Wall Street was moderate last week with the S&P 500 and the Nasdaq gaining about 0.7% and 2.7%, respectively, and the Dow Jones witnessing no movement. While the reopening of economies boosted risk-on sentiments,the Fed’s somber outlook on the coronavirus-stricken economy gave it a boost.
On policy matters, the Fed committee members expressed skepticism over using bond purchases to control the government bond yield curve, per CNBC. As a result, post meeting, the benchmark 10-year U.S. treasury yield gained by one bps to 0.68% on Aug 19 from a day earlier. The yield on two-year treasuries was steady at 0.14%. Overall, the yield curve slightly steepened on Aug 19.
Against this backdrop, below we highlight a few ETF areas that won big time last week.
Barclays (LON:BARC) Inverse U.S. Treasury Aggregate ETN (TAPR) – Up 17.4%
TAPR’s index uses an equal-weighting scheme for short positions in a variety of U.S. Treasury futures contracts: 2 year, 5 year, 10 year, long bond and ultra long. The note will gain in value if prices of Treasuries fall (and rates rise) across the yield curve. The Fed’s reluctance toward yield curve control steepened it slightly and boosted the fund.
MicroSectors FANG+ ETN (FNGS) – Up 7.8%
MicroSectors ETNs provide efficient and cost-effective access to concentrated sectors of the market. The FANG+ lineup provides +3x leveraged exposure to -3x inverse leveraged exposure to NYSE FANG+ Index performance. The fund has considerable exposure to Tesla (NASDAQ:TSLA). The stock gained 11.7% last week and hence the gains in GNGS are self-explanatory.
Consumer Cyclicals ETF PEZ – Up 7.7%
The underlying DWA Consumer Cyclicals Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on U.S. exchanges. PEZ charges investors 60 basis points in fee per year.
The consumer cyclical sector has been performing well lately on economic reopening hopes. A potential vaccine, a decline in virus-related hospitalizations in Texas and California, a likely recovery in 2021 and better-than-expected earnings have been driving the space.
ARK Genomic Revolution Multi-Sector ETF ARKG – Up 7.5%
Companies within ARKG benefit from enhancing the quality of human and other life by incorporating technological and scientific developments, and advancements in genomics into their business. Development in the area of antibody treatment and vaccine has been encouraging. So, the combination of technology, healthcare and genomics made this fund a winner amid COVID-19 outbreak.
Reality Shares Nasdaq NexGen Economy ETF BLCN – Up 6.3%
The underlying Reality Shares Nasdaq Blockchain Economy Index was created through a partnership between Reality Shares and Nasdaq, and constitutes the joint research, analysis and investigation of both groups on the emerging development of blockchain technology. The crypto market as a whole has enjoyed tremendous momentum.
Per a market source, “the blockchain in Bitcoin literally acts [as] a ledger; it keeps track of the balances for all users and updates them as money changes hands.” So, an improvement in the bitcoin market has helped blockchain too (read: Will Blockbuster Rally Of Bitcoin Last? ETFs In Focus).
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Invesco DWA Consumer Cyclicals Momentum ETF (PEZ): ETF Research Reports
Barclays Inverse US Treasury Composite ETN (TAPR): ETF Research Reports
Reality Shares Nasdaq NexGen Economy ETF (BLCN): ETF Research Reports
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
MICRSFANG (FNGS): ETF Research Reports
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