4 Sector ETFs Up More Than 30% in First-Half 2020

Volatility triggered by the coronavirus outbreak played foul in the stock market throughout the first half 2020. After slipping into bear territory in March, Wall Street staged an astounding rebound buoyed by the development of a coronavirus vaccine or treatment, easing of lockdown measures and a massive stimulus program.

In particular, a series of fiscal and monetary stimulus measures from Washington and the Federal Reserve helped to calm stock markets and the economy from the deepest slump since the 1930s. The reopening of the economy has resulted in higher consumer confidence. The rounds of data indicate that the economy has been recovering faster than expected from the COVID-19 pandemic. Notably, U.S. consumer confidence logged in the biggest gain since 2011 in June. Additionally, a technology sector boom added to the strength (read: ).

Since hitting the Mar 23 low, the S&P 500 has surged 38% while the Dow Jones has climbed 38.5% and the Nasdaq Composite Index has rallied about 46%.

While many corners of the equity world witnessed a solid run, a few sector ETFs performed incredibly, thereby comfortably crushing the broader markets. Below we have highlighted four such ETFs from various industries that were the star performers in the first half and are likely to continue their outperformance if the current trends continue.

ARK Genomic Revolution Multi-Sector ETF ( -) – Up 55.6%

The COVID-19 pandemic has kept biotech players all over the world on their toes for a vaccine or a treatment. This new opportunity has made the sector the most attractive one to investors. ARKG is the biggest beneficiary of this trend, climbing 55.6%. This is an actively managed ETF, focusing on companies likely to benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments plus improvements and advancements in genomics into their business. With AUM of $1.3 billion, the fund holds 37 stocks in its basket and has 0.75% in expense ratio. It trades in average daily volume of 387,000 shares.

WisdomTree Cloud Computing Fund ( -) – Up 52.5%

The pandemic has also resulted in a dramatic shift in consumer behavior toward the digital world. This is because stay-at-home orders have boosted demand for work and entertainment from home, spurring demand for cloud computing. Notably, cloud computing has encouraged video conferencing, gaming, e-commerce, remote project collaboration, online classes and several other programs. This fund offers exposure to emerging, fast-growing U.S.-listed companies (including ADRs) primarily focused on cloud software and services, and follows the BVP Nasdaq Emerging Cloud Index. It holds 52 stocks in its basket and charges investors 45 bps in fees per year. The product has amassed $392 million in its asset base and trades in average daily volume of 189,000 shares. It has a Zacks ETF Rank #2 (Buy) (read: ).

ProShares Online Retail ETF ( -) – Up 42.2%

With the rapid digital shift in consumer landscape, online shopping has surged. This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 24 stocks in its basket. The product has amassed $155 million in its asset base and trades in paltry volume of around 52,000 shares a day on average. It charges 58 bps in annual fees from investors.

MicroSectors FANG+ ETN ( -) - Up 32%

FANG stocks and its likes have hit new all-time highs lately. In fact, the combined market value of the big four companies — Facebook (-) , Apple (-) , Amazon (-) and Microsoft (-) — is close to $5 trillion. This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly-traded growth stocks of next generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket and charges 58 bps in annual fees. The product has accumulated $42.6 million in its asset base and trades in average daily volume of 9,000 shares (read: ).

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