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5 ETFs Shining Bright Amid September Selling

Sweta Killa
·4 min read

After peaking in early September, the major U.S. bourses witnessed sharp selloffs. The S&P 500 has tumbled 7.5% so far this month while Dow Jones has declined 5.8%. The tech-heavy Nasdaq Composite Index is on the verge of the correction territory from the latest peak, having plunged 9.7%.

Notably, the S&P 500 is on track for its steepest decline in September since 2002, when it crumbled 11% in the month due to growing fears of inflating Internet-related stocks, according to Dow Jones Market Data (read: ETFs Winners & Losers to Start Another Rough Week).

The combination of lofty valuation, lack of additional fiscal stimulus package, election uncertainty and rising U.S.-China tensions weighed on investors’ sentiment. Resurgence in COVID-19 cases in the United States and Europe has sparked concerns over the global economic recovery and lockdown measures. Most parts of Europe have already re-imposed restriction measures.  

Further, a report, which claimed that global banks moved illicit funds over the past two decades despite warnings from U.S. officials contributed to the market decline. A new investigation by BuzzFeed and the International Consortium of Investigative Journalists found that banks’ internal compliance officers flagged a total of more than $2 trillion in transactions between 1999 and 2017 as possible money laundering or other criminal activity.

Amid the uncertainties, a few sectors have been surviving the market turmoil. We have highlighted five of them that have risen in the past month and could be compelling picks in the weeks ahead.

Renaissance IPO ETF IPO – Up 7.2%

This fund provides exposure to the largest and most-liquid, newly listed companies by tracking the Renaissance IPO Index. It currently holds 47 stocks in its basket with technology taking the top sector accounting for 46.1% share while healthcare and consumer discretionary round off the next two spots with double-digit allocations each. The fund has amassed $192.3 million in its asset base while it trades in a moderate volume of about 138,000 shares, probably implying additional cost beyond the expense ratio of 0.60% (read: Invest in Hottest IPOs With These ETFs).

Virtus LifeSci Biotech Products ETF BBP — Up 6.6%

The ETF follows the LifeSci Biotechnology Products Index, which measures the performance of biotechnology companies with at least one drug therapy approved by the FDA. Holding 47 stocks, the product has accumulated AUM of $26.4 million and charges 79 bps in fees per year. BBP trades in volume of 2,000 shares a day on average and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

Global X Education ETF EDUT – Up 4.7%

This ETF debuted in the space on Jul 10 and has attracted $5.8 million in its asset base. It seeks to invest in companies providing products and services that facilitate education, including online learning and publishing educational content, as well as those involved in early childhood education, higher education and professional education. The fund follows the Indxx Global Education Thematic Index and holds 36 stocks in its basket. It charges 50 bps in annual fees and trades in average daily volume of 18,000 shares.

Roundhill Sports Betting & iGaming ETF BETZ – Up 2.7%

This ETF is designed to offer retail and institutional investors exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. The fund holds 37 stocks in its basket and charges 75 bps in annual fees. It trades in an average daily volume of 214,000 shares and has amassed $126.7 million in AUM within four months of debut (read: Stay-At-Home ETFs to Soar Further on New Lockdown Measures).

Invesco Solar ETF TAN – Up 2.5%

This fund offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 32 stocks in the basket. U.S. firms dominate half of the fund’s portfolio, followed by China (20.7%) and Germany (6%). The product has amassed $1.2 billion in its asset base and trades in a solid volume of around 733,000 shares a day. It charges investors 71 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

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Invesco Solar ETF (TAN): ETF Research Reports
 
Virtus LifeSci Biotech Products ETF (BBP): ETF Research Reports
 
Renaissance IPO ETF (IPO): ETF Research Reports
 
Roundhill Sports Betting iGaming ETF (BETZ): ETF Research Reports
 
Global X Education ETF (EDUT): ETF Research Reports
 
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Zacks Investment Research
 
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