Tag: ETF sectors and rotation

Many diversified infrastructure exchange traded funds feature healthy allocations to the utilities sector, but investors looking to play a new round of massive infrastructure spending with utilities stocks may want to go straight to the source.

The utilities sector usually performs admirably when interest rates are low, but the Utilities Select Sector SPDR (NYSEArca: XLU) is up just 4.80% year-to-date, well behind the 17.67% returned by the S&P 500 Index as a whole, as of June 24.

The reflation trade is a phrase generating plenty of buzz this year, and while it’s taking some lumps in recent weeks, some market observers believe it will regain momentum before 2021 concludes. Alone, that’s notable, but making a potential reflationary resurgence worth watching (and participating in) is the sector-level implications that come along with it.

On Behind the Markets , a podcast brought to you by Jeremy Schwartz, WisdomTree’s Global Head of Research, we talk to market strategists, business executives and financial advisors about important trends in the financial markets.

As rail companies come out with strong quarterly earnings and gain steam on the economic reopening, investors could look to transportation exchange traded funds to capture the expanding economic activity. An index of the largest U.S. freight rail companies just enjoyed its best three-day advance since March, outperforming the S&P 500 after Canadian National Railway Co., CSX Corp., and Union Pacific Corp. reported quarterly earnings week, Bloomberg reports.

The VanEck Vectors Oil Services ETF (NYSEArca: OIH) is retreating due to a sharp pullback in oil prices, but the famed oil services exchange traded fund could be primed for a rebound. There’s no denying that the proliferation of COVID-19 cases around the world due to the new delta variant is hampering oil prices.

Travel industry exchange traded funds led the market rebound on Tuesday after the Covid-19 Delta variant dealt a blow to the leisure and entertainment sectors. Among the best-performing non-leveraged ETFs of Tuesday, the U.S. Global Jets ETF (NYSEArca: JETS) increased 5.5% and the  AdvisorShares Hotel ETF (BEDZ) increased 4.5%.

Exchange traded fund investors may be gearing up for a turnaround in the healthcare sector. Healthcare stocks have been underperforming. The Health Care Select Sector SPDR ETF (NYSEArca: XLV)  has gained 13.9% year-to-date while the S&P 500 has increased 17.1%.

With the S&P MidCap 400 Index up almost 17% year-to-date, it’s hard to argue with the returns offered by mid cap equities. However, after that run for middle-class equities, investors may want to consider elevating quality in the asset class.

Value stocks and related exchange traded funds climbed Wednesday as major indices closed out the quarter near record highs, following a rally in the growth style over July. “We’ve seen a significant preference for cyclicals through May, and in June we’ve seen a major preference shift to growth, or ‘tech-plus stocks,’” Tim Ghriskey, chief investment strategist at Inverness Counsel, told Reuters.“It’s been a dramatic change.”

Nearly halfway through 2021, it’s widely known that oil prices are rising, supporting energy’s status as the best-performing sector in the S&P 500. That’s particularly notable considering the sector’s rough go of things in 2020. Investors tapping into the energy rebound via exchange traded funds should remember that structure matters and how an ETF is structured leads to a variety of outcomes.

Amid the much ballyhooed cyclical stock resurgence, the materials sector is performing admirably this year. The S&P 500 Materials Index is higher by almost 14% year-to-date. Within that space, metals and mining equities are driving upside, and some analysts believe that scenario has durability, all good news for the Invesco DWA Basic Materials Momentum ETF (PYZ) .

The global economy is changing, yet many investors seem to have static portfolios. The ongoing popularity of the so-called “secular growers” despite the stocks’ meaningful underperformance as the economy has started to change indicates investors generally have not understood the powerful secular macroeconomic forces fueling those stocks.

Europe’s first ETF exclusively targeting companies within the global travel industry is set for its maiden voyage. TRYP / TRIP provides exposure to firms linked to the airline, hotels, and cruise lines industries. The Airlines, Hotels and Cruise Lines ETF will list on London Stock Exchange on 9 June and will be available in US dollar ( TRYP LN ) and pound sterling ( TRIP LN ) share classes.