After registering the worst day of the year on Aug 5, Wall Street strongly bounced back on upbeat Chinese trade data and fixing of its onshore currency at the weakest level since 2008. China exports unexpectedly rose 3.3% year over year in July amid the rising tariff environment while imports fell 5.6%, taking the country’s surplus to $45.06 billion.
Additionally, the People’s Bank of China (PBOC) jumped in to stabilize its currency. It set the official midpoint reference for the yuan at 7.0039 per dollar on Aug 8. Though it is the weakest point for the currency against the dollar since Apr 21, 2008, it is ahead of analyst expectation of 7.0222 per dollar, per Reuters. The central bank fixed the midpoint of the currency rate below 7 yuan per dollar for the second time today at 7.0136 per dollar — the weakest level since Apr 3, 2008.
The twin developments in China has eased fears of trade tensions and renewed investors’ confidence. In fact, the S&P 500 logged in its largest one-day percentage gain in about two months on Aug 8, with all the major sectors climbing at least 1%. The S&P 500 technology index, which was at the heart of the recent sell-off, led the way, climbing 2.4% on the day (read: 5 Niche Tech ETFs to Grab at $30 or Below).
With this gain, the S&P 500 and the Nasdaq erased all the losses, moving to the positive territory for the week. The S&P 500 is up 0.2% while the Nasadq is up 0.4% for this week so far. Meanwhile, the Dow Jones is modestly down 0.4%.
Given the rebound, we have highlighted five ETFs that are climbing and leading the broad market this week. Any of these could be excellent plays for investors seeking to ride on the recovering sentiments at least in the near term.
Invesco DWA Technology Momentum ETF PTF – Up 7.2%
This ETF provides exposure to the companies with relative strength (momentum), charging 60 bps in annul fees. It follows the Dorsey Wright Technology Technical Leaders Index and holds 39 securities in its basket. This ETF is illiquid but relatively unpopular with AUM of $257.2 million and average daily volume of 35,000 shares. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Tech ETFs That Are Less Ruffled to Start August).
Invesco Dynamic Software ETF PSJ – Up 6.1%
This ETF offers exposure to 30 companies that are principally engaged in the research, design, production or distribution of products or processes that relate to software applications and systems and information-based services. It tracks the Intellidex Index, which is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value. The product has amassed $536.6 million in its asset base and trades in good volume of around 69,000 shares a day. It charges investors 63 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
VanEck Vectors Video Gaming and eSports ETF ESPO – Up 6.3%
This ETF follows the MVIS Global Video Gaming and eSports Index, which is intended to track the overall performance of companies involved in video game development, esports, and related hardware and software. Holding 25 stocks in its basket, American firms make up for 37.4% of the portfolio, while Japan, China and South Korea round off to the next three spots with double-digit exposure each. ESPO has $29.5 million in AUM and trades in light volume of 11,000 shares. It charges 55 bps in fees from investors (read: U.S. ETFs Hit $4 Trillion in AUM: 4 Reasons Behind the Boom).
First Trust Technology AlphaDEX Fund FXL – Up 5.9%
This fund offers exposure to the broad technology sector by using the AlphaDEX methodology. In total, it holds 103 securities in its basket with AUM of $2.3 billion. Software & IT services takes the top spot in terms of industry look at 57.5% closely followed by 24% allocation in semiconductors & semiconductor equipment. The ETF trades in good average daily volume of 256,000 shares and charges 63 bps in fees per year. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Amplify Online Retail ETF IBUY – Up 5.7%
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 40 stocks and has attracted $258.6 million in its asset base. It charges 65 bps in fees per year and trades in a moderate volume of 49,000 shares a day (read: June Retail Sales Beat Forecast: ETF & Stock Winners).
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First Trust Technology AlphaDEX Fund (FXL): ETF Research Reports
Invesco DWA Technology Momentum ETF (PTF): ETF Research Reports
Amplify Online Retail ETF (IBUY): ETF Research Reports
Invesco Dynamic Software ETF (PSJ): ETF Research Reports
VanEck Vectors Video Gaming and eSports ETF (ESPO): ETF Research Reports
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