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After a rough start to 2024 on overstretched valuations and easing of rate cut bets, Wall Street showed strong momentum, with both the S&P 500 and Dow Jones hitting a series of new highs lately. The S&P 500 topped the 4,900 level for the first time, driven by strong corporate earnings, governmental policy moves and investor confidence in the tech sector and AI developments.
As such, the three major indices are on track for a positive month. The gains were broad-based and well spread out across various segments. Some of the top performers in the ETF space from different corners of the market are Amplify U.S. Alternative Harvest ETF (MJUS - Free Report) , Sprott Junior Uranium Miners ETF (URNJ - Free Report) , Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report) .
Inflation is easing and the economy is improving. The personal consumption expenditure index — the Federal Reserve's preferred inflation gauge — rose 2.6% in December. This marks the third time that inflation is below 3%. Meanwhile, the economy grew at a much more rapid pace than expected, with GDP rising at a 3.3% annualized rate in the fourth quarter of 2023, up from the Wall Street consensus estimate growth rate of 2% (read: U.S. GDP Growth Beats Expectations in Q4: ETFs to Benefit).
Additionally, the U.S. government announced the launch of a pilot program for AI research in collaboration with major tech companies and federal agencies under the umbrella of the National Science Foundation. This move likely contributed to the positive sentiment in the tech sector.
ETFs in Focus
Let’s dig into the details of the abovementioned ETFs:
Amplify U.S. Alternative Harvest ETF (MJUS - Free Report) – Up 35.9%
Cannabis stocks and ETFs have been on a surge since the US Drug Enforcement Administration (“DEA”) started reviewing the potential reclassification of cannabis from Schedule I to Schedule III. This development, initiated by a recommendation from the Department of Health and Human Services (HHS), could potentially expand the market for marijuana, which is a multibillion-dollar industry in the United States and a cash crop in many newly legalized states (read: Cannabis ETFs: What's Behind the Latest Surge).
Amplify U.S. Alternative Harvest ETF is an actively managed ETF that seeks long-term growth of capital by primarily investing in securities of companies engaged in the Cannabis Business in the United States as generally represented in the Prime U.S. Alternative Harvest Index. It holds 19 stocks in its basket with a heavy concentration on the top five firms. Amplify U.S. Alternative Harvest ETF has amassed $151.1 million in its asset base and charges 75 bps in annual fees. It trades in a volume of 31,000 shares a day.
The uranium market is getting hotter this year, with price spiking to a new 16-year high on a buying frenzy triggered after Kazatomprom, the world’s largest producer of the radioactive material, warned on supply shortfalls. Renewed interest in nuclear power also added to the strength. Notably, 22 countries, including the United States, UK, Canada and France, have committed to tripling their nuclear capacity by 2050.
Sprott Junior Uranium Miners ETF is the only pure-play ETF focused on small uranium miners selected for their potential for significant revenue and asset growth. It follows the Nasdaq Sprott Junior Uranium Miners Index, which is designed to track the performance of mid-, small- and micro-cap companies in uranium-mining-related businesses. It holds 32 stocks in its basket and charges 80 bps in annual fees. Sprott Junior Uranium Miners ETF has accumulated $279.6 million in its asset base and trades in an average daily volume of 261,000 shares (read: 4 ETF Zones Beating the Market to Start 2024).
The insurance sector is benefiting from a combination of factors, including technological innovation, strategic transformations and adapting to evolving market conditions and consumer needs. Additionally, the resilient economy is leading to higher demand for all types of insurance services, thereby driving the sector higher.
Invesco KBW Property & Casualty Insurance ETF provides exposure to 26 companies, primarily engaged in U.S. property and casualty insurance activities. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up for at least 8% share each. Invesco KBW Property & Casualty Insurance ETF has managed $206.2 million in its asset base and has an expense ratio of 0.35%. KBWP trades in an average daily volume of 23,000 shares but has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
Pacer Data and Digital Revolution ETF (TRFK - Free Report) – Up 8.9%
The technology sector has been on a tear this year, driven by an AI boom and a rebound in the personal computer market. Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 79 stocks in its basket (read: Nvidia Off to a Great Start in 2024: Is More Rally in Store for ETFs?).
Pacer Data and Digital Revolution ETF has accumulated $16.6 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of about 9,000 shares per day on average. It has a Zacks ETF Rank #2 (Buy).
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4 Sector ETFs That Beat the Market in January
After a rough start to 2024 on overstretched valuations and easing of rate cut bets, Wall Street showed strong momentum, with both the S&P 500 and Dow Jones hitting a series of new highs lately. The S&P 500 topped the 4,900 level for the first time, driven by strong corporate earnings, governmental policy moves and investor confidence in the tech sector and AI developments.
As such, the three major indices are on track for a positive month. The gains were broad-based and well spread out across various segments. Some of the top performers in the ETF space from different corners of the market are Amplify U.S. Alternative Harvest ETF (MJUS - Free Report) , Sprott Junior Uranium Miners ETF (URNJ - Free Report) , Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) and Pacer Data and Digital Revolution ETF (TRFK - Free Report) .
Inflation is easing and the economy is improving. The personal consumption expenditure index — the Federal Reserve's preferred inflation gauge — rose 2.6% in December. This marks the third time that inflation is below 3%. Meanwhile, the economy grew at a much more rapid pace than expected, with GDP rising at a 3.3% annualized rate in the fourth quarter of 2023, up from the Wall Street consensus estimate growth rate of 2% (read: U.S. GDP Growth Beats Expectations in Q4: ETFs to Benefit).
Additionally, the U.S. government announced the launch of a pilot program for AI research in collaboration with major tech companies and federal agencies under the umbrella of the National Science Foundation. This move likely contributed to the positive sentiment in the tech sector.
ETFs in Focus
Let’s dig into the details of the abovementioned ETFs:
Amplify U.S. Alternative Harvest ETF (MJUS - Free Report) – Up 35.9%
Cannabis stocks and ETFs have been on a surge since the US Drug Enforcement Administration (“DEA”) started reviewing the potential reclassification of cannabis from Schedule I to Schedule III. This development, initiated by a recommendation from the Department of Health and Human Services (HHS), could potentially expand the market for marijuana, which is a multibillion-dollar industry in the United States and a cash crop in many newly legalized states (read: Cannabis ETFs: What's Behind the Latest Surge).
Amplify U.S. Alternative Harvest ETF is an actively managed ETF that seeks long-term growth of capital by primarily investing in securities of companies engaged in the Cannabis Business in the United States as generally represented in the Prime U.S. Alternative Harvest Index. It holds 19 stocks in its basket with a heavy concentration on the top five firms. Amplify U.S. Alternative Harvest ETF has amassed $151.1 million in its asset base and charges 75 bps in annual fees. It trades in a volume of 31,000 shares a day.
Sprott Junior Uranium Miners ETF (URNJ - Free Report) – Up 18.9%
The uranium market is getting hotter this year, with price spiking to a new 16-year high on a buying frenzy triggered after Kazatomprom, the world’s largest producer of the radioactive material, warned on supply shortfalls. Renewed interest in nuclear power also added to the strength. Notably, 22 countries, including the United States, UK, Canada and France, have committed to tripling their nuclear capacity by 2050.
Sprott Junior Uranium Miners ETF is the only pure-play ETF focused on small uranium miners selected for their potential for significant revenue and asset growth. It follows the Nasdaq Sprott Junior Uranium Miners Index, which is designed to track the performance of mid-, small- and micro-cap companies in uranium-mining-related businesses. It holds 32 stocks in its basket and charges 80 bps in annual fees. Sprott Junior Uranium Miners ETF has accumulated $279.6 million in its asset base and trades in an average daily volume of 261,000 shares (read: 4 ETF Zones Beating the Market to Start 2024).
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) – Up 8.9%
The insurance sector is benefiting from a combination of factors, including technological innovation, strategic transformations and adapting to evolving market conditions and consumer needs. Additionally, the resilient economy is leading to higher demand for all types of insurance services, thereby driving the sector higher.
Invesco KBW Property & Casualty Insurance ETF provides exposure to 26 companies, primarily engaged in U.S. property and casualty insurance activities. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up for at least 8% share each. Invesco KBW Property & Casualty Insurance ETF has managed $206.2 million in its asset base and has an expense ratio of 0.35%. KBWP trades in an average daily volume of 23,000 shares but has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
Pacer Data and Digital Revolution ETF (TRFK - Free Report) – Up 8.9%
The technology sector has been on a tear this year, driven by an AI boom and a rebound in the personal computer market. Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 79 stocks in its basket (read: Nvidia Off to a Great Start in 2024: Is More Rally in Store for ETFs?).
Pacer Data and Digital Revolution ETF has accumulated $16.6 million in its asset base. It has an expense ratio of 0.60%. TRFK trades in a meager volume of about 9,000 shares per day on average. It has a Zacks ETF Rank #2 (Buy).