Though the start of the New Year saw geopolitical tensions, Wall Street has been on its hottest streak with the S&P 500 hitting a new record. The hopes of de-escalating tensions in the Middle East have maintained complacency in the market.
This is especially true as President Donald Trump’s comments eased fears of an all-out conflict in the Middle East following retaliatory missile strikes on U.S. military compounds in Iraq (read: 5 Multi-Asset ETFs to Counter Volatility & Enjoy Solid Yields).
The Fed’s accommodative interest rate policy, a resilient domestic economy and hopes of a phase one deal signing next week has been driving stocks higher. The U.S. economy is on a strong growth path with job additions at the fastest pace and unemployment dropping to the lowest level since 1969. The housing market is also clearly showing signs of a strong recovery with lower mortgage rates and slower home price growth acting as catalysts.
While there have been winners in many corners of the space, we highlight five ETFs from different zones that have been outperforming to start 2020. The trend is likely to continue, provided the fundamentals remain intact.
ARK Web x.0 ETF (ARKW - Free Report) – Up 5.9%
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 41 stocks in its basket. It has amassed $444.8 million in its asset base and its expense ratio is 0.75%.
Global X Cybersecurity ETF (BUG - Free Report) – Up 5.7%
This ETF seeks to invest in companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is development and management of security protocols preventing intrusion and attacks to systems, networks, applications, computers and mobile devices. This can be easily done by the Indxx Cybersecurity Index. Holding 31 securities in its basket, BUG has amassed $1.7 million in its asset base and charges 50 bps in annual fees.
MicroSectors FANG+ ETN (FNGS - Free Report) – Up 5.5%
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly-traded growth stocks of next generation technology and tech-enabled companies. It holds 10 stocks in its basket and has accumulated $57.1 million in its asset base within two months of debut. The product charges 58 bps in annual fees (read: Tesla Reports Record Q4 Deliveries: ETFs to Ride the Surge).
SPDR S&P Aerospace & Defense ETF (XAR - Free Report) – Up 4.8%
XAR offers equal-weight exposure to 33 companies in the aerospace & defense segment. It follows the S&P Aerospace & Defense Select Industry Index, charging 35 bps in annual fees from investors. The fund has been able to manage $2.1 billion in its asset base and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Aerospace & Defense ETF Hits New 52-Week High).
Global X MLP ETF (MLPA - Free Report) – Up 3.7%
This product invests in some of the largest, most liquid midstream Master Limited Partnerships (MLPs) by tracking the Solactive MLP Infrastructure Index. It charges 45 bps in fees per year and has AUM of 1.2 billion.
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