Wall Street's Best Start Since 1987: Top ETFs Of Top Sectors
Zacks Investment Research | Feb 28, 2019 02:30AM ET
February’s performance positioned the S&P 500 for its “best year-to-date performance 35th in 91 years to have started with consecutive monthly gains on the market.
Let’s take a look at the top-performing sectors (per ft.com) and their ETF winners:
Industrials
There was considerable improvement in U.S.-China trade relation. In late-February, President Donald Trump announced a postponement in the increase of tariffs on about $200 billion worth of Chinese goods, noting “10 ETF Areas to Gain as Trump Delays Additional Tariffs ).
SPDR S&P Aerospace & Defense (NYSE:XAR) ETF ( (LON:XAR) ) (up 21.2%), Invesco Water Resources ETF (TO:PHO) (up 19.6%) and Fidelity MSCI Industrials Index ETF (FIDU ) (up 19.1%) are the toppers in the space.
Energy
Crude oil prices have been on the rise since the start of 2019, buoyed by a fresh output cut decision by OPEC and Russia for the first six months of the year, U.S. sanctions against Venezuela on political grounds and hopes of a U.S.-Sino trade truce. United States Oil Oil Jumps: 4 ETFs to Benefit & 4 to Suffer ).
Rising crude prices benefited energy companies. SPDR S&P Oil & Gas Equipment & Services (NYSE:XES) ETF (IEZ ) (24.1%) are the top-performing energy ETFs this year.
Information Technology
Tech stocks suffered in 2018 due to overvaluation concerns,President Trump’s protectionist view toward trade, renewed global growth worries and a likely stringency in social media regulations following reports of Facebook (NASDAQ:FB)'s data breaches in March. However, the sector made a solid comeback this year due to its solid fundamentals.
Rising demand for emerging technologies and XSW ) (up 24.8%) are the winners this year.
Consumer Discretionary
Consumer confidence bounced back in February amid a healthy labor market and an end to the U.S. government’s longest shutdown ever. The index rose to 131.4 from 121.7 in January with consumers' view toward the economy being the brightest since December 2000 .
In any case, the U.S. economy has been one of the healthiest in the developed market bloc. So, no wonder, consumers will be comfortable in splurging on discretionary activities. Plus, earnings of the consumer discretionary sector have been pretty upbeat this season.
Among retailing, online activities have been prevailing in recent times at the global level. ProShares Online Retail ETF Explore Online Retailing Internationally With This New ETF ).
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Financials
A dovish Fed and the resultant steepening of the yield curve did wonders for financial stocks. Since banks borrow money at short-term rates and lend capital at long-term rates, steepening of the yield curve bodes well for bank or financial ETFs. SPDR S&P Bank (NYSE:KBE) ETF Rate Sensitive ETFs to Explode Higher Post Fed Minutes ).
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