ETF sectors and rotation

The recent tech and cryptocurrency sell-off are sparking more fear of market volatility ahead, putting value-based ETFs in focus. Value equities can help mute the volatility with their decreased sensitivity to extreme market swings.

Value stocks and related ETFs have maintained their momentum on Friday, as the markets pushed higher for a second consecutive session.

Bank stocks and sector-related exchange traded funds are attracting more attention as investors capitalize on areas that benefit from the broad economic recovery. Year-to-date, the Invesco KBW Regional Bank Portfolio (NYSEArca: KBWR)  has advanced 38.9% while the  SPDR S&P Bank ETF (NYSEArca: KBE) increased 33.4%.

As U.S. markets rebound, investors can consider value exchange traded funds to ride the ongoing shifts. Signs that inflation may gaining momentum have put markets on edge, especially pressuring shares in the priciest segments like growth.

Value stocks are generating plenty of attention this year. Many market observers believe that trend should extend to mid- and small-cap fare. That could be a sign that the already formidable Invesco S&P MidCap 400 Pure Value ETF (RFV) can build on its 2021 momentum.

Economically sensitive market segments are taking the lead on the first trading day of May. Economic growth is picking up in most developed countries, and the strong corporate earnings season and positive outlook have also added to the broad market optimism, the  Wall Street Journal reports.

Investors late to the value party don’t always need to fret. Value action may just be getting started, indicating it’s not too late to examine the already hot Invesco S&P 500® Pure Value ETF (RPV ) . RPV follows the S&P 500® Pure Value Index.

The notion of a commodity supercycle is exciting for commodity investors. The term supercycle is used for a bull run that may extend for many years. 

When looking to allocate funds to the consumer goods or services sectors, one pair of funds worth considering is the Invesco S&P SmallCap Consumer Discretionary ETF (PSCD) and the Invesco S&P SmallCap Consumer Staples ETF (PSCC).

The ongoing rotation into value stocks has not abated as exchange traded fund investors continue to trim exposure from the growth style. Looking at latest GTS Mischler Financial Group data for the week ended April 5, the  Invesco QQQ Trust (NASDAQ: QQQ) , which tracks the technology heavy Nasdaq-100, suffered $3.7 billion in net outflows, ARK Innovation ETF (NYSEArca: ARKK)  saw $682 million in net outflows, and iShares MSCI EAFE Growth Index (NYSEArca: EFG) experienced $636 million in net outflows.

Inflation is top of mind right now for many consumers, businesses and investors. Responding to a recent Bank of America survey, asset managers around the world agreed that  inflation is the number one market risk,  displacing COVID-19 for the first time since February 2020.

Infrastructure and clean energy ETFs have been the early beneficiaries of a Joe Biden presidency thus far this year. An infrastructure package that will incorporate climate change initiatives can especially help this pair of iShares ETFs. 

We have shown similar tables in previous updates, but Canterbury Ranks and Rates securities on a risk-adjusted basis according to our Volatility-Weighted-Relative-Strength (VWRS). It allows all securities to be put on an equal playing field when it comes to measuring relative strength in conjunction with volatility.