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4 Best-Performing Sector ETFs of March

Sweta Killa

After being strongly complacent for the first two months this year, the Wall Street has been witnessing wild swings in March, thanks to the global growth concerns, which aggravated after a slew of weak economic data. Additionally, the Brexit issue and the still lingering uncertainty surrounding the U.S.-China trade deal remained an overhang on the market.

Further, the inversion of the yield curve (long-term rates fall below short-term), which historically signals an upcoming recession, continued to make investors jittery (read: 4 Safe Haven ETFs to Escape Recession Warnings).

However, the long-term fundamentals remain intact given the buoyant economy, rising wages, a higher consumer confidence and the recovery in oil prices. The U.S. housing market has also bounced back strongly of late. Record share buybacks and dividends also added to the strength.

That said, a few sector ETFs have easily outperformed the market and are trading in the green this month. Below we have highlighted such four ETFs that have gained handsomely in March and could be better plays in the months ahead, provided the positive trends prevail.

Invesco DWA Technology Momentum ETF PTF

The technology sector has been the biggest beneficiary of the broad market rally, driven by hopes for a trade deal and the Fed’s more dovish-than-expected view. In fact, PTF, which provides exposure to the companies with relative strength (momentum), has been leading with 5.1% gains. It follows the Dorsey Wright Technology Technical Leaders and holds 36 securities in its basket with each accounting for not more than 5% of the assets. The ETF is illiquid and relatively unpopular with AUM of $144.6 million and average daily volume of 14,000 shares. It charges 60 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Tech ETFs Soaring to All-Time Highs).

ARK Genomic Revolution Multi-Sector ETF ARKG

The biotech sector has been on the mend amid the ongoing industry consolidation and attractive valuations. Particularly, the surge in demand for artificial intelligence in the advancement of diagnoses and treatment across the health care spectrum has been driving this ETF higher. This is an actively managed ETF, focusing on the companies expected to benefit from the extension and enhancement of the quality of human and other life by incorporating technological and scientific developments plus improvements and advancements in genomics into their business. The fund holds 33 stocks in its basket with none accounting for more than 11.22% share and has 0.75% in expense ratio. It has accumulated $381.3 million in its asset base and trades in average daily volume of 146,000 shares. ARKG is up 4.2% this month (read: Best & Worst ETFs of Last Week).

First Trust Nasdaq Food & Beverage ETF FTXG

Being defensive in nature, the consumer staples sector sees steady demand despite an economic downturn due to their low level of correlation with economic cycles. These generally act as a safe haven amid political and economic turmoil. Stocks in these sectors generally outperform during periods of low growth and high uncertainty. As such, FTXG, offering exposure to U.S. companies within the food and beverage industry, gained 3.8% in March. This ETF tracks the Nasdaq US Smart Food & Beverage Index, holding 26 securities in its basket with none contributing to more than 8.8% share. It has AUM of just $2 million and charges 60 bps in annual fees. It sees a meager average daily volume of under 1,000 shares and has a Zacks ETF Rank #4 (Sell) (see: all the Consumer Staples ETFs here).

Invesco DWA Utilities Momentum ETF PUI

Being a low-beta sector, utility is relatively protected from large swings (ups and downs) in the stock market and is thus considered a defensive investment or a safe haven amid economic or political turbulence. While most utilities ETFs are trending higher this month, PUI has stolen the show rising 3.7% this month. This fund offers exposure to 31 companies that are showing relative strength (momentum) and tracks the DWA Utilities Technical Leaders Index. It holds 30 stocks in its basket with each making up for less than 4% share. The ETF charges 60 bps in annual fees and sees a moderate volume of around 87,000 shares on average. It has AUM of $241.1 million and a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

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