5 ETF Winners of Coronavirus Pandemic

·5 min read

It’s been a year since the World Health Organization declared COVID-19 a pandemic, which brought the economy to a standstill and led to a crash in the stock markets. Though the U.S. economy is far from pre-pandemic levels, it has shown solid improvement from the pandemic-led lows. Meanwhile, the stock market has strongly bounced back and reached new milestones.

The solid rebound came on the back of an unprecedented and continued stimulus from the central bank and the government, progress on more coronavirus vaccines, and faster vaccine deployment. The combination of all these factors led to pent-up demand, resulting in higher demand for all types of products and services in the economy (read: 10 Sector ETFs Flying Higher on a Recovering Economy).

Additionally, the Fed has pledged to maintain its accommodative stance and will continue to buy $120 billion in Treasury and mortgage-backed securities per month. A low interest rate bodes well for the stocks as it pushes up economic activities and results in higher spending. Further, the Biden administration and its proposals have infused optimism into the economy.

The rounds of solid upbeat economic data indicate stronger-than-expected recovery. The U.S. added 379,000 jobs — the highest since October —  in February while unemployment fell to 6.2%. U.S. manufacturing activity increased to a three-year high last month with acceleration in new orders. Consumer spending rose the most in seven months in January while construction spending surged to a record high, boosted by strong private and public outlays. Strong corporate earnings as well as signs of a healing labor market also bode well for economic growth.  

In fact, the S&P 500 and Dow Jones hit series of new highs lately while the tech-heavy Nasdaq Index is below 5% of all-time highs as it bore the brunt of the recent tech sell-off triggered by the surging yields, which had resulted in fears of overvaluation. Investors should note that surging yields is an indicator of strong economic growth rather than inflation fears. The Nasdaq Index outperformed in the past year, having climbed about 86%. Meanwhile, the S&P 500 and Dow Jones have risen nearly 60% and 53%, respectively, in the same time frame.

While every corner of the market has rallied, information technology was the strongest winner for most part of the pandemic on e-commerce boost. However, it was overtaken by cyclical sectors as the economy improves. Below, we have highlighted five ETFs from different sectors that have easily outperformed the market and gained more than 200% in a year amid the pandemic.

Amplify Seymour Cannabis ETF CNBS – Up 266.1%

With AUM of $129.9 million, CNBS is actively managed and invests 80% of its assets in securities of companies with 50% or more of their revenues from the cannabis and hemp ecosystem. The fund holds 27 securities and charges 75 basis points (bps) in annual fees. It trades in an average daily volume of 314,000 shares (read: Should You Invest in Marijuana Stocks & ETFs Now?).

Amplify Transformational Data Sharing ETF BLOK – Up 264.3%

This fund is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It has AUM of $1.2 billion in its asset base and trades in an average daily volume of 1.2 million shares. The product holds a basket of 54 stocks with American firms dominating about 56.8% of the portfolio, followed by Asia Pacific (36.8%). The ETF has an expense ratio of 0.71% (read: 5 ETFs At The Forefront of Tech Rebound).

Invesco WilderHill Clean Energy ETF PBW – Up 242.8%

This ETF offers exposure to companies that are publicly traded in the United States and engaged in the business of advancement of cleaner energy and conservation. It follows the WilderHill Clean Energy Index and holds 57 stocks in its basket with none accounting for more than 3.1% of assets. The product has amassed $2.6 billion in its asset base and trades in a solid volume of around 1.1 million shares a day. It charges investors 70 bps in fees per year.

First Trust ISE-Revere Natural Gas Index Fund FCG – Up 230%

This fund offers exposure to U.S. stocks that derive a substantial portion of their revenues from the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 32 stocks in its basket. The fund has amassed $196.8 million in its asset base while charging 60 bps in annual fees. Volume is good with 1.2 million shares exchanged per day on average. The product has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: ETFs & Stocks Leading the Energy Rally This Year).

Amplify Online Retail ETF IBUY – Up 211.9%

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 58 stocks and has attracted $1.7 billion in its asset base. It charges 65 bps in fees per year and trades in average daily volume of 282,000 shares.

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