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5 Sector ETFs That Have Gained More Than 50% This Year

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Wall Street has rebounded strongly since hitting the March lows and has recovered all the losses made during the pandemic. In fact, the major U.S. indices logged in the best 100-day gain since 1933. The combination of unprecedented levels of fiscal and monetary stimulus, positive developments in coronavirus vaccines, and recovering economic activities led to the strength.

The U.S. economy is steadily recovering and the loss suffered due to the pandemic is less than feared. This is especially true as retail sales bounced back to their pre-pandemic level in just a few months after slumping to a seven-year low in April. The unemployment rate dropped to 10.2% in July, below June's 11.1% mark. The latest industry gauge indicates that U.S. manufacturing activity expanded in July at the fastest pace in 15 months.

Additionally, an improving outlook on the COVID-19 case front in the United States coupled with better-than-expected earnings bolstered investors’ confidence. Virus-related hospitalizations in Texas fell to the lowest level since early July on Aug 12, and hospitalizations in California also extended a downward trend. The ascent in stocks came despite the lingering uncertainty over the economic and political outlook. Further, a rise in mergers and acquisitions and a weak dollar led to a spike in the stock market (read: 4 Sector ETFs That Are Up Double-Digits to Start August).

That said, we highlight five ETFs from different sectors of the broad market that have outperformed and gained at least 50% so far this year.

ProShares Online Retail ETF (ONLN - Free Report) – Up 77.2%

Consumers have made a radical shift toward online shopping as people want to avoid direct contact or go outside. This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 26 stocks in its basket. The product has amassed $283.9 million in its asset base and trades in moderate volume of around 125,000 shares a day on average. It charges 58 bps in annual fees from investors (read: Can the Best Sector & Its ETFs of July Thrive in August Too?).

ARK Genomic Revolution Multi-Sector ETF (ARKG - Free Report) – Up 74.7%

The biotech sector is benefiting from the COVID-19 pandemic that has kept biotech and pharma players all over the world on their toes for a vaccine or a treatment. This is an actively managed ETF, focusing on companies likely to benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments. These companies also focus on improvements and advancements in genomics. With AUM of $1.8 billion, the fund holds 42 stocks in its basket and has 0.75% in expense ratio. It trades in an average daily volume of 767,000 shares.

ARK Next Generation Internet ETF (ARKW - Free Report) – Up 72%

The fund’s strong performance has been driven by the e-commerce boom and the shift in consumer habits to a purely digital world with work, entertainment and shopping from home during the COVID-19 pandemic. This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to cloud, enabling mobile, new and local services. The fund holds 48 stocks in its basket with AUM of $2 billion. It trades in an average daily volume of 699,000 shares and charges 76 bps in annual fees from investors. 

Invesco Solar ETF (TAN - Free Report) – Up 67.4%

The solar industry has been on fire buoyed by solid earnings coupled with the presumptive Democratic presidential candidate Joe Biden’s push for clean energy and infrastructure plans. This ETF offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 27 stocks in the basket with American firms dominating half of the fund’s portfolio, followed by China (22.4%) and Spain (7.5%). The product has amassed $1.1 billion in its asset base and trades in a solid volume of around 538,000 shares a day. It charges investors 71 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Global X Video Games & Esports ETF (HERO - Free Report) – Up 57.1%

The gaming industry is booming this year as spending on video games in the United States skyrocketed to new heights in the second quarter. This ETF offers exposure to companies that develop or publish video games, facilitate streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality. This can be easily done by the Solactive Video Games & Esports Index. Holding 40 securities in its basket, the fund has AUM of $227.1 million and charges 50 bps in annual fees. It trades in an average daily volume of 159,000 shares (read: 5 ETFs to Play Record-Breaking U.S. Gaming Sales in Q2).

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