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4 Best Investing Areas of Q4 & Their Top ETFs

Sanghamitra Saha
·3 min read

Despite year-long COVID-19 fears, Wall Street is ending the fourth quarter on a sweet note. October 2020, however, saw some solid stock market gyrations thanks to failed stimulus talks, subdued tech earnings and rising coronavirus cases on the global front.

But back-to-back positive vaccine updates from the likes of Pfizer, Moderna and AstraZeneca, and Joe Biden’s win with a divided Congress boosted markets in November. The winning spree continued in December with Trump’s signing of the second round of virus stimulus deal.

Overall, Wall Street is hovering at record highs with global markets too moving along. The S&P 500, the Dow Jones and the Nasdaq Composite added about 13.2%, 11.9% and 17.3%, respectively, in the past three months (as of Dec 28, 2020).

Against this backdrop, below we highlight a few top ETFs of the fourth quarter.

Winners

Clean Energy – Invesco WilderHill Clean Energy ETF (PBW) – Up 98.5%

Biden’s win and increasing global acceptance have been favoring the space. Biden has expansionary plans for clean energy. He is forming a plan — a Clean Energy Revolution — to address the issue of climate emergency. He sees America as becoming a 100% clean energy economy by 2035 and having net zero emission by 2050 (read: 4 Best Sector ETFs of Q4).

In fact, he has a $2-trillion-plan toward combating climate change that will eliminate carbon emissions from the power grid by 2035 and accelerate the uptake of electric vehicles. If this happens, the entire supply chain of the electric vehicle industry will be charged up (read: Top 4 ETF Areas of Last Week).

Genomics – ARK Genomic Revolution ETF (ARKG) – Up 71.5%

This ETF is active and does not track a benchmark. The next-generation healthcare solutions, which include genomics along with many other arenas, are on a tear. The area of genomics is excessively tracked for oncology treatment. Additionally, huge demand for the genomics research, rising government funding and declining sequencing costs are driving the space.

This actively managed ETF is focused on companies that are likely to benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments, and advancements in genomics into their business.

Metal Mining – VanEck Vectors Rare EarthStrategic Metals ETF REMX – Up 69.6%

Rare Earths include a group of 17 minerals that are used heavily in a lot of important applications, from consumer electronics to military equipment. So, rare earth metals got a boost from the expectation that economic recovery will drive the demand for these metals. The underlying MVIS Global Rare Earth/Strategic Metals Index tracks the overall performance of companies involved in producing, refining, and recycling of rare earth and strategic metals and minerals.

Marijuana – AdvisorShares Pure Cannabis ETF YOLO – Up 68.9%

Cannabis stocks have been on a tear in the ongoing quarter on Biden’s win. His victory could speed up the legalization of marijuana at the federal level, thereby providing a boost to the U.S. cannabis industry. Also, voters in Arizona, Montana, New Jersey and South Dakota voted in favor of the adult use of cannabis, bringing the total number of states that have cleared it for that purpose to 15.

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Invesco WilderHill Clean Energy ETF (PBW): ETF Research Reports
 
VanEck Vectors Rare EarthStrategic Metals ETF (REMX): ETF Research Reports
 
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
 
AdvisorShares Pure Cannabis ETF (YOLO): ETF Research Reports
 
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Zacks Investment Research
 
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