Top 5 ETF Areas of Last Week
The first week of March was mixed for Wall Street.The S&P 500 (up 0.81%), the Dow Jones (up 1.82%), the Nasdaq Composite(down 2.1%) and the small-cap Russell 2000 (down 0.40%) were all on a volatile ride due to rising rate worries (read: Top ETF Stories of February Worth Watching in March).
On a positive development, just before the last week started, on Feb 27, the United States sanctioned Johnson & Johnson's (JNJ) COVID-19 vaccine for emergency use, giving the nation a third shot at fighting the outbreak after BioNTech/Pfizer and Moderna (read: How to Trade USFDA's EUA to J&J Vaccine With ETFs).
Such back-to-back releases of vaccines helped the risk-on trade sentiments even further, pushing bond yields higher. Against this backdrop, below we highlight a few ETF areas that won last week.
Dry Bulk Shipping
This area has been on a winning streak. The pickup in global economic growth has supported the dry bulk shipping rates. Gradually rising demand across all vessel categories have probably aided the area and the related fund (read: Top & Flop Zones of 2020 and Their ETFs).
Breakwave Dry Bulk Shipping ETF BDRY has added about 27.9% past week. The underlying index of the fund Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC measures rates for shipping dry bulk freight. It provides exposure to the dry bulk shipping market through a portfolio of near-dated freight futures contracts on dry bulk indices.
Energy
Last week was great for energy stocks. Oil prices have staged a rally lately with United States Oil Fund LP USO and United States Brent Oil Fund LP (BNO) adding about 9% each last week. A host of factors aided the rally. Growing vaccine distribution and hopes of hefty stimulus under the Biden presidency along with a dovish Fed boosted hopes of a sooner-than-expected return to normalcy.
This, in turn, boosted the oil prices. Credit Suisse S&P MLP Index ETN MLPO (up 17.2%), Infracap MLP ETF (AMZA) (up 13.9%) and Natural Gas ETF First Trust (FCG) (up 13.5%) were the winners (read: Sector ETFs to Benefit/Lose as Oil May Hit $70 Soon).
Small-Caps
The small-cap section is the biggest beneficiary of the vaccine and stimulus rally. Invesco S&P Smallcap Value With Momentum ETF XSVM (up 7.24%) andS&P Smallcap 600 Pure Value Invesco ETF (RZV) (up 8.6%) were the winners in the week.
Banking
Banks have been a beneficiary of the current jump in long term interest rates. As banks seek to borrow money at short-term rates and lend at long-term rates, a steepening yield curve will earn more on lending and pay less on deposits, thereby leading to a wider spread. This will expand net margins and increase banks’ profits. QTEC First Trust ETF QABA added about 7% last week.
Steel Company
Steel prices have risen massively in recent months as indicated in the manufacturing survey. This metal has been a direct beneficiary of the economic rebound (read: U.S. Manufacturing at 3-Year High: ETFs in Focus).
This makes Steel Vaneck ETF SLX a great winner. The 24-stock fund looks to track the overall performance of companies involved in the steel sector. The fund added 6.8% last week.
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United States Oil ETF (USO): ETF Research Reports
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