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Top-Ranked ETFs That Crushed the Market in a Month

Sweta Killa

Amid trade and Brexit uncertainty, Wall Street has gained solid momentum to start the fourth quarter with all the three major indices hitting new all-time highs last week. This is especially true against the backdrop of renewed trade deal optimism, better-than-expected earnings and monetary easing policy that have bolstered the risk appetite of investors (read: 5 High-Beta ETFs & Stocks for a Record Market).  

Both China and the United States agreed last month to finalize the phase one trade deal, which is expected to be signed later this month. Meanwhile, of the 447 S&P members that reported Q3 results, 72.5% companies beat EPS estimates and 57.9% beat on revenues. The proportion of these companies beating EPS and revenue estimates is in the historical range.

The Fed slashed interest rates once again by 25 basis points last month, representing the third rate cut for the year. Lower interest rates have made borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. The combination of factors is providing a huge boost to the stock market.

The latest rally has been broad based with many corners of the space generating above-market returns over a month. We have highlighted one ETF from these outperforming zones with a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy), suggesting continued outperformance for the rest of the year.

SPDR S&P Semiconductor ETF XSD – Up 9.6%

This ETF offers exposure to the semiconductor corner of the broad tech sector. It tracks the S&P Semiconductor Select Industry Index, holding 35 stocks in its portfolio. The fund has AUM of $419.9 million and charges 35 bps in fees per year. It trades in average daily volume of 114,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Semiconductor ETFs Riding High on Solid Earnings).

iShares Nasdaq Biotechnology ETF IBB – Up 9.4%

This fund provides exposure to 217 U.S. biotechnology and pharmaceutical companies by tracking the Nasdaq Biotechnology Index. IBB is the most-popular fund is the biotech space with AUM of $7 billion and average daily volume of 2.3 million shares. Expense ratio comes in at 0.47%. The product has a Zacks ETF Rank #2 with a High risk outlook.

Invesco S&P 500 Enhanced Value ETF SPVU – Up 8.9%

This fund follows the S&P 500 Enhanced Value Index, which measures the performance of stocks in the S&P 500 Index that have the highest value score. It holds 98 stocks in its basket and has an expense ratio of 0.13%. The ETF has accumulated $70.2 million in AUM while trades in light average daily volume of 7,000 shares. It has a Zacks ETF Rank #2 with a Medium risk outlook (read: Value ETFs Trumping Momentum ETFs: Here's Why).

First Trust NASDAQ Rising Dividend Achievers ETF RDVY – Up 8.5%

This fund provides exposure to a diversified portfolio of 50 companies with a history of paying dividends. It tracks the NASDAQ US Rising Dividend Achievers Index, charging investors 50 bps in annual fees. The ETF has amassed $974.4 million in its asset base and sees a good volume of 152,000 shares a day on average. It has a Zacks ETF Rank #2 with a Medium risk outlook (read: Worried About Dividend ETFs' Rally? 5 Low P/E Plays for You).

Janus Henderson Small Cap Growth Alpha ETF JSML – Up 8%

This ETF follows the Janus Henderson Small Cap Growth Alpha Index, which systematically identifies Smart Growth companies utilizing a process based on Janus Henderson’s 45+ years of fundamental research. The strategy seeks to provide risk-adjusted outperformance by identifying top-tier small-cap companies with some of the strongest fundamentals that have proven operational excellence and represent the top 10% of the eligible universe. It holds 211 stocks in its basket and has an expense ratio of 0.35%. The fund has AUM of $36 million and trades in a paltry volume of 6,000 shares a day on average. It has a Zacks ETF Rank #1.

First Trust Industrials/Producer Durables AlphaDEX Fund FXR – Up 7.9%

This fund targets the industrial sector of the broad U.S. market. It follows the StrataQuant Industrials Index, which uses the AlphaDEX methodology to select stocks from the Russell 1000 Index and ranks them on both growth and value factors. Holding 94 stocks in its basket, FXR has AUM of nearly $352.7 million and sees a moderate trading volume of about 78,000 shares a day. It charges 62 bps in fees per year and has a Zacks ETF Rank #2 with a Medium risk outlook (read: 4 Sectors Set to Surge in November: ETFs & Stocks to Buy).

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