4 Sector ETFs That Have Doubled This Year
The year 2020 has so far been full of twists and turns. After a solid rally in February, Wall Street slipped into the bear market in late March in the fastest-ever move. Then, the stocks made a solid comeback with new peaks reached in early September. However, the rally fizzled thereafter and some strength resumed in recent weeks.
The strong performance was powered by prolonged support by the central bank to contain the pandemic, hopes of a swift economic rebound, progress to develop treatments and vaccines for COVID-19, and a flurry of deal activity. However, COVID-19 pandemic, lofty valuations, rising U.S.-China tensions and election uncertainty continued to weigh on the stocks.
While there have been winners in many corners of the space, we highlight four sector ETFs that have doubled so far this year:
Invesco Solar ETF TAN – Up 131.2%
This ETF have been burning hot this year buoyed by the presumptive Democratic presidential candidate Joe Biden’s push for the $2 trillion infrastructure plan, which aims to spur tens of thousands of new wind turbines and millions of new solar panels across the United States to rapidly achieve zero-carbon energy (read: Green Energy on Spotlight Ahead of Election: Best ETFs YTD).
TAN offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 32 stocks in the basket. It is moderately concentrated on components with each making up for not more than 11.5% of the assets. U.S. firms dominate the fund’s portfolio with nearly 46.1% share, followed by China (27%) and Germany (5.3%). The product has amassed $1.5 billion in its asset base and trades in a solid volume of around 1.2 million shares a day. It charges investors 71 basis points in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
iPath S&P 500 Dynamic VIX ETN XVZ – Up 110.5%
Volatility products have been the winners due to heightened market volatility. XVZ tracks the S&P 500 Dynamic VIX Futures Total Return Index, which is designed to dynamically allocate between the S&P 500 VIX Short-Term Futures Index Excess Return and the S&P 500 VIX Mid-Term Futures Index Excess Return by monitoring the relative implied volatility of the S&P 500 Index at various points along the volatility forward curve. This ETN is unpopular and illiquid with AUM of $10.3 million and an average daily volume of 4,000 million shares. The note charges 95 bps in annual fees.
ARK Next Generation Internet ETF ARKW – Up 104%
The COVID-19 pandemic has driven the e-commerce boom and changed the consumer landscape to a purely digital one. People may choose to stay indoors in order to avoid direct contact, which in turn would boost demand for cloud computing, gaming, e-sports and streaming services. ARKW is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to cloud, enabling mobile, new and local services. The fund holds 51 stocks in its basket with AUM of $2.4 billion. It trades in an average daily volume of 738,000 shares and charges 76 bps in annual fees from investors (read: 5 Tech ETFs Driving the Market Rally This Year).
ARK Genomic Revolution Multi-Sector ETF ARKG – Up 102.1%
The biotech sector has been performing well driven by the progress in the development of a coronavirus vaccine or treatment, and waves of mergers and acquisitions. In fact, this actively managed ETF is focused on companies that are likely to benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments, and advancements in genomics into their business. With AUM of $2.3 billion, the fund holds 48 stocks in its basket and has 0.75% in expense ratio. It trades in an average daily volume of 935,000 shares (read: Why You Should Invest in Genomics ETFs).
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Invesco Solar ETF (TAN): ETF Research Reports
ARK Next Generation Internet ETF (ARKW): ETF Research Reports
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
iPath SP 500 Dynamic VIX ETN (XVZ): ETF Research Reports
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