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The U.S. stock market logged in the first positive September since 2013 with the major benchmarks ending at all-time highs. Notably, the Dow Jones, the S&P 500 and the Nasdaq gained 2.1%, 1.9% and 1%, respectively, while the Russell 2000 index led the way higher with 6.1% returns.

Though heightened North Korea tensions played foul in the stock market last month, steady economic fundamentals and strong corporate earnings led to the rally. The energy sector has provided a huge boost to the market on rising oil prices while upbeat data led to further strength. Moreover, Trump’s tax reform blueprint unveiled in the last week of the month led to investors’ increased appetite for riskier assets, resulting in skyrocketing stock prices (read: 6 ETFs Set to Win on Trump's Tax Reform).

While there were winners in every corner, a few sectors easily crushed the broad market last month. Below, we have highlighted three sectors and related ETFs that were the star performers in September and could be better plays as we move into the final quarter of the year.

Energy

The energy sector was on tear as the historic output cut deal wherein OPEC, Russia and other producers agreed to curb production by 1.8 million barrels per day until next March, is now paying off with the global oil market on its way toward balancing. The output curbs are leading to falling inventories given robust demand outlook and reduced supplies (read: 5 Best-Performing Energy ETFs & Stocks of September).

PowerShares S&P SmallCap Energy Fund (PSCE - Free Report) : This fund provides exposure to the energy sector of the U.S. small-cap segment by tracking the S&P Small Cap 600 Capped Energy Index. Holding 28 securities in its basket, it is highly concentrated on the top two firms with double-digit exposure while other firms hold less than 8.9% of total assets. From an industrial exposure, equipment and services make up for 61.3% of the portfolio while oil, gas & consumable fuels take the rest. The fund is less popular with AUM of $48.1 million and average daily volume of 42,000 shares. It charges 29 bps in fees per year and surged 22.7% last month. The fund has a Zacks ETF Rank #4 (Sell) with a High risk outlook.  

Jones Energy Inc. (JONE - Free Report) : Based in Austin, TX, Jones Energy is an independent oil and gas company engaged in the development, production and acquisition of oil and natural gas properties in the Anadarko and Arkoma basins of Texas and Oklahoma. Though the stock saw no earnings estimate revision for this year in the last one month, its earnings are expected to increase 32.89%. It has a solid Zacks Rank #3 (Hold) and a VGM Style Score of A. The stock gained 93.9% last month.

Industrials

The industrial sector benefited from surging manufacturing activity, and the aftermath of Hurricanes Harvey & Irma, which raised demand for rebuilding in affected areas, thereby giving a boost to industrials stocks. It is poised to benefit from continued investments in infrastructure-related assets like railroads, autos and housing. Additionally, Trump’s tax reform talks have instilled confidence in his pro-industrial agenda and infused optimism into the sector.

PowerShares S&P SmallCap Industrials Portfolio (PSCI - Free Report) : This product follows the S&P SmallCap 600 Capped Industrials Index, which measures the performance of companies engaged in the business of providing industrial products and services, including engineering, heavy machinery, construction, electrical equipment, aerospace and defense and general manufacturing. The product has a basket of 102 securities, which are widely spread across as each security holds less than 2.8% share. It has AUM of $97.3 million while trades in paltry volume of 7,000 shares. The ETF has expense ratio of 0.29% and gained 10.5% last month. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Solid Reasons to Buy Industrial ETFs Now).

Fairmount Santrol Holdings Inc. (FMSA - Free Report) : Based in Chesterland, OH, Fairmount Santrol provides sand-based proppant solutions for exploration and production companies to enhance the productivity of their oil and gas wells. Though the stock saw negative earnings estimate revision by a penny to 27 cents for this year in the past month, its earnings are expected to grow 165.85%. Additionally, Fairmount Santrol has a Zacks Rank #3 and a VGM Style Score of B. The stock has gained 56.2% last month.

Materials

The materials sector got a bump from the expansion of the China’s supply-side reform program into other sectors of the economy, such as agriculture, power, cement, glass, rare earth materials and aluminum that pushed up prices for raw materials.

VanEck Vectors Rare Earth/Strategic Metals ETF (REMX - Free Report) : This fund offers exposure to companies engaged in producing, refining, and recycling of rare earth and strategic metals and minerals. It follows the MVIS Global Rare Earth/Strategic Metals Index, charging investors 61 bps in annual fees. With AUM of $114.5 million, the fund holds 21 stocks in its basket with heavy concentration on the top three firms that collectively make up for 29.2% of the assets. It trades in average daily volume of 94,000 shares and rose 10.8% last month (read: Top & Flop Zones of Q3 and Their ETFs).

Ryerson Holding Corporation (RYI - Free Report) : Based in Chicago, IL, Ryerson Holding Corporation is a services company that processes and distributes metals. It saw negative earnings estimate revision of six cents in the last one month for this year but is expected to see year-over-year earnings growth of 19.34%. Ryerson Holding has a Zacks Rank #3 and a VGM Style Score of F. It was up 26.2% last month.

Financials

The financial sector was hot last month as the Fed’s decision to reverse the Quantitate Easing policy will push long-term rates higher relative to short-term rates and in turn benefit bank stocks. This is because banks seek to borrow money at short-term rates and lend at long-term rates. With the steep rise in long-term interest rates, banks would be able to earn more on lending and pay less on deposits. This would expand net margins and bolster banks’ profits (read: Fed Reverses QE: Financial ETFs & Stocks to Buy).

First Trust NASDAQ ABA Community Bank Index Fund (QABA - Free Report) : This ETF offers exposure to banks and thrifts, and tracks the NASDAQ OMX ABA Community Bank Index, holding 172 stocks in its basket. It is well spread out across various components as none accounts for more than 3.37% of assets. The fund has accumulated $326.5 million in its asset base and charges 60 bps in annual fees. It trades in volume of 58,000 shares a day on average and gained 9.8% last month. It has a Zacks ETF Rank #2 with a High risk outlook.

People's Utah Bancorp (PUB - Free Report) : Based in American Fork, UT, People's Utah Bancorp is a bank holding company, which provides banking products and services primarily in the United States. The company witnessed no estimate revision in the past month and its earnings are expected to grow 10.77% this year. The stocks gained 20.8% in September. It carries a a Zacks Rank #3 and has a VGM Style Score of D.

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