After stepping back in the final months of 2018, bulls once again fall in love with Wall Street at the start of this year given the dovish Fed, a strong jobs market and a slew of positive developments. Signs of progress over trade negotiations between the United States and China have renewed the appeal for riskier assets. In the latest step, President Donald Trump signaled he might extend a deadline on the U.S.-China trade war ceasefire (read:
Sector ETFs & Stocks to Rally on US-Sino Trade Hopes). Additionally, oil price has shown a strong rebound and recovered about half of the losses made in the final quarter of 2018. The real optimism came from OPEC-led fresh crude output cuts, where major oil producers have agreed to curb production by 1.2 million barrels per day during the first six months of 2019 in order to tackle global supply glut and rebalance the oil market. Additionally, U.S. sanctions against Venezuela and falling OPEC production led to a spike in oil price. The bullish trend is expected to continue this year given a stronger U.S. economy though the still-unresolved U.S.-China trade war, global growth concerns, geopolitical tensions and Brexit continue to block the path of the bulls (read: ETF Investing 2019: Best Ideas & Trends). VIDEO
Against this backdrop, several ETFs have shown strong resiliency and a solid relationship with investors, gaining in double digits. As such, we have highlighted five ETFs that continue to receive investors’ affection as these have potentially superior weighting methodologies and a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).
SPDR S&P Software & Services ETF ( XSW - Free Report) – Up 20.7% This fund targets the software and services segment and follows the S&P Software & Services Select Industry Index. It holds 154 stocks in its basket, charging 35 bps in annual fees. XSW has accumulated $157.4 million and trades in paltry volume of 20,000 shares a day on average. It has a Zacks ETF Rank #2 with a High risk outlook. Invesco Russell MidCap Pure Growth ETF – Up 20% This fund tracks the Russell Midcap Pure Growth Index, which is composed of securities with strong growth characteristics selected from the Russell Midcap Index. It holds 95 securities in its portfolio, charging 39 bps in annual fees. The fund has AUM of $372 million and average daily volume of about 92,000 shares. It has a Zacks ETF Rank #2 with a Medium risk outlook (read: Why Should You Buy Mid-Cap ETFs Now?). Principal Healthcare Innovators Index ETF ( BTEC - Free Report) – Up 19.8% This fund offers access to early-phase companies developing treatments for conditions like migraines, Crohn’s disease, multiple Sclerosis, diabetes, and other illnesses by tracking the Nasdaq Healthcare Innovators Index. Holding 196 stocks in its basket, it charges 42 bps in annual fees. The product has accumulated $54.5 million in its asset base and trades in a meager average daily volume of about 2,000 shares. It has a Zacks ETF Rank #1 (read: What's Behind the Biotech ETF Rally to Start 2019?). First Trust Technology AlphaDEX Fund ( FXL - Free Report) – Up 19.2% This fund offers exposure to the broad technology sector using AlphaDEX methodology. In total, it holds 92 securities in its basket with AUM of $2 billion. The ETF trades in good average daily volume of 313,000 shares and charges 63 bps in fees per year. It has a Zacks ETF Rank #2 with a Medium risk outlook. SPDR S&P Aerospace & Defense ETF ( XAR - Free Report) – Up 19% It offers equal-weight exposure to 32 stocks by tracking the S&P Aerospace & Defense Select Industry Index. It has been able to manage $1.4 billion in its asset base, while trades in average daily volume of around 195,000 shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>