Last week was upbeat for Wall Street with the S&P 500, the Nasdaq Composite and the Dow Jones adding about 4.4%, 6.4% and 2.8%, respectively. Solid jobs data for the month of May, reopening of global economies, further stimulus announcement from the ECB,signs of recovery in the U.S. manufacturing activity – all led to the market rally last week.
Against this backdrop, below we have highlighted a few ETF areas that have gained last week.
Leisure U.S. Global Jets ETF ( JETS Quick Quote JETS - Free Report) , the only pure-play ETF dedicated to the airline industry, was a massive sufferer in the coronavirus-led lockdown, but surged higher on the reopening of economies. The fund was the top performer last week with about 33.1% gain. Notably, more than 1.5 million passengers passed through airport security checkpoints during the Memorial Day weekend, which benefited the airlines ETF materially.
Per a Bloomberg article, several corporations are easing travel restrictions in states like Texas and Florida that have relaxed quarantine measures. Moreover, with summer vacations approaching, flights are being booked to several domestic leisure destinations (read:
Airlines ETF & Stocks Ride the Rebound in Travel Demand). Energy
Oil price has risen sharply after the historic collapse in April led by improving demand and supply dynamics. Reopening of economies and the resultant rise in demand, protraction of the OPEC+ output cut deal and an easing supply glut led to the jump in oil prices.
OPEC, Russia and allies agreed on Jun 6 to extend record oil production cuts until the end of July, prolonging a deal that helped crude prices double in the past two months by cutting back almost 10% of global supplies from the market. OPEC+ also demanded countries such as Nigeria and Iraq, which surpassed production quotas in May and June, to make up with extra cuts in July to September.
VanEck Vectors Oil Services ETF ( OIH Quick Quote OIH - Free Report) (up 30%), SPDR S&P Oil & Gas Equipment & Services ETF XES) (up 30%) and iShares U.S. Oil Equipment & Services ETF ( IEZ Quick Quote IEZ - Free Report) (up 23.7%) are examples of the winning energy ETFs of last week (read: 5 Energy ETFs Look Solid on Rank Upgrade, Oil Price Rise). REIT
REIT ETFs have also emerged a reopening winner and saw massive job gains in May. Chances of a V-shaped post-pandemic economic recovery helped REIT stocks and ETFs.
Invesco KBW Premium Yield Equity REIT ETF ( KBWY Quick Quote KBWY - Free Report) gained 28.2% last week. The fund’s yield is as high as 9.96% annually, which seems lucrative at the current low-yield environment. Commodity GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN gained 25.5% last week. Energy (55.99%), Agriculture (21.03%), Industrial Metals (9.57%), Livestock (8.19%) and Precious Metals (5.23%) are the top five investing areas of the product. Several corners of the product, including energy and metals, rallied last week, explaining the rally in GSG. High-Beta Innovator Lunt Low Vol/High Beta Tactical ETF (up 21.3%) and Invesco S&P 500 High Beta ETF ( SPHB Quick Quote SPHB - Free Report) (up 20.9%) were among the top-performing ETF areas last week. Risk-on-trade sentiments and a sign of fast post-pandemic recovery supported high-beta trade last week. Notably, high-beta funds tend to rise or fall more than the stock market (read: 5 High-Beta ETFs Available at a Bargain). Want key ETF info delivered straight to your inbox?
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