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Wall Street has been steady in July despite rising coronavirus cases. SPDR S&P 500 (SPY - Free Report) (up 5.9%), SPDR Dow Jones Industrial Average ETF (DIA - Free Report) (up 2.5%) and Invesco QQQ ETF (QQQ - Free Report) (up 7%) all have returned nicely due to fiscal and monetary stimulus, coronavirus vaccine hopes, pent-up consumer demand and decent earnings releases.
Against this backdrop, below we highlight the winning and losing ETF areas of the month of July.
Best ETF Areas
Precious Metals
Precious metals, both silver and gold, have staged a rally in July. Silver has stolen the show with prices climbing to the highest level in nearly four years. About 50% of the metal’s total demand comes from industrial applications. So, the reopening of global economies is helping silver more than the yellow metal (read: Here's Why Silver Outshining Gold ETFs).
Overall, increase in investment demand, pick-up in industrial activity and investors’ appetite for alternatives to safe-haven asset gold (which is pretty pricey at the current level) led to the silver rally. Growth in the global solar PV industry, a likely rebound in global computer shipments, as well as new sources of demand for sensors used in IoT and OLED lighting are providing a boost to silver demand.
A raft of global stimulus, including the latest EU deal of borrowing 750 billion euros, worked wonders for this white metal in the near term too. ETRACS UBS Bloomberg CMCI Silver Total Return ETN (40.5%) and ETFMG Prime Junior Silver Miners ETF (SILJ - Free Report) (up 37.9%) have been among the key gainers in this field. VanEck Vectors Junior Gold Miners ETF (GDXJ) (up 28.3%)has been the best gold mining ETF.
Clean Energy
Clean energy stocks and ETFs have also maintained their winning spree. “Growing consumer electric vehicle adoption, state expansions of charging infrastructure, falling battery prices and increased solar-storage installations” have acted as a tailwind for the U.S. clean energy sector for the past few quarters.
Apart from the United States, Europe and China have been focusing greatly on this area. If this was not enough, the coronavirus outbreak has been acting as a boon to the segment. Researchers recently reported that cleaner air caused by lockdowns has caused more sunlight to reach solar panels, which has enhanced clean energy production. Invesco Solar ETF (TAN - Free Report) (up 24.7%) and First Trust NASDAQ Clean Edge Green Energy Index ETF (QCLN) (up 22.5%) have been the key winners.
Homebuilding
The U.S. housing market has been witnessing a streak of encouraging data lately. Existing home sales, which account for more than 90% of U.S. home sales, showed a 20.7% rise to a seasonally adjusted annual rate of 4.72 million units in June. It compares favorably with 3.91 million units observed in May (the lowest level since October 2010). Notably, the metric showed the highest gain since 1968 when NAR had begun tracking the series. The current low rate environment has given a big boost to the sector. iShares U.S. Home Construction ETF (ITB - Free Report) has gained 19.9% in July (read: Housing ETFs to Gain on Upbeat Sales Data Amid Coronavirus Crisis).
Worst ETF Areas
Volatility
Volatility ETFs and ETNs have lost in the month as stocks have been steady. ProShares Trust VIX Short-Term (VIXY) (down 20.2%) and iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) (down 19.9%) are the major losers in the month.
Airlines
The U.S. Global Jets ETF (JETS - Free Report) has lost 5.7% in the month. The pain for airlines stocks is well known amid flight restrictions. “Softer booking curve” has been a concern for industry players like American Airlines, per Citigroup, as quoted on MarketWatch.
U.S. Dollar
Invesco DB U.S. Dollar Index Bullish Fund (UUP - Free Report) has declined 4.3% in past month. The U.S. dollar continues to hover around a two-year low. A dovish Fed and a stronger euro thanks to the new pandemic stimulus deal led to the weakness in the greenback. Moreover, after a steep rally in the beginning of the year, the U.S. dollar has become somewhat overvalued.
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Best & Worst ETF Areas of July
Wall Street has been steady in July despite rising coronavirus cases. SPDR S&P 500 (SPY - Free Report) (up 5.9%), SPDR Dow Jones Industrial Average ETF (DIA - Free Report) (up 2.5%) and Invesco QQQ ETF (QQQ - Free Report) (up 7%) all have returned nicely due to fiscal and monetary stimulus, coronavirus vaccine hopes, pent-up consumer demand and decent earnings releases.
Against this backdrop, below we highlight the winning and losing ETF areas of the month of July.
Best ETF Areas
Precious Metals
Precious metals, both silver and gold, have staged a rally in July. Silver has stolen the show with prices climbing to the highest level in nearly four years. About 50% of the metal’s total demand comes from industrial applications. So, the reopening of global economies is helping silver more than the yellow metal (read: Here's Why Silver Outshining Gold ETFs).
Overall, increase in investment demand, pick-up in industrial activity and investors’ appetite for alternatives to safe-haven asset gold (which is pretty pricey at the current level) led to the silver rally. Growth in the global solar PV industry, a likely rebound in global computer shipments, as well as new sources of demand for sensors used in IoT and OLED lighting are providing a boost to silver demand.
A raft of global stimulus, including the latest EU deal of borrowing 750 billion euros, worked wonders for this white metal in the near term too. ETRACS UBS Bloomberg CMCI Silver Total Return ETN (40.5%) and ETFMG Prime Junior Silver Miners ETF (SILJ - Free Report) (up 37.9%) have been among the key gainers in this field. VanEck Vectors Junior Gold Miners ETF (GDXJ) (up 28.3%)has been the best gold mining ETF.
Clean Energy
Clean energy stocks and ETFs have also maintained their winning spree. “Growing consumer electric vehicle adoption, state expansions of charging infrastructure, falling battery prices and increased solar-storage installations” have acted as a tailwind for the U.S. clean energy sector for the past few quarters.
Apart from the United States, Europe and China have been focusing greatly on this area. If this was not enough, the coronavirus outbreak has been acting as a boon to the segment. Researchers recently reported that cleaner air caused by lockdowns has caused more sunlight to reach solar panels, which has enhanced clean energy production. Invesco Solar ETF (TAN - Free Report) (up 24.7%) and First Trust NASDAQ Clean Edge Green Energy Index ETF (QCLN) (up 22.5%) have been the key winners.
Homebuilding
The U.S. housing market has been witnessing a streak of encouraging data lately. Existing home sales, which account for more than 90% of U.S. home sales, showed a 20.7% rise to a seasonally adjusted annual rate of 4.72 million units in June. It compares favorably with 3.91 million units observed in May (the lowest level since October 2010). Notably, the metric showed the highest gain since 1968 when NAR had begun tracking the series. The current low rate environment has given a big boost to the sector. iShares U.S. Home Construction ETF (ITB - Free Report) has gained 19.9% in July (read: Housing ETFs to Gain on Upbeat Sales Data Amid Coronavirus Crisis).
Worst ETF Areas
Volatility
Volatility ETFs and ETNs have lost in the month as stocks have been steady. ProShares Trust VIX Short-Term (VIXY) (down 20.2%) and iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) (down 19.9%) are the major losers in the month.
Airlines
The U.S. Global Jets ETF (JETS - Free Report) has lost 5.7% in the month. The pain for airlines stocks is well known amid flight restrictions. “Softer booking curve” has been a concern for industry players like American Airlines, per Citigroup, as quoted on MarketWatch.
U.S. Dollar
Invesco DB U.S. Dollar Index Bullish Fund (UUP - Free Report) has declined 4.3% in past month. The U.S. dollar continues to hover around a two-year low. A dovish Fed and a stronger euro thanks to the new pandemic stimulus deal led to the weakness in the greenback. Moreover, after a steep rally in the beginning of the year, the U.S. dollar has become somewhat overvalued.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>