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6 Top ETFs of April

Sanghamitra Saha
Robust fundamentals and continued top-line improvement make Cohen & Steers (CNS) an attractive investment option.

The U.S. stock market has been upbeat in the month of April. The S&P 500 and the Nasdaq Composite hit record highs, gaining about 3.7% and 5.4%, respectively, as of Apr 26.

Upbeat economic data points like better-than-expected U.S. GDP data for the first quarter, some better-than-expected earnings, a host of unicorn IPOs and filings, rise in oil prices and a patient Fed took the markets to this height.

Against this backdrop, let’s take a look at the winning ETF areas of the month (as of Apr 26, 2019). Returns are as per xtf.com.

Breakwave Dry Bulk Shipping ETF (BDRY) – Up 14.4%

BDRY is an actively managed ETF that seeks to provide exposure to daily changes in the price of dry bulk freight futures. Though the freight rate market is not in a good position, there has been slight improvement of late (read: ETFs That Topped & Flopped in Q1).

iShares PHLX Semiconductor ETF (SOXX) – Up 10.8%

The underlying PHLX SOX Semiconductor Sector Index measures the performance of U.S. traded securities of companies engaged in the semiconductor business. Chipmakers had a good stretch in April. U.S.-China trade optimism is giving the space a boost.

Rising demand for cutting-edge technology, including cloud computing, big data, IoT, wearables, gaming, autonomous cars, VR headsets, drones, virtual reality, AI and machine has also bolstered investors’ sentiments toward this segment (read: Chipmakers on Fire: ETFs & Stocks Soaring to New Highs).

Invesco Solar ETF (TAN) – Up 10.75%

Solar stocks have been on a tear, probably due to the fact that investors bought last year’s dip. Also, there is news that some states, including California, are using solar subsidies to boost the adoption of solar power. California, in fact, mandated all new homes built starting in 2020 to have solar power. Invesco Solar ETF gained about 15.9% in the past month (read: 6 ESG ETFs Beating SPY This Year: Is There More Room to Run?).

Direxion MSCI Cyclicals Over Defensives ETF (RWCD) – Up 10.4%

The fund reflects a portfolio that has 150% long exposure to the MSCI USA Cyclical Sectors Index and 50% short exposure to the MSCI USA Defensive Sectors Index. Since the stock market has been hovering around a record-high, cyclical sectors have gathered higher momentum than the defensive ones (read: Relative Weight ETFs to Play Macro Trends).

iShares MSCI South Africa ETF (EZA) – Up 10.2%

South African mining stocks have witnessed their best start to the year since 2016 and the rally is still steady. The FTSE/JSE Africa Mining Index has been hovering around an eight-year high. The materials sector accounts for about 13% of the fund.

iShares US Regional Banks ETF IAT– Up 9.9%

U.S. treasury yield curve has steepened in the month. The benchmark 10-year U.S. treasury yield rose to 2.51% on Apr 26 from 2.49% at the start of the month, hitting a high of 2.60% in the mid-month. On the other hand, short-term, two-year U.S. treasury yield has dropped to 2.28% at month-end from 2.33% noticed at the start. This steepening of the yield curve works in favor of the regional banks as it boosts the net interest rate margin. The jump in the fund IAT is thus self-explanatory.

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iShares MSCI South Africa ETF (EZA): ETF Research Reports
 
Invesco Solar ETF (TAN): ETF Research Reports
 
iShares U.S. Regional Banks ETF (IAT): ETF Research Reports
 
iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
 
Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports
 
Direxion MSCI Cyclicals Over Defensives ETF (RWCD): ETF Research Reports
 
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