Investors can play it differently this holiday season and gift some top-ranked handpicked ETFs that can enhance the portfolio returns of their loved ones. Here we have highlighted five such options like iShares U.S. Technology ETF IYW, First Trust Nasdaq Semiconductor ETF FTXL, The Industrial Select Sector SPDR Fund XLI, Invesco S&P MidCap Momentum ETF XMMO and SPDR S&P Retail ETF XRT.
Currently, the environment in Wall Street seems to be a little cautious due to the hot inflation readings. Otherwise, several factors can keep the rally moving like encouraging economic data releases, recovering U.S. economy from the pandemic-led slump, accelerated coronavirus vaccine rollout along with President Biden signing the more than $1-trillion infrastructure bill.
Against this backdrop, let’s take a detailed look at the ETF options that are looking good:
iShares U.S. Technology ETF
Technology plays an instrumental role amid the COVID-19 uncertainty in aiding people to maintain safe-distancing norms. The major technology companies’ resilience to the coronavirus crisis have supported the tech-heavy index amid the pandemic in 2020. However, the sector’s long-term story remains intact with the emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, AI and machine. The deployment of 5G technology — the next wireless revolution — is creating more opportunities. The wave of mergers and acquisitions is also providing impetus to the space.
iShares U.S. Technology ETF seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Russell 1000 Technology RIC 22.5/45 Capped Index.
iShares U.S. Technology ETF has AUM of $9.31 billion. IYW charges investors 41 bps in annual fees, as stated in the prospectus. iShares U.S. Technology ETF currently sports a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook (read: 4 Sector ETFs & Stocks for Bountiful Returns in November).
First Trust Nasdaq Semiconductor ETF
The semiconductor industry has been increasingly gaining investors’ attention backed by its bright prospects. The coronavirus-induced work-from-home and web-based learning trends have spurred demand for chips from PC manufacturers and data-center operators. The increasing importance of Hybrid cloud among enterprises is attracting investments from large public cloud providers, including Amazon Web Services, Microsoft Azure, Google Cloud, International Business Machines and Oracle. The data-center chip providers will likely gain from this trend.
First Trust Nasdaq Semiconductor ETF follows the Nasdaq US Smart Semiconductor Index.
First Trust Nasdaq Semiconductor ETF charges 60 bps in fees a year from investors and has AUM of $98 million. It flaunts a Zacks ETF Rank #1 (read: Semiconductor ETFs Flying High on Slew of Q3 Earnings Beat).
The Industrial Select Sector SPDR Fund
The latest data on U.S. industrial output appears to be encouraging as recoveries from the damages caused by Hurricane Ida are apparent. Per the Fed’s recently-released data, total industrial production increased 1.6% in October after declining about 1.3% in September. There was a 1.2% rise in manufacturing output (hitting its highest level since March 2019). Going on, there was a 1.2% uptick in utility production and a 4.1% upside in mining production.
The Industrial Select Sector SPDR Fund seeks to provide investment results that, before expenses, match the performance of the Industrial Select Sector Index. The fund seeks to provide precise exposure to companies in the following industries: aerospace and defense; industrial conglomerates; marine; transportation infrastructure; machinery; road and rail; air freight and logistics; commercial services and supplies; professional services; electrical equipment; construction and engineering; trading companies and distributors; airlines; and building products.
The Industrial Select Sector SPDR Fund has AUM of $18.39 billion and its expense ratio is 0.12%. The Industrial Select Sector SPDR Fund carries a Zacks ETF Rank #1, with a Medium-risk outlook (read: Wall Street Still Has Room to Run: ETFs to Play).
Invesco S&P MidCap Momentum ETF
Wall Street has been loudly cheering the third-quarter earnings season. There have also been certain upbeat economic data releases that have raised investor optimism. The coronavirus vaccine rollout is gradually helping control the spread of the outbreak across the globe. Accordingly, the global demand and economic growth levels are on the path of recovery from the pandemic-led slump. Investors and vaccine makers like Moderna and Johnson & Johnson have reasons to cheer the latest update concerning the application of COVID-19 booster shots. Investors have rotated back into growth-oriented market areas in recent weeks on optimism surrounding the economic recovery.
Invesco S&P MidCap Momentum ETF follows the S&P Midcap 400 Momentum Index, designed to identify mid-cap firms with the highest momentum scores.
XMMO has AUM of $1.07 billion and an expense ratio of 0.33%. Invesco S&P MidCap Momentum ETF flaunts a Zacks ETF Rank #1 (read: High Momentum ETFs to Buy on Wall Street’s Winning Streak).
SPDR S&P Retail ETF
Investors looking for attractive opportunities to park their money to rake in good returns can zero in on the retail sector. Market pundits are anticipating an impressive retail sales figure in 2021 along with a strong holiday season. In an encouraging development, the retail sales data was remarkable. The metric rose 1.7% in October (the largest surge since March), beating economists’ estimate of a 1.4% rise. This, in turn, marks a 16.3% increase from the year-ago figure (according to a Reuters article). The metric rose for the third consecutive month. Online sales surged 10.2% from the year-ago level.
With AUM of $1.17 billion, SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, holding 107 securities in its basket, with each accounting for not more than 1.68% of assets. Apparel retail, Internet & direct marketing retail, specialty stores and automotive retail are the top four sectors with a double-digit allocation each.
SPDR S&P Retail ETF charges 35 bps in annual fees. SPDR S&P Retail ETF carries a Zacks ETF Rank #1, with a Medium-risk outlook (read: ETFs to Buy on Fund Managers’ Big Bet on U.S. Stocks).
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Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
SPDR S&P Retail ETF (XRT): ETF Research Reports
iShares U.S. Technology ETF (IYW): ETF Research Reports
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
Invesco S&P MidCap Momentum ETF (XMMO): ETF Research Reports
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Zacks Investment Research