The Q4 2013 earnings season has seen a weak start but is
gradually showing impressive numbers that could touch the all-time
quarterly high. The quarter's earnings growth is nearing the
highest level seen in 2013.
Total earnings for the S&P 500 companies that have reported so
far are up 12% on an annual basis with beat ratio of 70.8% while
revenues increased 1.8% with a beat ratio of 51.1% (read:
Focus on Earnings with These ETFs
From a sector perspective, aerospace is the star performer with a
beat ratio of 100% for earnings and 62.5% for revenues. The medical
sector follows closely with earnings and beat ratio of 87% and
as per the Zacks Earnings Trends
The basic materials space is a key contributor to earnings,
accounting for 40.7% of overall growth. On the revenue front, the
homebuilding and construction sector has contributed the maximum
(18.5%) to quarterly growth.
Considering all the key metrics, a few equity ETFs have impressed
with their performances and generated solid returns from the
year-to-date look. While there are winners in many corners of the
space, below we highlight the top ETFs that have performed well on
robust earnings (read:
3 ETFs to Watch for Big Moves This Year
PureFunds ISE Junior Silver ETF (
SILJ is the biggest beneficiary not only in the material space but
also in the broad ETF world. This product provides a true small cap
play on the silver mining space.
The fund has managed assets worth $1.7 million and trades in a
paltry volume of less than 6,000 shares a day. The ETF tracks the
ISE Junior Silver Small Cap Miners/Explorers Index and charges 69
bps in annual fees.
In total, the fund holds about 24 companies with the largest
allocation going to the top three firms -
Fortuna Silver Mines (
Endeavour Silver (
Silvercorp Metal (
-each making up nearly 12%. In terms of country exposure, Canadian
firms dominate the fund at 74% while the U.S. securities make up
for a 25% share. SILJ has added about 15% since the start of 2014
3 Sector ETFs Surging to Start 2014
SPDR S&P Biotech ETF (
This fund provides exposure to the biotech segment of the broad
healthcare space by tracking the S&P Biotechnology Select
Industry Index. The product has roughly $1.2 million in AUM and
trades about 336,000 shares in volume a day, while charging only 35
basis points a year. The ETF is slightly tilted toward small caps
which account for about 58% of the portfolio while mid and large
caps take the rest.
Holding 71 securities in its basket, the product is largely
concentrated on the top firm -
Intercept Pharmaceuticals (
- with 6.03% allocation. Other securities do not account for more
than 2.41% of assets. The fund is up over 10% so far this year and
has a Zacks ETF Rank of 1 or 'Strong Buy' with 'High' risk outlook.
These products are clearly outpacing the broad market funds by wide
margins and will remain the forerunners if the current trends
continue in the weeks ahead. They could also be funds to focus on
for those worried about the broad market's direction, as they have
proven to be resilient in what has otherwise been a very difficult
time for stocks.
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FORTUNA SILVER (FSM): Free Stock Analysis
INTERCEPT PHARM (ICPT): Free Stock Analysis
PF ISE-JS SC ME (SILJ): ETF Research Reports
SPDR-SP BIOTECH (XBI): ETF Research Reports
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