5 Top-Ranked ETFs That Outperformed the Market in October

Investors remained optimistic in October, enjoying the upbeat third-quarter earnings season. The stock market rallied impressively despite concerns surrounding the rising material prices from supply-chain disturbances, COVID-19 uncertainty and Federal Reserve’s tapering concerns. In fact, all the three major averages closed at a record for the third trading session in a row on Nov 2.

The central bank is expected to roll back the month-end bond purchases by cutting $10 billion of $80 billion a month in Treasuries and $5 billion from $40 billion a month in mortgage-backed securities (per a CNBC article). If everything goes well, the Federal Reserve expects to finish off tapering by mid-2022.

Market pundits are crediting the stupendous rally to the impressive earnings season. Notably, 83% of the S&P 500 companies that reported earnings results have surpassed analysts’ earnings estimates as of Nov 2, per the FactSet data (according to a CNBC article). The earnings results have also erased investors’ worries stemming from the rising supply-chain disturbances, gradually eroding the corporate profit margins.

The ongoing optimism in the market is keeping investors optimistic about the year-end rally. In this regard, Keith Lerner, co-chief investment officer at Truist, has commented that “The primary market trend appears higher. In the eight periods since 1950 where stocks were up more than 20% through October, as they are this year, the S&P 500 tacked on additional gains by year end 100% of the time with an average gain of 6.2%,” as stated in a CNBC article.

Studying the October rally, here we highlight some top-ranked ETFs that have outperformed the market over the last month:

Invesco DWA Industrials Momentum ETF FTXR — up 10.9%

This holiday season appears to be a comparatively strong period for retailers. Moreover, the growing inclination toward e-commerce has resulted in a wider reach for players in the retail space. That’s why there is likely to be a surge in demand for freight services to deliver the products ordered online.

This ETF follows the Nasdaq US Smart Transportation Index. It charges 60 bps in fees a year from investors. It flaunts a Zacks ETF Rank #2.

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Written By: Zacks Investment Research