With the U.S. deadlock temporarily abated, the equity markets
once again reached their multi-year highs on improving economic
conditions and recovering housing fundamentals. A string of Q3
earnings beat also supported the market uptrend (read:
3 Biggest ETF Winners from the 3rd Quarter
Further, growing assurance over the continuation of the Fed's bond
buying program, at least till the end of this year, encouraged
investors' to put in huge amounts in the global equity markets. The
U.S. market fund (
has pulled in nearly $5.8 billion for October, closely followed
$2.8 billion inflows into
iShares Core S&P Mid-Cap ETF (
Though there have been winners in every corner of the space, a few
sectors have easily outpaced the broad market, in the year-to-date
period. Below, we have highlighted these sector ETFs that have been
the star performers this year and could be better plays as we move
towards the end of the year (see:
all the Categories ETF here
The biggest winner in the global space so far this year is
definitely the alternative energy world, in particular solar. Most
of the gains in this corner of the market came from impressive
performances and a strong growth outlook by the major companies.
In addition, demand for photovoltaic cells is rising rapidly with
China leading the way higher. Notably, China is expected to account
for nearly 30% of the total solar demand next year.
Though both the solar ETFs have provided triple digit returns this
Guggenheim Solar ETF (
has been the top performer. The fund has attracted $226.10 million
in assets so far this year reaching a total base of $385.4 million.
It charges investors 70 bps in fees per year while sees good volume
of more than 300,000 shares a day.
The product tracks the MAC Global Solar Energy Index, holding 29
stocks in the basket. The ETF puts nearly 51% of assets in top 10
holdings and focuses on small caps as these account for
three-fourths share (read:
3 Small Cap Value ETFs Poised to Outperform
). Further, American firms dominate the fund's portfolio with
nearly 42%, closely followed by China (27.25%) and Hong Kong
The fund surged nearly 122% year-to-date and still has room for
further upside given the bullish trend in the sector. Also, TAN has
a Zacks ETF Rank of 2 or 'Buy' rating, suggesting that the product
would outperform over the next one-year period (read:
Inside the Incredible Surge in Solar ETFs
The biotechnology sector is also performing remarkably well this
year on increased mergers and acquisitions, promising new drugs and
their approval, ever-increasing health care spending and an
insatiable demand for new drugs. Expansion into emerging markets
like India, China and Brazil would provide a further boost to the
sector going forward.
The top ETF in this space is
PowerShares Dynamic Biotechnology & Genome Portfolio (
, which is enjoying a rally of over 51% year-to-date (read:
Inside Biotech ETFs: Can the Run Continue?
). The trend is expected to continue given the Zacks ETF Rank of 1
or 'Strong Buy' rating with 'Medium' risk outlook for the fund.
This ETF follows the Dynamic Biotechnology & Genome Intellidex
Index. The product has a somewhat sparse volume of 44,000 shares a
day, but a decent level of about $236 million in assets under
management. The fund charges 63 bps in fees and expenses from
Holding 29 stocks, the fund is moderately concentrated on its top
10 holdings at 50% but well spread across market spectrums. Large
caps account for 42%, small caps make up for 33% while rest goes to
mid caps. The ETF has a certain tilt toward the growth stocks
Bet on This Top Ranked Large Cap Growth ETF
The social media space is back on track and were on fire this year
thanks to robust earnings, a bullish outlook, and growing Internet
Social Media ETF on Fire After String of Earnings
One great way to play the sector surge is with the
Global X Social Media Index ETF (
, which gained immense popularity in recent days. The product has
gathered $80 million of capital this year, propelling its total
asset base to $95.6 million.
Volume is moderate as it exchanges 82,000 shares in hand on average
daily basis. The ETF charges 65 bps in fees and expenses.
The fund tracks the Solactive Social Media Index and holds 27
securities in the basket. The product puts more than 76% of assets
in the top 10 firms, suggesting heavy concentration. However, the
fund is well spread across large and mid cap stocks with a slight
tilt toward growth stocks. In terms of country exposure, U.S. firms
take half of the portfolio, closely followed by China (30%) and
The social media ETF returned over 47% in the year-to-date time
frame and currently has a Zacks ETF Rank of 2 or 'Buy' rating with
'High' risk outlook.
Want the latest recommendations from Zacks Investment Research?
Today, you can download
7 Best Stocks for the Next 30 Days
Click to get this free report >>
PWRSH-DYN BIO (PBE): ETF Research Reports
GLBL-X SOCL MDA (SOCL): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
GUGG-SOLAR (TAN): ETF Research Reports
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report