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S&P 500's Best Q3 Since 2010: Top ETFs & Stocks

Sanghamitra Saha
·4 min read

The S&P 500 posted its best third-quarter gains since 2010 with an advancement of 8.5%, led by the gains in the consumer discretionary sector. Overall, the third quarter of 2020 can be marked by a sturdy stock market rally at the start and then the usual September slowdown. Fiscal and monetary stimulus, coronavirus vaccine hopes, pent-up consumer demand and decent earnings releases kept global markets steady in July and August.

However, Wall Street recorded the first monthly decline in September since March. Doubts over a faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, reports of major banks engaging in transferring illicit funds, profit booking on tech stocks and pre-election volatility in the United States have spelt trouble for the markets. Overall, the S&P 500 recorded its best third-quarter this year since 2010.

Moreover, third quarter was all about huge M&A activities. ByteDance, TikTok’s Chinese owner, selected Oracle (ORCL) to be its technology partner in the United States. Gilead Sciences, Inc. (GILD) announced that it will purchase the oncology company Immunomedics (IMMU). Nvidia (NVDA) agreed to acquire the UK-based chip designer Arm Ltd from Japan's SoftBank Group. Such euphoria for deals in September resulted in a record third quarter with more than $1 trillion worth of transactions globally.

IPO market has probably witnessed the busiest third quarter since the dot-com years, per a MarketWatch article. More than 80 IPOs are expected to have raised $28.5 billion, according to Renaissance Capital Co-Founder and Chief Executive Bill Smith, as quoted on MarketWatch. No wonder, third quarter was upbeat for the broader market.

Against this backdrop, below we highlight a few winning ETFs and stocks of the S&P 500 index in the third quarter.

Winning Stocks

L Brands Inc. (LB) – Up 100.4% in the past 12 weeks.

The Zacks Rank #3 (Hold) L Brands evolved from an apparel-based specialty retailer to a segment leader focused on women’s and other apparel, personal care, beauty and home fragrance products.

FedEx Corporation FDX – Up 59.9% in the past 12 weeks

The Zacks Rank #1 (Strong Buy) FedEx Corporation is the leader in global express delivery services.

Advanced Micro Devices Inc. (AMD) – Up 54.5% in the past 12 weeks

The Zacks Rank #3 company has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider.

Winning ETFs

SPDR SP 500 ETF (SPY) – Up 10% past three months

The underlying S&P 500 Index is composed of five hundred selected stocks, all of which are listed on national stock exchanges and span over 25 separate industry groups. The Zacks Rank #2 fund charges 9 bps in fees (read: ETF Strategies to Gain From Vaccine Progress, M&A Deals).

Vanguard SP 500 ETF (VOO) – Up 10% past three months

The underlying S&P 500 Index measures the performance of the large-capitalization sector of the U.S. equity market. The Zacks Rank #2 fund charges 3 bps in fees.

iShares Core SP 500 ETF IVV – Up 10% past three months

The underlying S&P 500 Index measures the performance of the large-capitalization sector of the U.S. equity market. The Zacks Rank #2 fund charges 3 bps in fees.

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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
FedEx Corporation (FDX) : Free Stock Analysis Report
 
SPDR SP 500 ETF (SPY): ETF Research Reports
 
L Brands, Inc. (LB) : Free Stock Analysis Report
 
iShares Core SP 500 ETF (IVV): ETF Research Reports
 
Vanguard SP 500 ETF (VOO): ETF Research Reports
 
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