The U.S. economic backdrop and investors’ sentiments have remained mixed in recent weeks. A slew of earnings results for the second quarter and a new report on consumer spending for June came in stronger than expected last week.
While such data points triggered rising rate concerns, increasing cases of the Delta variant of COVID-19 also weighed on risk-on sentiments. The S&P 500, the Dow Jones and the Nasdaq Composite lost about 1%, 0.5% and 1.9%, respectively, last week (read: 5 Best Inverse/Leveraged ETF Areas of Last Week).
The U.S. treasury yield was 1.23% on Jul 20 versus 1.48% at the start of the month. No wonder, rate-sensitive sectors like real estate performed greatly in such an environment. Below we highlight two sectors and the related ETFs that have been hovering around an all-time high currently.
Real Estate
The real estate corner of the broad market has been an area to watch lately. A dovish Fed and fears for the Delta variant of COVID-19 have been keeping the rates low and boosting the rate-sensitive sectors like real estate (read: 5 Reasons Why REIT ETFs Are Surging).
The rise in cost of shelter is also a plus for the real estate stocks and ETFs. Rising home prices have also boosted the demand for renting. The job market is still far from steady. This means that demand for real estates for rent purpose is likely to remain strong from middle-income or low-income consumers.
Netlease Corporate Real Estate ETF NETL
Dow Jones REIT ETF SPDR RWR
Residential and Multisector Real Estate ETF REZ
NuShares Short-Term REIT ETF NURE
Healthcare
Earnings expectations of the healthcare sector are upbeat as the sector is likely to log 14.6% growth in the second quarter of 2021 on revenue growth of 15.7%, per the Earnings Trends issued on Jul 14, 2021. The spread of the Delta variant of COVID-19 should boost demand for vaccine makers, and other pharma and healthcare companies.
Most recently, Moderna (NASDAQ:MRNA), known for its success in the COVID-19 vaccine, entered the big league with its addition to the S&P 500 Index. S&P made the announcement late Thursday, and shares of Moderna surged 10.3% on Jul 16 on 4.5 times volume. The stock was up nearly 175% this year last week, leading to Moderna’s market valuation of more than $115 billion (read: Moderna Soars on Inclusion to S&P 500: ETFs in Focus).
Healthcare Alphadex First Trust ETF FXH
US Healthcare iShares ETF IYH
US Innovative Healthcare iShares Evolved ETF IEIH
Biotech Vaneck ETF BBH
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NETLease Corporate Real Estate ETF (NETL): ETF Research Reports
iShares U.S. Healthcare ETF (IYH): ETF Research Reports
VanEck Vectors Biotech ETF (BBH): ETF Research Reports
First Trust Health Care AlphaDEX ETF (FXH): ETF Research Reports
SPDR Dow Jones REIT ETF (NYSE:RWR): ETF Research Reports
iShares Residential and Multisector Real Estate ETF (REZ): ETF Research Reports
Nuveen ShortTerm REIT ETF (NURE): ETF Research Reports
iShares Evolved U.S. Innovative Healthcare ETF (IEIH): ETF Research Reports
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