6 Top-Performing ETFs of Last Week

Last week was moderate for Wall Street.The S&P 500, the Dow Jones and the Nasdaq Composite added about 0.2%, 0.07% and 0.8% in the past week, respectively. Tech stocks benefited mainly on the hype surrounding Apple (AAPL) and Amazon (AMZN). The new iPhone launch event of Apple while Amazon’s annual Prime Day shopping event on Oct 13 and 14 led to such gains.

In the event, Apple announced four new iPhones — iPhone 12 mini, iPhone 12, iPhone 12 Pro and iPhone 12 Pro Max, plus a new HomePod (which is a smaller version of its HomePod speaker). This is the first time that iPhone came with 5G for faster connectivity. Meanwhile, Amazon’s Prime Day sales surged 36%.

Early Q3 results show that earnings recovery is in place. The third-quarter earnings season is off to a good start, with banks and brokers coming up with a notably improved profitability picture compared to what they reported in the first half of the year.

Some economic datapoints came in upbeat. Retail sales in the United States jumped 1.9% sequentially in September of 2020, following a 0.6% gain in August and beating forecasts of a 0.7% increase. It marked the biggest rise in three months. The University of Michigan's consumer sentiment increased to 81.2 in October of 2020 from 80.4 in September but remains way below the pre-coronavirus levels.

Meanwhile, election-related tensions and vaccine-related uncertainties remain alive. Johnson & Johnson (JNJ) halted dosing in all clinical studies on its coronavirus vaccine candidate, JNJ-78436735. Last month, AstraZeneca/Oxford University had paused the global studies on their coronavirus vaccine candidate as a patient in the U.K. suffered an unspecified illness. However, studies have resumed in the U.K., Brazil, South Africa, India and Japan.

Against this backdrop, below we highlight a few ETFs that gained the most last week.

Advisorshares DW Micro-Cap ETF (DWMC) – Up 13.0%

The AdvisorShares Dorsey Wright Micro-Cap ETF is an actively managed ETF that seeks long-term capital appreciation by investing in exchange-listed, micro-cap equities with sufficient liquidity that generally have a market capitalization of less than $1 billion (read: Small-Cap ETFs Outperforming Bigger Peers: Here's Why).

Since small-cap stocks are more closely tied to the domestic economy, resurgence in coronavirus cases in Europe pushed investors to the domestic land. U.S. economic datapoints were upbeat. In recent weeks, despite postponing the stimulus talks, President Trump indicated that he wants Congress to approve a stand-alone bill that would allow a second round of $1,200 checks. All these factors aided the micro-cap ETF.

Invesco S&P SmallCap Materials ETF (PSCM) – Up 11.8%

The underlying index is designed to measure the overall performance of the securities of U.S. basic materials companies. These companies are principally engaged in the business of producing raw materials, including paper or wood products, chemicals, construction materials, and mining and metals. Better economic indicators boosted the fund materially.

First Trust Nasdaq Food & Beverage ETF (FTXG) – Up 7.3%

Retail sales rose at grocery stores gained 12.1% in the first nine months of 2020 from the year-ago period. This clearly explains why the fund gained materially.

Principal U.S. Large-Cap Multi-Factor Core Index PLC – Up 7.3%

The fund invests at least 80% of its net assets in large-cap U.S. equities. The index uses a quantitative model designed to identify equity securities of companies in the Nasdaq US Large Cap Index that exhibit potential for high degrees of value, quality growth and strong momentum.

Principal Shareholders Yield ETF PY – Up 7.1%

The fund uses a quantitative model designed to identify equity securities (including value stock) of mid- to large-capitalization companies in the Nasdaq US Large Mid Cap Index (the "parent index") that exhibit higher degrees of shareholder yield. The fund yields 3.26% annually. In the low-rate environment, investors probably rushed to grab the high-yielding fund.     

Pacer Cash Cows Fund of Funds ETF HERD – Up 6.0%

The underlying Pacer Cash Cows Fund of Funds Index uses an objective, rules-based approach to construct a portfolio that is composed of the ETFs that seek to provide exposure to companies with high free cash flow yields. The fund yields 2.15% annually.

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Invesco SP SmallCap Materials ETF (PSCM): ETF Research Reports
First Trust NASDAQ Food Beverage ETF (FTXG): ETF Research Reports
Principal Shareholder Yield Index ETF (PY): ETF Research Reports
AdvisorShares Dorsey Wright MicroCap ETF (DWMC): ETF Research Reports
Pacer Cash Cows Fund of Funds ETF (HERD): ETF Research Reports
Principal U.S. LargeCap MultiFactor Core Index ETF (PLC): ETF Research Reports
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