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5 Top-Performing ETF Areas of April That Are Up At Least 25%
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The month of April was completely regulated by coronavirus on the global level. Enactment of lockdowns to curb contagions, injection of trillions of dollars into the countries’ financial system with the Fed and the U.S. government playing a key role, the biggest OPEC+ output cut deal to keep the black gold afloat amid lackluster demand, and ebbs and flows in the WTI crude market due to storage crisis were the most important happenings.
Meanwhile, talks of reopening of the U.S. economy following the improvement in virus cases and relentless research on treatments and vaccines have boosted Wall Street that slipped into a bear market in mid-March. Moderate-to-upbeat corporate earnings have also led to the market strength.
The S&P 500, the Dow Jones and the Nasdaq Composite added about 18.9%, 17.6% and 21.1% past month (as of Apr 29, 2020). Against this backdrop, below we highlight a few ETF areas that were the top-performers in April and added in the range of 25% to 85%.
Natural Gas
Natural gas prices have been on a tear in April on dual tailwinds of oil crash and inclement weather. Oil prices fell to the floor in mid-April due to weak demand caused by coronavirus-led lockdowns, still-ample supplies and most-importantly storage crisis.
The oil collapse did wonders for natural gas. Per some analysts, with the shutting-in of oil wells (due to low prices), producers will also lose on some associated natural gas production. Plus, the forecast of inclement weather, both on the east and west coast, boosted demand for natural gas in the month.
As a result, First Trust Natural Gas ETF (FCG - Free Report) , which comprises companies that derive a substantial portion of their revenues from the exploration and production of natural gas, skyrocketed more than 85% in the month.
MLPs
Several infrastructure MLPs generally earn the majority of their cash flow from the transportation and storage of energy commodities. Due to its contributions toward storage, MLPs benefited in the month. MLPs earn profits from the quantity of oil and natural gas they are transporting. Plus, MLPs are high-dividend in nature. The recovery of the oil prices at the end of the month also bodes well for the space.
InfraCap MLP ETF (AMZA - Free Report) (up about 78.8%),Global X MLP ETF (MLPA - Free Report) (up 65.3%),UBS ETRACS Alerian MLP Index ETN (up 65.2%) and Alerian MLP ETF (AMLP - Free Report) (up 61.7%) are some of the top-performing ETFs.
Gold & Silver Mining
Gold mining companies are better-positioned than they’ve been in 10-20 years with low operating costs, healthy balance sheets, and attractive valuations, as per investment management firm VanEck.
The Fed’s super-dovish stance since March and the resultant moderate strength in the greenback, mammoth government stimulus, uptick in investors’ sentiments, lower oil prices, cheaper valuation and relatively low debt of the mining companies facilitated this spectacular performance (read: 5 Reasons Why Gold Mining ETFs & Stocks Have More Room to Run).
Sprott Gold Miners ETF (SGDM - Free Report) (up 42.2%), U.S. Global GO GOLD and Precious Metal Miners ETF GOAU(up 41.6%), Global X Gold Explorers ETF (GOEX - Free Report) (up 40.9%) and iShares MSCI Global Gold Miners ETF (RING - Free Report) (up 40.6%) were among the top performers.
Online Retail
Online shopping for groceries, food and essential items has become a mainstream in most parts of the globe amid lockdowns. In fact, non-store retail sales in March increased 3.1% sequentially and 9.7% year over year. Going by Signifyd’s Ecommerce Pulse data, there has been a 46% surge in overall e-commerce expenditures since late February. Amplify Online Retail ETF (IBUY - Free Report) added about 34.7% and ProShares Online Retail ETFONLN gained around 31.9% in the month.
Healthcare
Healthcare stocks and ETFs have been in investors’ favor amid the ongoing medical emergency. Large pharma and biotech companies are working on medicines, vaccines and testing kits. Most recently, Gilead (GILD - Free Report) indicated that the trial for coronavirus treatment Remdesivir has met its initial goal. Principal Healthcare Innovators Index ETF (BTEC - Free Report) (up 26.8%) and SPDR S&P Biotech ETF (XBI - Free Report) (up 26.8%) are among the prominent winners in this area.
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5 Top-Performing ETF Areas of April That Are Up At Least 25%
The month of April was completely regulated by coronavirus on the global level. Enactment of lockdowns to curb contagions, injection of trillions of dollars into the countries’ financial system with the Fed and the U.S. government playing a key role, the biggest OPEC+ output cut deal to keep the black gold afloat amid lackluster demand, and ebbs and flows in the WTI crude market due to storage crisis were the most important happenings.
Meanwhile, talks of reopening of the U.S. economy following the improvement in virus cases and relentless research on treatments and vaccines have boosted Wall Street that slipped into a bear market in mid-March. Moderate-to-upbeat corporate earnings have also led to the market strength.
The S&P 500, the Dow Jones and the Nasdaq Composite added about 18.9%, 17.6% and 21.1% past month (as of Apr 29, 2020). Against this backdrop, below we highlight a few ETF areas that were the top-performers in April and added in the range of 25% to 85%.
Natural Gas
Natural gas prices have been on a tear in April on dual tailwinds of oil crash and inclement weather. Oil prices fell to the floor in mid-April due to weak demand caused by coronavirus-led lockdowns, still-ample supplies and most-importantly storage crisis.
The oil collapse did wonders for natural gas. Per some analysts, with the shutting-in of oil wells (due to low prices), producers will also lose on some associated natural gas production. Plus, the forecast of inclement weather, both on the east and west coast, boosted demand for natural gas in the month.
As a result, First Trust Natural Gas ETF (FCG - Free Report) , which comprises companies that derive a substantial portion of their revenues from the exploration and production of natural gas, skyrocketed more than 85% in the month.
MLPs
Several infrastructure MLPs generally earn the majority of their cash flow from the transportation and storage of energy commodities. Due to its contributions toward storage, MLPs benefited in the month. MLPs earn profits from the quantity of oil and natural gas they are transporting. Plus, MLPs are high-dividend in nature. The recovery of the oil prices at the end of the month also bodes well for the space.
InfraCap MLP ETF (AMZA - Free Report) (up about 78.8%),Global X MLP ETF (MLPA - Free Report) (up 65.3%),UBS ETRACS Alerian MLP Index ETN (up 65.2%) and Alerian MLP ETF (AMLP - Free Report) (up 61.7%) are some of the top-performing ETFs.
Gold & Silver Mining
Gold mining companies are better-positioned than they’ve been in 10-20 years with low operating costs, healthy balance sheets, and attractive valuations, as per investment management firm VanEck.
The Fed’s super-dovish stance since March and the resultant moderate strength in the greenback, mammoth government stimulus, uptick in investors’ sentiments, lower oil prices, cheaper valuation and relatively low debt of the mining companies facilitated this spectacular performance (read: 5 Reasons Why Gold Mining ETFs & Stocks Have More Room to Run).
Sprott Gold Miners ETF (SGDM - Free Report) (up 42.2%), U.S. Global GO GOLD and Precious Metal Miners ETF GOAU (up 41.6%), Global X Gold Explorers ETF (GOEX - Free Report) (up 40.9%) and iShares MSCI Global Gold Miners ETF (RING - Free Report) (up 40.6%) were among the top performers.
Online Retail
Online shopping for groceries, food and essential items has become a mainstream in most parts of the globe amid lockdowns. In fact, non-store retail sales in March increased 3.1% sequentially and 9.7% year over year. Going by Signifyd’s Ecommerce Pulse data, there has been a 46% surge in overall e-commerce expenditures since late February. Amplify Online Retail ETF (IBUY - Free Report) added about 34.7% and ProShares Online Retail ETF ONLN gained around 31.9% in the month.
Healthcare
Healthcare stocks and ETFs have been in investors’ favor amid the ongoing medical emergency. Large pharma and biotech companies are working on medicines, vaccines and testing kits. Most recently, Gilead (GILD - Free Report) indicated that the trial for coronavirus treatment Remdesivir has met its initial goal. Principal Healthcare Innovators Index ETF (BTEC - Free Report) (up 26.8%) and SPDR S&P Biotech ETF (XBI - Free Report) (up 26.8%) are among the prominent winners in this area.
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 >>