5 Sector ETFs Gaining in Double Digits to Start October

Wall Street posted weekly gains, with the S&P 500 and Nasdaq Composite Index posting their best week since July and the Dow Jones posting its largest weekly gain since August.

The optimism was largely based on the prospect of another round of fiscal stimulus from Congress. There were "really good" chances of reaching an agreement with Democrats in Congress on a new round of coronavirus incentives for the ailing US economy, according to Fox Business News. A Wall Street Journal report said Treasury Secretary Steven Mnuchin is preparing a $ 1.8 trillion proposal, closer to the $ 2.2 trillion package proposed by US spokeswoman Nancy Pelosi (see: 5 ETFs rise when “reflation trading” picks up hope of momentum).

In addition, growing expectations of a Democratic victory in next month's presidential election are driving stocks higher. Market speculators believe that if the Democrats take over the White House and both houses of Congress, fiscal stimulus will be put in place without much delay that would prop up stocks and the dollar. FiveThirtyEight's new analysis found a 68% chance the Democrats would win the Senate and hold the House of Representatives, increasing the chances of further significant momentum.

While there have been winners in many corners of the room, here are five sector ETFs that outperformed the market over the past week and gained double digits.

Credit Suisse S & P MLP ETN MLPO - Plus 26.7%

Most MLPs are involved in the processing and transportation of energy resources such as natural gas, crude oil and refined products. As such, they are not directly related to the price of oil and should be the main beneficiaries of an oil boom in the long term. As toll collectors, these MLPs generate income from volumes that flow through pipes and not from the price of raw materials. This ETN is linked to the S&P MLP index, which includes both master's limited partnerships and listed limited liability companies that have a similar legal structure to MLPs and share the same tax advantages. With an AUM of $ 14.4 million and an average daily volume of less than 1,000 shares, it's unpopular and illiquid in the MLP space. The grade calculates 95 basis points (bps) in annual fees.

The cannabis ETF THCX - up 18.6%

Cannabis stocks soar as Democratic Vice President Kamala Harris's nominee pledged a potential Biden government would decriminalize marijuana. In addition, Vermont is the 11th state to legalize recreational marijuana. This ETF offers investors exposure to a basket of stocks that is expected to benefit from the growth of the hemp and legal marijuana industries. With 29 stocks in the basket, the fund has an asset base of around $ 19.4 million and trades a good volume averaging around 29,000 stocks per day. There are annual fees of 70 basis points (see: Cannabis ETFs Rise Due to Kamala Harris' Promise to Decriminalize Marijuana).

ARK Genomic Revolution Multisector ETF ARKG - Plus 16.4%

The biotech sector has done well due to advances in the development of a coronavirus vaccine or treatment, and waves of mergers and acquisitions. In fact, this actively managed ETF has been the biggest beneficiary, focusing on companies likely to benefit from expanding and improving the quality of life of people and others by incorporating into their business technological and scientific developments, and improvements and advances in genomics. With an AUM of $ 2.3 billion, the fund has 44 stocks in its basket and an expense ratio of 0.75%. It trades at an average daily volume of 824,000 shares.

Invesco Solar ETF TAN - Plus 13.6%

The solar industry was set ablaze by alleged Democratic presidential candidate Joe Biden's urge for clean energy and infrastructure plans. TAN provides global exposure to the solar industry by tracking the MAC Global Solar Energy Index, which has 32 stocks in the cart. US companies dominate half of the fund portfolio, followed by China (26.2%) and Germany (5.7%). The product has an asset base of $ 1.5 billion and trades at a solid volume of around 824,000 shares per day. It charges investors a fee of 71 basis points per year and has a Zacks ETF Rank 2 (Buy) with a high risk outlook (see: Investors Rather Green Energy Before Choosing: Top ETFs, Stocks).

VanEck Vectors Rare Earths / Strategic Metals ETF REMX - Plus 11.5%

Rare earth metals received a boost from the executive order recently signed by President Donald Trump declaring the national emergency in the mining industry to secure domestic supplies of rare earth minerals. REMX offers exposures to companies that manufacture, refine, and recycle rare earths as well as strategic metals and minerals. It follows the MVIS Global Rare Earth / Strategic Metals Index and holds 20 stocks in its shopping cart. The ETF has an AUM of $ 173.1 million and an average daily volume of 222,000 shares. From a rural perspective, Chinese companies dominate the portfolio with a share of 43%, closely followed by Australia (27.2%) and Canada (10.5%). The product charges annual fees of 60 basis points.
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Invesco Solar ETF (TAN): ETF research reports

VanEck Vectors Rare EarthStrategic Metals ETF (REMX): ETF Research Reports

MLP Index ETN (MLPO) from Credit Suisse SP: ETF research reports

ARK Genomic Revolution ETF (ARKG): ETF research reports

The Cannabis ETF (THCX): ETF Research Reports

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