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Wall Street saw a wobbly start to May 2020 much in line with the old adage “sell in May and go away,” only to end the month on a solid note. President Trump’s renewed threat of punitive measures against China on Hong Kong unrest and mishandling of the coronavirus incident caused occasional weakness at Wall Street at the end of the month.
Otherwise, the broader market was upbeat due to rising hopes for a COVID-19 vaccine and the reopening of economies. The S&P 500 (up 3.6% past month), the Dow Jones (up 3.1% past month), the Nasdaq (up 5.1% past month) and the Russell 2000 (up 2.9% past month) – were all in the green (as of May 29, 2020).
Let’s take a look at the winning ETF areas.
Energy
After crashing in mid-April, oil prices recovered in May on an improved demand outlook based on the reopening of economies. In fact, WTI crude oil spiked 88% in May, marking its best monthly performance since 1983, according to data from Bloomberg.
Shares of cannabis-related stocks and ETFs surged lately following a report that some strains of medical marijuana are proving effective to treat coronavirus. The report indicates that medicinal marijuana could block up to 70% of the proteins used by the virus to infect cells.
If this was not enough, Canada’s Aurora Cannabis has agreed to buy U.S.-based CBD company Reliva in May, in order to enter the U.S. market. According to the Brightfield Group research firm, CBD sales are projected to surge to $24 billion in U.S. retail sales by 2025, as quoted on CNBC.
Pot stocks became a winner in pandemic as many cannabis dispensaries received “essential business” designations amid widespread COVID-19-related lockdowns and store closures. As a result, consumers hoarded medicinal and recreational cannabis.
Cloud computing is seeing increasing usage globally amid the strengthening work-and-learn-from culture in the wake of the coronavirus outbreak. Going by a global CIO survey, around 79% of the polled groups aim to start using cloud technology in 2020. Moreover, per LearnBonds data, the global cloud IT infrastructure spending is projected at $69.2 billion for the ongoing year, up 3.6% year over year. No doubt, WisdomTree Cloud Computing Fund (WCLD - Free Report) became a rightful gainer (up 22.5%) (read: Cloud Computing ETFs to Gain on the New Normal Trends).
Homebuilding
The home-building sector has suffered a lot amid COVID-19. However, things are looking up lately. Per real estate brokerage Redfin, home-buying demand has come back with forceand is now 16.5% above pre-coronavirus levels on a seasonally adjusted basis, helped by record-low mortgage rates. Inventories failed to meet demand.
Low mortgage rates, likely decline in home prices in the near future, post-pandemic “suburban revival,” millennial-led demographics, decent credit conditions of the sector players and cheaper valuation have resulted in a 20.3% uptick in iShares U.S. Home Construction ETF (ITB - Free Report) .
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4 ETF Areas Up At Least 20% in May
Wall Street saw a wobbly start to May 2020 much in line with the old adage “sell in May and go away,” only to end the month on a solid note. President Trump’s renewed threat of punitive measures against China on Hong Kong unrest and mishandling of the coronavirus incident caused occasional weakness at Wall Street at the end of the month.
Otherwise, the broader market was upbeat due to rising hopes for a COVID-19 vaccine and the reopening of economies. The S&P 500 (up 3.6% past month), the Dow Jones (up 3.1% past month), the Nasdaq (up 5.1% past month) and the Russell 2000 (up 2.9% past month) – were all in the green (as of May 29, 2020).
Let’s take a look at the winning ETF areas.
Energy
After crashing in mid-April, oil prices recovered in May on an improved demand outlook based on the reopening of economies. In fact, WTI crude oil spiked 88% in May, marking its best monthly performance since 1983, according to data from Bloomberg.
United States Brent Oil Fund LP (BNO - Free Report) (up 55.9%), United States Oil Fund LP (USO - Free Report) (up 46.89%), SPDR SP Oil Gas Equipment Services ETF XES) (up 25.1%), InfraCap MLP ETF (AMZA - Free Report) (up 25.1%) and VanEck Vectors Oil Services ETF (OIH - Free Report) (up 21.6%) were among the winners(read: Oil Price Rebound, USO ETF & More).
Cannabis
Shares of cannabis-related stocks and ETFs surged lately following a report that some strains of medical marijuana are proving effective to treat coronavirus. The report indicates that medicinal marijuana could block up to 70% of the proteins used by the virus to infect cells.
If this was not enough, Canada’s Aurora Cannabis has agreed to buy U.S.-based CBD company Reliva in May, in order to enter the U.S. market. According to the Brightfield Group research firm, CBD sales are projected to surge to $24 billion in U.S. retail sales by 2025, as quoted on CNBC.
Pot stocks became a winner in pandemic as many cannabis dispensaries received “essential business” designations amid widespread COVID-19-related lockdowns and store closures. As a result, consumers hoarded medicinal and recreational cannabis.
Global X Cannabis ETF (up 27.7%), The Cannabis ETF (up 26.96%) and AdvisorShares Pure Cannabis ETF (YOLO - Free Report) (up 26.87%) gained the most in the segment (read: Cannabis ETF Tops in May: 5 Stocks That Led The Way).
Cloud Computing
Cloud computing is seeing increasing usage globally amid the strengthening work-and-learn-from culture in the wake of the coronavirus outbreak. Going by a global CIO survey, around 79% of the polled groups aim to start using cloud technology in 2020. Moreover, per LearnBonds data, the global cloud IT infrastructure spending is projected at $69.2 billion for the ongoing year, up 3.6% year over year. No doubt, WisdomTree Cloud Computing Fund (WCLD - Free Report) became a rightful gainer (up 22.5%) (read: Cloud Computing ETFs to Gain on the New Normal Trends).
Homebuilding
The home-building sector has suffered a lot amid COVID-19. However, things are looking up lately. Per real estate brokerage Redfin, home-buying demand has come back with forceand is now 16.5% above pre-coronavirus levels on a seasonally adjusted basis, helped by record-low mortgage rates. Inventories failed to meet demand.
Low mortgage rates, likely decline in home prices in the near future, post-pandemic “suburban revival,” millennial-led demographics, decent credit conditions of the sector players and cheaper valuation have resulted in a 20.3% uptick in iShares U.S. Home Construction ETF (ITB - Free Report) .
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 >>