6 Wining ETF Areas From A Late Santa Rally
Zacks Investment Research | Dec 27, 2018 02:30AM ET
Albeit a little late, Santa Claus rally has finally set in. It refers to the jump in stock prices in the last few days of December. Factors like tax considerations , happiness due to the holiday season and people investing their Christmas bonuses are some of the factors that give markets a boost this time.
However, this December hasn’t been too festive as global growth worries, no definite solution to U.S.-China trade tensions, constant volatility in the oil patch and a flattening yield curve in the United States bothered the markets.
Still, it’s better late than never and Wall Street saw the actual Santa Claus rally on Boxing Day when stocks staged the biggest single-day jump since March 2009. The S&P 500, the Dow Jones Industrial Average and the NASDAQ Composite advanced about 4.96%, 4.98% and 5.84%, respectively. Let’s take a look which sector ETFs won the most.
Energy
Crude prices jumped from a 17-month low on Dec 26 with United States Oil (NYSE:USO) Is Fresh OPEC+ Output Cut Enough to Boost Oil & Energy ETFs? ).
Energy companies’ ETFs including iShares US Oil & Gas Exploration & Production ETF (FXN ) (up 7.8%) were among the highest gainers.
Biotech
ARQL have lately come up with upbeat news releases.
Probably this is why, biotech ETFs like ALPS Medical Breakthroughs ETF (SI:SBIO) (up 7.5% on Dec 26), Virtus LifeSci Biotech Clinical Trials ETF (MZ:BBC) (up 7.5%), SPDR S&P Biotech (NYSE:XBI) ETF XBI (up 7.3%) and Invesco DWA Healthcare Momentum ETF (HN:PTH) (up 7.6%) logged outsized gains on Dec 26.
Technology
Brutal selloffs in the tech stocks early in the fourth quarter made it reasonably priced and gave every reason to investors to bet big on it. As a result, iShares US Technology ETF (ARKW added in the range of 6.3% to 6.5% on Dec 26.
Consumer Cyclicals
In the six-year best holiday shopping season, e-commerce sales surged Super Saturday the Biggest Shopping Day of 2018? 4 ETF Deals ).
These data gave a boost to this online retail fund Online Retail Amplify ETF (Holiday Sales Strongest in Six Years: ETFs Set to Surge ).
Invesco DWA Consumer Cyclicals Mom ETF (PEZ , which identifies companies that are showing relative strength, also gained 6.9% on that day. After all, in-store sales grew 4.3% in the same time period, thanks to an accelerating economy, rising consumer confidence and higher spending.
Airlines
The broader market jump and probably holiday season travel were the tailwinds to airlines stocks. The airlines fund US Global Jets ETF ( (KL:JETS) ) added about 4.5% on Dec 26. The underlying U.S. Global Jets Index tracks the performance of Airline Companies across the globe with emphasis on domestic passenger airlines. It charges 60 bps in fees (read: Transport ETFs & Stocks to Surge on Busy Thanksgiving Travel ).
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Industrial
Among industrial ETFs, Invesco DWA Industrials Momentum ETF ( (TO:PRN) ) saw the maximum gain of 5.2%. The fund picks shares of companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges. It charges 60 bps in fees.
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