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4 Sector ETFs to Win Despite Slowing November Inflation Data
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The annual inflation rate in the United States slowed to 3.1% in November 2023, the lowest reading in five months, from 3.2% in October and in line with market forecasts. Compared to the previous month, consumer prices edged 0.1% higher, compared to expectations of a flat reading, and after being unchanged in October. Meanwhile, core inflation remained at 4% and the monthly rate rose to 0.3% from 0.2%, in line with forecasts.
Against this backdrop, below we highlight a few sector ETFs that should gain in the near term.
Sector ETFs to Gain
Real Estate – Vanguard Real Estate ETF (VNQ - Free Report)
Weighted shelter makes up 32.77% of CPI, of which 7.8% is rent and 23.68% is private housing, per data from MacroMicro. The shelter index rose 0.4% over the month after gaining 0.3% in October.
The underlying MSCI US Investable Market Real Estate 25/50 Index is made up of stocks of large, mid-size, and small U.S. companies within the real estate sector. The fund yields 4.28% annually and charges 12 bps in fees.
The transportation index jumped 1.1% sequentially in November after a rise of 0.8% in October. The index gained 10.1% year over year. The fund XTN has a Zacks Rank #2. Trucking takes about 40% of the fund, followed by Airlines and Air Freight & Logistics.
Medical Care Commodities – iShares U.S. Medical Devices ETF (IHI - Free Report)
The medical care commodities index rose 0.5% sequentially after an uptick of 0.4% in October. The index is, however, up 5% year over year.
The Zacks Rank #3 (Hold) fund measures the performance of the medical equipment sector of the U.S. equity market. Abbott (18.1%), Intuitive Surgical (10.88%) and Medtronic (10.42%) hold the top three spots in the fund.
The food away from index increased 0.4% sequentially in November. The same growth was recorded in each of the previous two months. The index for full-service meals rose 0.5% and the index for limited-service meals increased 0.4% over the month.
This ETF is active and does not track a benchmark. The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business.
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4 Sector ETFs to Win Despite Slowing November Inflation Data
The annual inflation rate in the United States slowed to 3.1% in November 2023, the lowest reading in five months, from 3.2% in October and in line with market forecasts. Compared to the previous month, consumer prices edged 0.1% higher, compared to expectations of a flat reading, and after being unchanged in October. Meanwhile, core inflation remained at 4% and the monthly rate rose to 0.3% from 0.2%, in line with forecasts.
Against this backdrop, below we highlight a few sector ETFs that should gain in the near term.
Sector ETFs to Gain
Real Estate – Vanguard Real Estate ETF (VNQ - Free Report)
Weighted shelter makes up 32.77% of CPI, of which 7.8% is rent and 23.68% is private housing, per data from MacroMicro. The shelter index rose 0.4% over the month after gaining 0.3% in October.
The underlying MSCI US Investable Market Real Estate 25/50 Index is made up of stocks of large, mid-size, and small U.S. companies within the real estate sector. The fund yields 4.28% annually and charges 12 bps in fees.
Transportation – SPDR S&P Transportation ETF (XTN - Free Report)
The transportation index jumped 1.1% sequentially in November after a rise of 0.8% in October. The index gained 10.1% year over year. The fund XTN has a Zacks Rank #2. Trucking takes about 40% of the fund, followed by Airlines and Air Freight & Logistics.
Medical Care Commodities – iShares U.S. Medical Devices ETF (IHI - Free Report)
The medical care commodities index rose 0.5% sequentially after an uptick of 0.4% in October. The index is, however, up 5% year over year.
The Zacks Rank #3 (Hold) fund measures the performance of the medical equipment sector of the U.S. equity market. Abbott (18.1%), Intuitive Surgical (10.88%) and Medtronic (10.42%) hold the top three spots in the fund.
Restaurants – AdvisorShares Restaurant ETF (EATZ - Free Report)
The food away from index increased 0.4% sequentially in November. The same growth was recorded in each of the previous two months. The index for full-service meals rose 0.5% and the index for limited-service meals increased 0.4% over the month.
This ETF is active and does not track a benchmark. The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business.