ETFs
5 Sector ETFs with Double-Digit Gains in May – May 30, 2024
Wall Street saw a strong rally in May, supported by new Fed rate cut bets, strong corporate profits and the artificial intelligence (AI) boom. All three major exchanges hit record highs this month, hitting new milestones. The S&P 500 topped 5,300, the Dow Jones Industrial Average touched 40,000, and the Nasdaq Composite Index topped 17,000 for the first time ever (read: Nasdaq surpasses 17,000: 5 best performing stocks in the ETF since the start of the year).
The gains were widespread and well distributed across different segments. Some of the top performers in the ETF space in different market segments were S&P Kensho Cleantech ETF (CTEX – Free report) , SonicShares Global Shipping ETF (BOAT – Free report) , Silver Miner ETF Themes (MIGA – Free report) , Sprott Junior ETF for Uranium Miners (URNJ – Free report) And Strive US Semiconductor ETF (SHOCK – Free report) .
Profits rose 6% in the first quarter of 2024, the highest growth rate seen in almost two years. NVIDIA (NVDA – Free report) blockbuster earnings have spread enormous optimism across the stock market in recent weeks, alongside the global AI boom.
The latest data series showed that the US economy is once again on track for another solid rise in GDP in the second quarter. Growth in U.S. business activity accelerated sharply to its fastest pace in more than two years in May, following two months of slower growth, driven by a recovery in the services sector. Consumer confidence, as indicated by the Conference Board Confidence Index, increased in May after three months of decline.
Wall Street is becoming more bullish on stocks, given the improving outlook for earnings and economic growth. Over the past two weeks, three equity strategists tracked by Yahoo Finance raised their year-end targets for the S&P 500. The median target on Wall Street for the benchmark index now stands at 5,250, up from 4,850 on Dec. 30, according to Bloomberg data.
According to the latest Bank of America survey, expectations of lower interest rates rather than earnings optimism have made investors the “most optimistic” since November 2021. Around 82% of global fund managers are expect a first rate cut from the Fed in the second half of the year, while 78% say a recession is unlikely over the next 12 months.
However, uncertainty over the timing of rate cuts has continued to weigh on investor confidence of late.
Focus on ETFs
Let’s look at the details of the ETFs mentioned above:
S&P Kensho Cleantech ETF (CTEX – Free report) – Up 19%
The clean energy sector has benefited from the optimism sparked by AI. Artificial intelligence is poised to accelerate and propel the energy transition, being both a large consumer and facilitator of clean energy. Growing demand for data centers is fueling the need for renewable electricity. The S&P Kensho Cleantech ETF invests in companies involved in developing and building green technologies that could power the future in areas such as hydropower, solar, wind and geothermal by tracking the S&P Index Kensho Cleantech. He holds 32 stocks in his basket, each representing no more than 6.2% of the shares. The S&P Kensho Cleantech ETF has the largest allocations to the capital goods and semiconductor sectors.
The S&P Kensho Cleantech ETF has accumulated $3.5 million in its asset base and charges 58 basis points in annual fees. It trades an average daily volume of 500 shares and has a Zacks ETF Rank #4 (Sell).
SonicShares Global Shipping ETF (BOAT – Free report) – Up 18.4%
Global shipping stocks have surged amid global geopolitical tensions and strong corporate profits, with many hitting new highs. The SonicShares Global Shipping ETF provides pure exposure to the global shipping industry by tracking the Solactive Global Shipping Index. The index is comprised of global shipping companies engaged in the maritime transportation of goods and raw materials, including consumer and industrial products, vehicles, dry bulk, crude oil and liquefied natural gas (read: 4 ETF Zones Oscillating Around 52-Week Highs).
The SonicShares Global Shipping ETF holds 49 stocks in its basket and has since amassed $55 million in its asset base. The fund charges 69 basis points in annual fees and trades an average daily volume of 19,000 shares.
Silver Miners ETF Themes (MIGA – Free report)
Silver topped $30 an ounce for the first time in decades, buoyed by bets on a Fed rate cut, forecasts of a fourth annual market deficit, rising industrial demand , rising geopolitical tensions and uncertainties ahead of general elections in major economies. The white metal has been one of the best-performing major commodities year-to-date, outperforming gold. The Themes Silver Miners ETF led the way in May. It provides exposure to companies that earn revenue from silver mining by tracking the STOXX Global Silver Miners Index.
The Themes Silver Miners ETF holds 24 stocks in its basket and charges 35 basis points in annual fees. It has amassed $0.6 million in assets since its inception in May (read: ETFs are benefiting from silver prices, which are at their highest level in a decade: will the rally last?).
Sprott Junior Uranium Miners ETF (URNJ – Free report) – Up 13.1%
Uranium stocks have increased due to growing demand for uranium, supported by AI’s insatiable energy needs and supply disruptions. The Sprott Junior Uranium Miners ETF is the only ETF focused purely on junior uranium mining companies selected for their potential for significant revenue and asset growth. It follows the Nasdaq Sprott Junior Uranium Miners Index, designed to track the performance of mid-, small-, and micro-cap companies in uranium mining-related businesses. He holds 33 stocks in his basket and charges 80 basis points in annual fees.
The Sprott Junior Uranium Miners ETF has accumulated $399.1 million in its asset base and trades in an average daily volume of 179,000 shares (read: AI’s Insatiable Energy Needs Boost Uranium ETFs).
Strive US Semiconductor ETF (SHOCK – Free report) – Up 13%
The Strive US Semiconductor ETF received a boost, particularly from NVIDIA, which has been on a solid run with no signs of slowing down. The wave of continued investment in AI and blockbuster profits have pushed NVDA stock to another milestone. The AI chipmaker, the world’s third-most valuable company, is just $100 billion in market value short of overtaking Apple (AAPL) in a major shake-up of Wall Street’s biggest players. Notably, NVIDIA occupies first place in SHOC with 31% of assets (read: AI’s Insatiable Energy Needs Boost Uranium ETFs).
The Strive US Semiconductor ETF seeks broad market exposure to the US semiconductor sector. It tracks the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket. The ETF has $68 million in assets under management and charges 40 basis points in annual fees. It trades an average volume of 13,000 shares per day and has a Zacks ETF Rank #2 (Buy).
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