For Immediate Release
Chicago, IL - March 1, 2018 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include SPDR S&P Internet ETFXWEB , Loncar Cancer Immunotherapy ETFCNCR , VanEck Vectors Steel ETFSLX and Amplify Online Retail ETFIBUY .
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Here are highlights from Wednesday's Analyst Blog:
4 Market-Beating Sector ETFs of February
The U.S. stock market was stuck in a vicious sell-off in February as inflation fears and concerns over speedy rates hike unnerved investors during the month. The initial worries were triggered by the better-than-expected jobs report that pushed the major bourses into correction territory (a decline of more than 10% from their last peak reached in late January) in early month. Then, Fed minutes and the new Fed chairperson Jerome Powell took away some sheen from the riskier assets.
However, rounds of positive economic data as well as solid long-term fundamentals led to a rebound in stocks in the back half of the month. Rising income, growing employment, optimism surrounding the new tax legislation as well as a surge in global economic growth, which continued to boost consumers' confidence amid market turbulence, brightened up the outlook. In fact, the stocks recouped almost half of the losses seen early in the month.
That said, a few sectors have easily survived the market rout and are crushing the broad market this month. Below we have highlighted such four sectors and their best ETFs & stocks that have gained handsomely in February and could be better plays in the months ahead should the trends prevail.
After being hit by the broad market selloff in early February, the technology sector came back roaring and remained the hot spot for investors given the dual tailwinds of a rising rate scenario and the new tax repatriation policy. The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, and artificial intelligence (AI) as well as strong corporate earnings are acting as the key catalysts (read: These Tech ETFs Dispel Rate Hike Fears, Hit 52-Week High ).
SPDR S&P Internet ETF: This product, which targets the Internet corner of the broad tech space turned out to be a winner, climbing 4.7% this month. It tracks the S&P Internet Select Industry Index and holds 68 stocks in its basket with an equal-weight exposure of around 2%. The fund has accumulated $3.8 million in its asset base and charges 35 bps in fees from investors. It trades in a light volume of under 1,000 shares a day on average and carries a Zacks ETF Rank #3 (Hold).
The biotech sector got a boost from its non-cyclical nature, which provides a defensive tilt toward the portfolio in a turbulent market. Additionally, a wave of mergers and acquisitions and encouraging trends including faster drug approvals, new products and Trump's tax reform are adding to the strength (read: Biotech Crushing the Market: Best ETFs & Stocks YTD ).
Loncar Cancer Immunotherapy ETF: This product tracks the Loncar Cancer Immunotherapy Index and provides exposure to a basket of companies that develop therapies to treat cancer by harnessing the body's own immune system. It holds 31 stocks with heavy concentration on the top firm at 9.06% while other firms account for no more than 5.82% share. The ETF has amassed $54.2 million in its asset base and trades in a lower average daily volume of around 24,000 shares. The expense ratio comes in at 0.79%. The product has gained 3.8% this month and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook
This sector is surging given the possible tariff talks on foreign producers of steel and aluminum in the interest of national security. Trump is looking to impose severe tariffs of 24% on steel imports and 10% for aluminum imports. Additionally, President Donald Trump's latest statement on reviving the industry has bolstered the confidence in the growth of the steel industry, pushing the stocks and ETF higher.
VanEck Vectors Steel ETF : This fund provides pure play exposure to a small basket of 27 stocks by tracking tracks the NYSE Arca Steel Index. It is highly concentrated on the top firm - Rio Tinto - at 11% of assets while other securities hold no more than 8.9% share. American firms dominate the fund's returns at 37.2%, followed by Brazil (19.1%), the Netherlands (13.3%) and United Kingdom (11.1%). The ETF has amassed $177.6 million in its asset base and charges 55 bps in fees from investors. It trades in moderate volume of 64,000 shares a day on average and has added 2.9% this month (read: Steel ETF Soaring: Will the Trend Continue? ).
The retail sector showed upside potential thanks to a massive $1.5-trillion tax cut, which will provide consumers with extra cash that will lead to higher discretionary spending. Additionally, retailers, especially departmental stores are the biggest beneficiaries of the tax cut plan as they pay maximum taxes among the S&P 500 companies given their large domestic networks.
Amplify Online Retail ETF: This ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund comprises 39 stocks that are widely diversified, with each holding no more than 5.04% of assets. It has attracted $235.4 million in its asset base and charges 65 bps in fees per year. The product trades in a moderate volume of 70,000 shares a day and has gained 1.5% in February (read: 4 ETFs at the Heart of the Market Rebound ).
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