With the easing of trade tensions and US-Mexico deal, the U.S. stock market continues to enjoy the longest bull run since World War II. Notably, the S&P 500 touched 2,900 for the first time in history and closed at record highs for the third consecutive session. The index is up 8.4% so far this year.
The surge was driven by the dual tailwinds of solid corporate earnings and a booming economy as suggested by rounds of upbeat data. The U.S. economy is witnessing the fastest pace of growth in nearly four years with a nearly two-decade low unemployment rate of 3.9% and 18-year high consumer confidence. Historic tax cuts, higher government spending and deregulation are fueling growth.
Additionally, the Fed is on track for gradual rates hike this year, citing that the economy is strong and can handle a tighter monetary policy. The central bank, which began to tighten monetary policy in 2015, has raised rates twice this year and is widely expected to do so again next month and in December. A rising rate scenario also signals a strengthening economy, which is spurring growth in the stock market.
While nine of the S&P 500 sectors are performing well, information technology is leading the rally, having climbed 19%. This was followed by gains of 17.3% for consumer discretionary and 11.4% for healthcare.
Given this, investors seeking to bet on the best-performing sectors on the S&P 500 index could consider the following ETFs & stocks. These have outperformed in the year-to-date time frame and will likely to continue to do so given that these have a solid Zacks Rank #1 (Strong Buy) or 2 (Buy).
Best Sectors ETFs and Stocks – Information Technology: Invesco Dynamic Software ETF (PSJ)
With AUM of $264.2 million, the Invesco Dynamic Software ETF (NYSEARCA:PSJ) targets the software corner of the broad technology space and follows the Dynamic Software Intellidex Index.
Holding 30 securities in its basket, it is well spread across components, with none accounting for more than 5.2% of assets. Expense ratio comes in at 0.63%.
The product has risen nearly 35% in the year-to-date time frame and has a Zacks ETF Rank #2 with a High risk outlook.
Best Sectors ETFs and Stocks – Information Technology: Turtle Beach Corporation (HEAR)
California-based audio technology company Turtle Beach (NASDAQ:HEAR) provides various gaming headset solutions for various platforms, including video game and entertainment consoles, handheld consoles, personal computers, and mobile and tablet devices under the Turtle Beach brand.
It has seen solid earnings estimate revision of $1.20 for this year over the past 90 days and has an expected growth rate of 1,004.17%. The stock carries a Zacks Rank #1 and has a VGM Score of B. It is up 1,317.8% so far this year.
Best Sectors ETFs and Stocks – Consumer Discretionary: Invesco DWA Consumer Cyclicals Momentum ETF (PEZ)
The Invesco DWA Consumer Cyclicals Momentum ETF (NASDAQ:PEZ) tracks the DWA Consumer Cyclicals Technical Leaders Index. It holds 40 stocks having positive relative strength (momentum) characteristics, with each holding less than 5.9% of assets.
About 31.1% of the portfolio is dominated by specialty retail closely followed by 19.5% allocation to hotels, restaurants and leisure. The fund has managed $73.9 million in its asset base while trades in a lower average daily volume of 15,000 shares.
It charges 60 bps in annual fees and has gained 18.6% so far this year. The product has a Zacks ETF Rank #2 with a Medium risk outlook.
Best Sectors ETFs and Stocks – Consumer Discretionary: Weight Watchers International Inc (WTW)
New York-based Weight Watchers International (NYSE:WTW) is the largest provider of weight-control programs in the world. The stock has seen positive earnings estimate revision of 10 cents for this year over the past 90 days, with an expected growth rate of 79.39%.
The stock has a Zacks Rank #2 and a VGM Score of B. Shares of WTW have gained 71.8% so far this year.
Best Sectors ETFs and Stocks – Healthcare: Invesco S&P SmallCap Health Care ETF (PSCH)
The Invesco S&P SmallCap Health Care ETF (NASDAQ:PSCH) provides exposure to the healthcare sector of the U.S. small-cap segment by tracking the S&P SmallCap 600 Capped Health Care Index. Holding 70 securities in its basket, it is widely diversified across components, with each holding less than 5.1% share.
From an industrial look, healthcare providers & services and healthcare equipment & supplies take the top two spots at more than 26% share each followed by biotechnology with 22.4% allocation. The product has amassed $1.1 billion in its asset base and trades in a moderate average daily volume of around 85,000 shares.
It charges 29 bps a year from investors and has surged 44.7% this year. The product has a Zacks ETF Rank #1 with a High risk outlook.
Best Sectors ETFs and Stocks – Healthcare: Amedisys Inc. (AMED)
Louisiana-based Amedisys (NASDAQ:AMED) is a leading provider of healthcare in the home with a vision of bringing a premiere solution for patients.
The stock has seen solid earnings estimate revision of 35 cents for this year over the past 90 days, with an expected growth rate of 53.39%. It has gained 136.7% so far this year, and sports a Zacks Rank #1. Amedisys has a VGM Score of B.
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