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5 ETFs That Benefited the Most from the Market Rebound
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After the historic sell-off since the financial crisis, Wall Street rebounded on hopes of fiscal stimulus to curb slower economic growth due to the coronavirus outbreak.
President Donald Trump is looking to freeze payroll taxes on workers for the rest of this year and offer some form of relief to U.S. shale producers facing significant challenges after a brutal drop in oil prices. The potential tax incentives will come on top of an $8.3 billion spending package Trump signed last week. Additionally, the White House plans to aid airlines and cruise companies, two especially hard-hit industries (read: Is Recession Knocking at the Door? ETF Strategies to Follow).
Further, the bets of further easing from the Federal Reserve added to the strength. According to CME Group, there is a more than 50% chance that the Fed would step in with at least 50 basis points of rate cuts by the end of their April policy-setting meeting.
Given the positive sentiments, the three major indices climbed nearly 4% at the close on Mar 10. While most of the corners rallied, we have highlighted those ETFs that gained most on the day.
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) – Up 21.5%
The stimulus optimism coupled with expectations that U.S. producers will cut output has led to huge gains in the oil price and the energy sector. In particular, XOP has been the biggest winner, climbing 21.5% on the day. This fund provides exposure to oil and gas exploration companies by tracking the S&P Oil & Gas Exploration & Production Select Industry Index. It has amassed $2.2 billion and holds 57 securities in its basket. The product charges 35 bps in annual fees and trades in average volume of 33.1 million shares per day. It has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook (read: Bull & Bear Tug of War for Oil: ETFs in Focus).
The huge volatility in the stock market has raised the appeal for dividend stocks. As such, LEAD was up 9.9% on Mar 10. This fund invests in only the anticipated dividend growth leaders, the large-cap companies with the highest probability of increasing dividends in the next 12 months. It follows the Reality Shares DIVCON Leaders Dividend Index, holding 61 stocks in its basket. The product has amassed $31.1 million in its asset base and charges 43 bps in annual fees. It trades in average daily volume of 11,000 shares and has a Zacks ETF Rank #3 (Hold).
iShares MSCI Global Metals & Mining Producers ETF (PICK - Free Report) – Up 9%
This ETF gained 9% as stimulus will drive global growth and in turn manufacturing and industrial demand. It offers exposure to global metals and mining stocks (excluding gold and silver) and follows the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index. The fund holds 207 stocks in its basket with heavy concentration on the top two firms. United Kingdom, Australia and United States are the top three countries with 24.6%, 20.1% and 9.5%, respectively. The product has amassed $181.6 million in its asset base while charging 39 bps in annual fees. It trades in volume of 102,000 shares per day on average.
Global X Internet of Things ETF (SNSR - Free Report) – Up 7.9%
The Internet of Things (IoT) has been one of the hottest themes in the current digitalization world and is grabbing a lot of attention given the rapid advancements in communications technology and the growing adoption of 5G technologies. This fund, which gained 7.9% on the day, seems to be immune to all the market gyrations. It follows the Indxx Global Internet of Things Thematic Index and provides exposure to companies that stand to benefit from the broader adoption of the IoT as enabled by technologies such as WiFi, 5G telecommunications infrastructure, and fiber optics. Holding 52 stocks, it is moderately concentrated across components with each holding less than 10.5% of the assets. The product has accumulated $138.7 million in AUM and sees average daily volume of around 62,000 shares. Expense ratio comes in at 0.68% (read: Best Thematic ETFs for 2020: Cloud, Internet of Things & More).
With the rebound in the stock market, U.S. bond yields also climbed as fears eased. In fact, the 10-year Treasury yield saw its largest one-day climb since June 2009, leading to a rally in the banking sector. While most of the bank ETFs rose, KBWB benefited the most with 7.3% gains. This fund provides exposure to 24 companies primarily engaged in U.S. banking activities by tracking the KBW Nasdaq Bank Index. It is concentrated on the top five firms that make up for more than 7% share each. The fund has managed $401 million in its asset base and trades in solid volume of 285,000 shares per day on average. It charges 35 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Should You Buy Bank ETFs Now? Let's Find Out).
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5 ETFs That Benefited the Most from the Market Rebound
After the historic sell-off since the financial crisis, Wall Street rebounded on hopes of fiscal stimulus to curb slower economic growth due to the coronavirus outbreak.
President Donald Trump is looking to freeze payroll taxes on workers for the rest of this year and offer some form of relief to U.S. shale producers facing significant challenges after a brutal drop in oil prices. The potential tax incentives will come on top of an $8.3 billion spending package Trump signed last week. Additionally, the White House plans to aid airlines and cruise companies, two especially hard-hit industries (read: Is Recession Knocking at the Door? ETF Strategies to Follow).
Further, the bets of further easing from the Federal Reserve added to the strength. According to CME Group, there is a more than 50% chance that the Fed would step in with at least 50 basis points of rate cuts by the end of their April policy-setting meeting.
Given the positive sentiments, the three major indices climbed nearly 4% at the close on Mar 10. While most of the corners rallied, we have highlighted those ETFs that gained most on the day.
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) – Up 21.5%
The stimulus optimism coupled with expectations that U.S. producers will cut output has led to huge gains in the oil price and the energy sector. In particular, XOP has been the biggest winner, climbing 21.5% on the day. This fund provides exposure to oil and gas exploration companies by tracking the S&P Oil & Gas Exploration & Production Select Industry Index. It has amassed $2.2 billion and holds 57 securities in its basket. The product charges 35 bps in annual fees and trades in average volume of 33.1 million shares per day. It has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook (read: Bull & Bear Tug of War for Oil: ETFs in Focus).
DIVCON Leaders Dividend ETF (LEAD - Free Report) – Up 9.9%
The huge volatility in the stock market has raised the appeal for dividend stocks. As such, LEAD was up 9.9% on Mar 10. This fund invests in only the anticipated dividend growth leaders, the large-cap companies with the highest probability of increasing dividends in the next 12 months. It follows the Reality Shares DIVCON Leaders Dividend Index, holding 61 stocks in its basket. The product has amassed $31.1 million in its asset base and charges 43 bps in annual fees. It trades in average daily volume of 11,000 shares and has a Zacks ETF Rank #3 (Hold).
iShares MSCI Global Metals & Mining Producers ETF (PICK - Free Report) – Up 9%
This ETF gained 9% as stimulus will drive global growth and in turn manufacturing and industrial demand. It offers exposure to global metals and mining stocks (excluding gold and silver) and follows the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index. The fund holds 207 stocks in its basket with heavy concentration on the top two firms. United Kingdom, Australia and United States are the top three countries with 24.6%, 20.1% and 9.5%, respectively. The product has amassed $181.6 million in its asset base while charging 39 bps in annual fees. It trades in volume of 102,000 shares per day on average.
Global X Internet of Things ETF (SNSR - Free Report) – Up 7.9%
The Internet of Things (IoT) has been one of the hottest themes in the current digitalization world and is grabbing a lot of attention given the rapid advancements in communications technology and the growing adoption of 5G technologies. This fund, which gained 7.9% on the day, seems to be immune to all the market gyrations. It follows the Indxx Global Internet of Things Thematic Index and provides exposure to companies that stand to benefit from the broader adoption of the IoT as enabled by technologies such as WiFi, 5G telecommunications infrastructure, and fiber optics. Holding 52 stocks, it is moderately concentrated across components with each holding less than 10.5% of the assets. The product has accumulated $138.7 million in AUM and sees average daily volume of around 62,000 shares. Expense ratio comes in at 0.68% (read: Best Thematic ETFs for 2020: Cloud, Internet of Things & More).
Invesco KBW Bank ETF (KBWB - Free Report) – Up 7.3%
With the rebound in the stock market, U.S. bond yields also climbed as fears eased. In fact, the 10-year Treasury yield saw its largest one-day climb since June 2009, leading to a rally in the banking sector. While most of the bank ETFs rose, KBWB benefited the most with 7.3% gains. This fund provides exposure to 24 companies primarily engaged in U.S. banking activities by tracking the KBW Nasdaq Bank Index. It is concentrated on the top five firms that make up for more than 7% share each. The fund has managed $401 million in its asset base and trades in solid volume of 285,000 shares per day on average. It charges 35 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Should You Buy Bank ETFs Now? Let's Find Out).
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 >>