3 ETFs Surging at Start of 2015 ETF News And Commentary
Post on: 17 Июль, 2015 No Comment
The U.S. markets saw a shaky start to 2015, thanks to concerns about the impact of a stronger dollar and lower oil prices on corporate earnings growth. Moreover, global growth uncertainty played foul with both the World Bank and International Monetary Fund slashing their growth forecasts. Geopolitical tensions, turmoil in Greece and weakness in key emerging markets didn’t help matters.
However, an improved U.S. economy, quantitative easing (QE) by the European Central Bank, Fed’s dovish comment and an arrest in sliding crude prices have provided some relief to the U.S. markets over the past couple of weeks. Rising U.S. consumer confidence, improved jobs market and encouraging housing data are fueling the markets to new highs (read: 3 Country ETFs Scaling New Heights in 2015 ).
While there have been winners in many corners of the U.S. markets, equities have been the best performing asset class in the year-to-date frame. Below, we have highlighted three ETFs that have been the best performers in the U.S. equity markets. These products have easily managed to crush the roughly 3% returns by the broad U.S. equity market ETF SPDR S&P 500 ( SPY ). returning in double digits since the start of the year.
Investors can keep a track of these ETFs and add to their portfolio, should they continue to keep their winning streak intact.
Thanks to increased merger and acquisition activities, ever-increasing health care spending, an insatiable demand for new drugs, an aging population and growth in the emerging markets, biotech ETFs continued with their solid run into the New Year. In fact, most of the biotech ETFs have been the best performing products in the U.S. market since the start of the year returning in double digits in the year-to-date frame.
XBI has been the top performing ETF and has returned 16% this year. This fund follows the S&P Biotechnology Select Industry Index and holds about 88 securities in its basket. It is quite well spread out across its components with none of the stocks having more than a 2.2% allocation (read:  3 Biotech ETF Winners from 2014’s Best Performing Sector ).
The ETF puts more focus on small- and micro-cap stocks at 78% of the portfolio, while mid and large caps account for the rest. The product has nearly $2 billion in AUM and sees solid volume of 650,000 shares per day. It charges 35 bps in annual fees and currently carries a Zacks ETF Rank #2 or Buy rating.
PowerShares Dynamic Energy Exploration & Production ETF ( PXE )
After being one of the worst performing products last year and even starting 2015 on a bad note, energy funds have performed quite well over the past few weeks. This is especially true as oil prices got some relief lately following a 60% slide in the past seven months.  A large number of oil exploration companies across the globe have slashed their capital spending and the number of U.S. oil rigs has been declining for weeks. This is likely to curb oil production and reduce the global supply glut in the coming months, leading to improving oil prices (read: Will the Exploration & Production ETFs Surge Continue? ).
PXE tracks the Dynamic Energy Exploration and Production Intellidex index, holding 30 stocks in its basket. It is pretty well spread out across various securities as none of these holds more than a 5.8% share. It is a high cost choice in the space with 0.64% in expense ratio. The ETF has AUM of $110 million and trades in a low volume of nearly 55,000 shares per day. PXE currently has a Zacks ETF Rank #5 or ‘Strong Sell’ rating.
SPDR S&P Semiconductor ETF ( XSD )
Semiconductors are enjoying a strong rally on encouraging industry fundamentals and growing investor demand for securities in the space. This will likely lead semiconductor sales to increase 5.4% this year to $358 billion, per Gartner Inc. (IT). Capacity utilization, advanced technologies, smartphone upgrades and new gadgets are fueling demand for chips and other semiconductor products (read: Bet on These Top Ranked Tech ETFs for Outperformance ).
XSD provides exposure to the semiconductor segment of the broad U.S. technology market, holding 47 stocks in its portfolio. It is widely spread out across each security as none of these holds more than 3.5% of the assets. The fund is less popular and illiquid with AUM of $200.8 million and average daily volume of roughly 100,000 shares. It charges 35 bps in fees per year and has gained over 9.1% in the year-to-date frame. XSD has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating.
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