Be Thankful To These Outperforming Sector ETFs This Year

 | Nov 26, 2019 08:00PM ET

The year 2019 has been all about the ebb and flow in U.S.-China trade tensions, fears of growth slowdown and global policy easing. Despite the odds, the key U.S. equity gauges rose at least 20%, scaling all-time highs on several occasions.

SPDRS&P 500 ETF ACWI is up 21.2%. While many corners of the market have made solid gains, some sectors emerged even stronger.

Below we highlight those winners.

Semiconductor

Occasional hopes of a U.S.-China trade deal, a 5G boom and rising consumer spending on technology have propelled the sector. Expectations of higher smartphone sales have given an added boost. IDC expects the smartphone market to record 1.6% growth in 2020, after three straight years of global contraction. Gartner too expects smartphone sales to grow again in 2020 after a decline in 2019, thanks to “broader availability of 5G models and the promotion of 5G service packages in various parts of the world by communications service providers."

SPDR S&P Semiconductor (NYSE:XSD) ETF Time to Buy the Dip in Semiconductor ETFs? ).

Investors should note that not only semiconductor, the entire tech space has rallied this year. In fact, technology is on its way to record the XLK (up 41.8%) are top-performing tech ETFs.

Clean Energy

Clean energy ETFs have ridden higher this year despite President Trump’s inclination toward booting fossil-fuel energy. Going by an International Energy Agency (IEA) report , worldwide supplies of renewable electricity are expected to expand 50% in the next five years.

A transition toward Top-Performing Alternative Energy ETFs YTD ).

Invesco Solar ETF (LON:TAN) (up 48.2%), Invesco Exchange-Traded Fund Trust - Invesco WilderHill Clean Energy ETF (NYSE:XLE) ACES (up 41.1%) are some of the ETFs that have added solid gains.

Home Building

Low mortgage rates have worked wonders for housing stocks this year. With the Fed being dovish, this rate-sensitive sector has every reason to outperform. iShares U.S. Home Construction ETF (WA:ITB) (up 51.1%), Invesco Dynamic Building & Construction ETF Here's Why Homebuilding ETFs Are Soaring ).

Aerospace & Defense

Trump’s repeated pitch for a higher defense budget, rising geopolitical risks and higher commercial demand are driving defense companies. Invesco Aerospace & Defense ETF PPA (up 40.7%) and SPDR S&P Aerospace & Defense (NYSE:XAR) ETF (LON:XAR) (up 40.8%) deserve a mention.

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