Midway through the first quarter of 2020, Wall Street has been on a strong run, hitting new record highs on several occasions. Better-than-expected earnings, positive development in the U.S.-China trade relationship, China stimulus measures, easing policies and slew of upbeat economic data buoyed the stocks.
In fact, the bulls bravely escaped the Middle East tensions in January, and the ongoing epidemic of coronavirus, which could lead to global slowdown. The solid trend is likely to continue, at least in the near term, given the resurgence of investors’ confidence in the economy (read: 6 Leveraged ETFs That Gained More Than 25% at Halfway Q1).
The U.S. economy has been resilient and could continue to grow moderately this year. The labor market was off to a strong start in 2020, creating 225,000 new jobs in January. The manufacturing sector, which had languished in contraction territory for five months, rebounded strongly in January and services sector activity also picked up, with industries reporting increase in new orders. Moreover, retail sales strengthened for a fourth consecutive month and homebuilder sentiment is hovering near the highest level since 1999.
Meanwhile, U.S. consumer sentiment, as recorded by the University of Michigan’s consumer sentiment index, came in higher than expected for February despite the coronavirus outbreak.
While there have been winners in many corners of the space, several ETFs have easily crushed the market by wide margins this year and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Below, we have presented a bunch of top-performing ETFs so far this quarter that are likely to continue outperforming, should the trends prevail.
Invesco Solar ETF (TAN - Free Report) – Up 35.9%
This ETF offers global exposure to 22 solar stocks by tracking the MAC Global Solar Energy Index. U.S. firms dominate the fund’s portfolio with nearly 49.5% share, followed by China (21.8%) and Spain (7.3%). The product has amassed $248 million in its asset base and charges investors 71 basis points (bps) in fees per year. It has a Zacks ETF Rank #2 (read: Sector ETFs at the Midpoint in Q1: Hits & Misses).
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report) – Up 25%
This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $245 million. It charges 60 bps in fees per year while trading in light volume of around 46,000 shares per day. In total, the product holds 43 securities and has a Zacks ETF Rank #2 with a High risk outlook (read: Beyond Earnings, Is It Tesla That is Energizing Clean ETFs?).
SPDR NYSE Technology ETF (XNTK - Free Report) – Up 14.4%
This product provides exposure to purely electronics-based technology companies by tracking the NYSE Technology Index. It holds 35 stocks in its basket and trades in average daily volume of 27,000 shares. The ETF has amassed $387.8 million and charges 35 bps in annual fees. It has a Zacks ETF Rank #1.
iShares Expanded Tech-Software Sector ETF (IGV - Free Report) – Up 13.2%
This ETF provides exposure to software companies in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. The fund holds a basket of 102 securities and charges 46 bps in annual fees. It is popular with AUM of $3.7 billion and volume is good as it exchanges nearly 609,000 shares a day. The product has a Zacks ETF Rank #1 with a High risk outlook.
Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 13%
This fund follows the Dorsey Wright Technology Technical Leaders Index and provides exposure to technology companies that are showing relative strength (momentum). Holding 43 stocks in the basket, it is illiquid and relatively unpopular with AUM of $225.9 million and average daily volume of 39,000 shares. The product has a Zacks ETF Rank #2 with a High risk outlook.
First Trust Cloud Computing ETF (SKYY) – Up 12.8%
This fund provides exposure to cloud-computing securities by tracking the ISE Cloud Computing Index. Holding about 63 stocks in the basket, the product has been able to manage $2.6 billion in its asset base while seeing a good volume of about 195,000 shares a day. It has 0.60% in expense ratio and a Zacks ETF Rank #2 with a Medium risk outlook (read: 3 ETFs to Profit from Explosive Growth of Cloud Computing).
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