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5 ETFs Surge With Wall Street on Trade Talk Hopes

Sweta Killa

After a wild ride in recent weeks, Wall Street heaved a sigh of relief on hopes of resumption in trade talks between the world’s two largest economies in early October. Notably, the S&P 500 and Dow Jones rallied 1.3% and 1.4%, respectively, while the Nasdaq jumped 1.7% on Sep 5 (read: 5 High-Beta ETFs to Buy on Trade Talk Hopes).  

Additionally, service activity in China expanded at the fastest pace in three months in August and hopes arose that Beijing will free up the amount of cash banks must keep as reserves to shore up the economy. These eased concerns over the cooling Chinese economy and drove stocks higher. China plans to implement both broad and targeted cuts in the reserve requirement ratio (RRR) for banks "in a timely manner," signaling that a cut in the key ratio aimed at boosting lending could be imminent.

Further, British lawmakers approved a law to delay Brexit and Hong Kong’s leader withdrew an extradition bill, which had triggered months of often violent protests in the China-ruled city. All these have spread air of optimism, pacifying investors worried about global growth.

The positive waves have brought back the appetite for riskier assets and led to a rally in many corners of the market. Below, we have highlighted five ETFs that gained most with the Wall Street rebound on Sep 5. Any of these could be excellent plays for investors seeking to ride on the current trends at least in the near term.

Invesco S&P SmallCap Energy ETF PSCE – Up 4.7%

This fund provides exposure to the U.S. small-cap segment of the energy sector by tracking the S&P Small Cap 600 Capped Energy Index. It holds 29 stocks in its basket with AUM of $19.4 million. Energy equipment & services accounts for 54.8% of assets, while oil, gas & consumable fuels takes the remaining portion in the basket. The fund trades in average daily volume of 20,000 shares and charges 29 bps in fees per year. It has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook (read: Spate of Positive News Boosts Oil ETFs).

ETFMG Alternative Harvest ETF MJ – Up 4.3%

MJ is the world’s largest ETF to target the global cannabis industry and tracks the Prime Alternative Harvest Index, which is designed to measure the performance of companies within the cannabis ecosystem, benefiting from the global medicinal and recreational cannabis legalization initiatives. The fund holds 40 securities in its basket with Canadian firms making up more than half of the portfolio and American firms comprising 26.8%. The ETF has AUM of $898.7 million and trades in a robust volume of around 565,000 shares. It charges 75 basis points in annual fee (read: Cannabis Expert Tim Seymour's Favorite Pot Stocks and ETF).

SPDR S&P Retail ETF XRT – Up 3.7%

This product tracks the S&P Retail Select Industry Index, holding 87 securities in its basket with each accounting for less than 2.2% of assets. Apparel retail takes the top spot at 22.3% share while automotive retail, Internet & direct marketing retail and specialty stores round off the next three spots with a double-digit allocation each. The fund has amassed $265.4 million in its asset base and charges 35 bps in annual fees. The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Consumer ETFs in Focus on Fresh Tariff Threats).

iShares PHLX Semiconductor ETF SOXX – Up 3.1%

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with heavy concentration on top holdings. The fund has amassed $1.6 billion in its asset base and trades in volume of about 770,000 shares a day. It charges a fee of 46 bps a year from investors and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Global X Copper Miners ETF COPX – Up 3.1%

COPX offers global access to a broad range of copper mining companies. It tracks the Solactive Global Copper Miners Total Return Index and holds 28 stocks in its basket. Canadian firms take the largest share at 32.7%, while Australia and China round off the next two spots. The product has managed $42.8 million in AUM, while charging 65 bps in fees per year. It trades in a light volume of 41,000 shares a day on average (read: Worst Sector ETFs of August).

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