5 ETFs Leading The Current Market Rally

After recording the best week since 2011, the S&P 500 had its best start to December in eight years. Notably, the index gained 3.5% in a week and marks a sharp reversal from a week earlier when the S&P 500 stumbled into correction territory (read: S&P 500 Posts Best Week in 7 Years: 5 Best Leveraged ETFs).

The flurry of positive news has renewed the appeal for riskier assets. In particular, the trade truce between the United States and China at the Group of 20 meeting in Argentina over the weekend has averted an escalation in trade war. This is especially true as Trump agreed to halt new tariff for 90 days while China agreed to boost purchases of U.S. agricultural goods to reduce trade imbalance between the two countries.

The Fed’s dovish view, an accelerating economy and the prospect of addressing the glut in oil supplies added to the strength. Last week, Powell said that interest rates were "just below" the level that would be neutral for the economy — meaning they will neither speed up nor slow down economic growth. This is in contrast to October remarks — the rate was “a long way” from neutral — which led to worries that the rate increases will crimp growth. Additionally, the subsequent minutes from the central bank's latest meeting suggests that the Fed will likely raise rates this month but may stall rate hikes next year.

Additionally, the American economy has been on a solid pace of growth with robust job creation, strong GDP growth, a 50-year low unemployment rate, the fastest pace of wage gains in nearly a decade, and rising consumer and business confidence. Further, Russia and Saudi Arabia agreed to extend their agreement to curtail output resulting in a spike in oil prices.

If these weren’t enough, seasonality is playing an important role. History suggests that December is a good month for the stock market (read: Why You Should Buy High Beta, Momentum ETFs & Stocks Now).

Though there have been winners in every corner of the space, several ETFs have easily crushed the broad market fund (SPY (NYSE:SPY)) by wide margins. Below, we have highlighted five ETFs that have been star performers over the past week and are expected to continue their outperformance to end the year:

ProShares Online Retail ETF ONLN – Up 8.5%

This is the first ETF focused exclusively on retailers that principally sell online. It follows the ProShares Online Retail Index, holding 21 stocks in its basket. Amazon (NASDAQ:AMZN) accounts for the largest share of 24.2% in the portfolio. The product has amassed $28.9 million in its asset base. It currently trades in a paltry volume of around 18,000 shares a day on average. It charges 58 bps in annual fees from investors (read: Why to Buy the Dip in FAANG ETFs).

O’Shares Global Internet Giants ETF OGIG – Up 8.3%

This fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It holds a basket of 74 stocks with none accounting for 6.72% of assets. OGIG has been able to attract $49.14 million in its asset base since its debut in early June and trades in average daily volume of 69,000 shares. The fund charges 48 bps in annual fees.

Invesco Dynamic Software ETF PSJ – Up 8.1%

With AUM of $266.4 million, this ETF provides exposure to 30 software segments of the broader U.S. technology space with each accounting less than 5.7% share. It charges 63 bps in annual fees and trades in average daily volume of 40,000 shares. The product has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Tech ETFs to Give Thanks Amid Bloodbath).

Amplify Advanced Battery Metals and Materials ETF (V:BATT) – Up 7.9%

This is an actively managed ETF that seeks to provide exposure to lithium, cobalt, nickel, manganese and graphite via publicly-traded stocks. Holding 44 stocks in its basket, the fund is well spread across components with each making up for less than 5% of assets. BATT has accumulated $6.5 million in its asset base while trading in average daily volume of 10,000 shares. It has expense ratio of 0.72%.

ARK Web x.0 ETF ARKW – Up 7.8%

This is also an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 39 stocks in its basket, with each making up for no more than 7.1% share. The ETF has amassed $509.7 million in its asset base and trades in good average daily volume of around 175,000 shares. Expense ratio comes in at 0.75%.

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