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Don't Be Fooled By 5 Top-Ranked ETFs' Q1 Underperformances
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Since October, Wall Street has been on a winning streak, defying concerns about various economic factors, especially high inflation and high rates. The S&P 500 logged its best first quarter since 2019. The index was up 10% in the first quarter of 2024. The index has also surged by 25% over the past five months, leading some investors to question if this rapid rise is sustainable.
WisdomTree Cloud Computing ETF (WCLD - Free Report) – Up 3.5% in Q1 of 2024; Zacks Rank #1 (Strong Buy)
Tech industries such as cloud has been experiencing accelerated growth, buoyed by factors like market stabilization, and industry-specific catalysts. Mark Mahaney, Senior Managing Director at Evercore ISI, recently highlighted that the transformative power of generative AI (GenAI) may act as a key driver propelling the growth of cloud.
GenAI providers need cloud providers to train, run and deploy their GenAI solutions. Evercore ISI believes that cloud revenues are likely to see faster growth in 2024 than in 2023 for names like Google, Amazon and Microsoft, as indicated by a Yahoo Finance article.
iShares S&P Small-Cap 600 Value ETF (IJS - Free Report) – Down 0.02% in Q1; Zacks Rank #2 (Buy)
The latest report on fourth quarter GDP for the year 2023, released Thursday morning, revealed that the US economy expanded at a 3.4% rate, up from the previous estimate of 3.2%. In terms of employment, initial jobless claims for the last week stood at 210,000, slightly below the estimated 212,000.
An improving U.S. economy is always favorable for small-cap U.S. stocks as pint-sized stocks are more closely-tied to the domestic economy. Plus, rates are still high in the economy, which is a plus for value ETFs.
iShares Biotechnology ETF (IBB - Free Report) – Down 0.6% in Q1; Zacks Rank #1
Amid ongoing challenges about the geopolitical risks and the uncertainty about the timing of the likely Fed rate cuts, biotech ETFs like IBB offer value and safe proposition. After facing difficulties last year, biotech companies are seeing a turnaround driven by attractive valuations and AI-led advances in medicine.
M&A activity in the space stayed strong in 2023, with a notable interest in innovative companies driving value. This trend is set to continue in 2024, with a visible uptick in dealmaking observed toward the end of 2023 and early 2024, per PWC.
SPDR S&P Kensho Final Frontiers ETF (ROKT - Free Report) – Up 1.6% in Q1; Zacks Rank #2
Investments in "final frontier" technologies are expected to grow in 2024 for several reasons, including continuous breakthroughs in areas like AI, space exploration, biotechnology, and quantum computing. Challenges like climate change, healthcare, and resource scarcity are driving investment in technologies that offer solutions to such crises. Many governments are incentivizing research and development in cutting-edge technologies through grants, tax breaks, and supportive regulations.
The S&P Kensho Final Frontiers Index comprises U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide that are included in the Final Frontiers sector. The fund charges 45 bps in fees.
Franklin U.S. Low Volatility High Dividend Index ETF (LVHD - Free Report) – Down 0.03% in Q1; Zacks Rank #2
The demand for dividend normally remains high. With the Fed expected to cut rates this year, the demand for current income would likely to be higher in the medium term. Hence, this low-volatility high dividend ETF could be an intriguing bet.
The underlying QS Low Volatility High Dividend Index of the fund provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility. The fund yields 3.74% annually and charges 27 bps in fees.
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Don't Be Fooled By 5 Top-Ranked ETFs' Q1 Underperformances
Since October, Wall Street has been on a winning streak, defying concerns about various economic factors, especially high inflation and high rates. The S&P 500 logged its best first quarter since 2019. The index was up 10% in the first quarter of 2024. The index has also surged by 25% over the past five months, leading some investors to question if this rapid rise is sustainable.
WisdomTree Cloud Computing ETF (WCLD - Free Report) – Up 3.5% in Q1 of 2024; Zacks Rank #1 (Strong Buy)
Tech industries such as cloud has been experiencing accelerated growth, buoyed by factors like market stabilization, and industry-specific catalysts. Mark Mahaney, Senior Managing Director at Evercore ISI, recently highlighted that the transformative power of generative AI (GenAI) may act as a key driver propelling the growth of cloud.
GenAI providers need cloud providers to train, run and deploy their GenAI solutions. Evercore ISI believes that cloud revenues are likely to see faster growth in 2024 than in 2023 for names like Google, Amazon and Microsoft, as indicated by a Yahoo Finance article.
iShares S&P Small-Cap 600 Value ETF (IJS - Free Report) – Down 0.02% in Q1; Zacks Rank #2 (Buy)
The latest report on fourth quarter GDP for the year 2023, released Thursday morning, revealed that the US economy expanded at a 3.4% rate, up from the previous estimate of 3.2%. In terms of employment, initial jobless claims for the last week stood at 210,000, slightly below the estimated 212,000.
An improving U.S. economy is always favorable for small-cap U.S. stocks as pint-sized stocks are more closely-tied to the domestic economy. Plus, rates are still high in the economy, which is a plus for value ETFs.
iShares Biotechnology ETF (IBB - Free Report) – Down 0.6% in Q1; Zacks Rank #1
Amid ongoing challenges about the geopolitical risks and the uncertainty about the timing of the likely Fed rate cuts, biotech ETFs like IBB offer value and safe proposition. After facing difficulties last year, biotech companies are seeing a turnaround driven by attractive valuations and AI-led advances in medicine.
M&A activity in the space stayed strong in 2023, with a notable interest in innovative companies driving value. This trend is set to continue in 2024, with a visible uptick in dealmaking observed toward the end of 2023 and early 2024, per PWC.
SPDR S&P Kensho Final Frontiers ETF (ROKT - Free Report) – Up 1.6% in Q1; Zacks Rank #2
Investments in "final frontier" technologies are expected to grow in 2024 for several reasons, including continuous breakthroughs in areas like AI, space exploration, biotechnology, and quantum computing. Challenges like climate change, healthcare, and resource scarcity are driving investment in technologies that offer solutions to such crises. Many governments are incentivizing research and development in cutting-edge technologies through grants, tax breaks, and supportive regulations.
The S&P Kensho Final Frontiers Index comprises U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide that are included in the Final Frontiers sector. The fund charges 45 bps in fees.
Franklin U.S. Low Volatility High Dividend Index ETF (LVHD - Free Report) – Down 0.03% in Q1; Zacks Rank #2
The demand for dividend normally remains high. With the Fed expected to cut rates this year, the demand for current income would likely to be higher in the medium term. Hence, this low-volatility high dividend ETF could be an intriguing bet.
The underlying QS Low Volatility High Dividend Index of the fund provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility. The fund yields 3.74% annually and charges 27 bps in fees.