US stocks were remarkably consistent in November on a back-to-back upbeat vaccine update from pharma companies likePfizer, Moderna and AstraZeneca. This raised hopes of returning to normalcy sooner than expected. Moreover, the chances of a split Congress in the United States, meaning status quo and the likelihood of no major policy changes in the medium term, helped the equity rally.
As a result, the S&P 500 (up 10.8%), the Dow Jones (up 11.9%), the Nasdaq Composite (up 11.8%) and the Russell 2000 (up 18.3%) – all held the last month. The Dow Jones recorded its best month since 1987 (and its best November since 1928).
The S&P 500 posted its best November ever. The Nasdaq Composite recorded its best monthly performance since April 2020. The industries and money sectors clocked their best month since April 2009 while the energy sector as represented by the XLE ETF saw its second-best month ever.
On Dec. 1, a group of bipolar senators announced a $ 908 billion “framework” for COVID-19 relief. This motivating prospect is very positive. Therefore, with a favorable investment background at the beginning of December, we expect the November rally to continue. Against this background, below we highlight a few ETF options for the current month.
Economy Siren Nasdaq NexGen ETF BLCN
The price of bitcoin hit an all-time high on November 30, helped by institutional buying. Bitcoin registered its all-time high in mid-December 2017. The increased acceptance of corporations in allowing customers to hold bitcoin and other virtual coins in their online wallets and shop them has been favoring the cryptocurrency. Several central banks are considering the recent introduction of digital currencies (read: ETFs to Win As Bitcoin Surges).
Libra cryptocurrency with Facebook support has also been rebranded “Diem” in an effort to gain regulatory approval by streamlining the project in a simpler way. While investors may not lay their hands on digital currency ETFs now, they can definitely familiarize themselves with the concept through blockchain ETFs like BLCN.
Autonomous Technology & Robotics ARK ETF ARKQ
Dow Jones S&P Indices will add Tesla Inc. to its benchmark S&P 500 Index at a time on December 21. “(Tesla) will be one of the largest weight additions to the S&P 500 in the last decade, and as a result will produce one of the largest funding trades in history S&P 500, ”S&P Dow Jones Indices, as quoted on Reuters. “With a stock market value of over $ 400 billion, Tesla will be among the most valuable companies ever added” to the S&P 500. Anyway, Tesla has been a hot stock this year.
“Tesla’s inclusion means that investment funds indexed to the S&P 500 will have to sell about $ 51 billion worth of shares of companies already in the S&P 500 and use that money to buy shares of Tesla, so that their portfolios accurately reflect the index ”, according to the S&P Dow Jones Indices, quoted on Reuters (read: ETFs to Play as Tesla Likely to Join the S&P 500 in December).
This in turn can benefit Tesla-heavy ARKQ ETFs. The fund emphasizes autonomous technology and robotics companies that pursue a disruptive innovation theme.
Vanguard Russell 2000 ETF Value VTWV
Sam Stovall, chief investment strategist at CFRA Research in New York, said, “Historically, November has been the best month for the Russell 2000, however, December usually results in the second-best monthly performance. ” The Russell 2000 reported average earnings of 2.15% in December, jumping 76% of the time for the highest rise, compared to an average gain of 1.47% for the S&P 500 and an earnings frequency of 73%, Stovall noted , as quoted in a source. Biden’s vaccine and transition hopes, in any event, will make the case for stronger small cap value investing (read: Why Is This the Right Time to Bet on Small Cap Value ETFs?).
SPDR S&P Retail ETF XRT
NRF noted that the retail sector has seen a V-shaped recovery as aggregate retail sales have grown consecutively and year-on-year every month since June. NRF expects online and non-retail sales to grow by 20% to 30% this year. Overall, the retail sector is expected to record a “strong finish” up to 2020 despite COVID-19. Amazon also had its “biggest holiday season to date” as customers turned to online shopping and dumped those in the store (read: ETFs to Win / Lose Thanksgiving Amid COVID-19 Restrictions).
Vanguard VYM ETF High Dividend Yield
As risk-forward sentiments are likely to last a little longer, we will eventually see an increase in treasury yields. In this type of scenario, betting heavily on a product that offers benchmark beating returns would be an interesting option. The VYM fund consists of common stocks of well-paying companies that are generally above average. It currently generates about 3.22% annually (read: ETFs to Play as Vaccine News Looks to Fear Outdoor Virus).
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SPDR S&P Retail ETF (XRT): ETF Research Reports
Autonomous Technology and Robotics ARK ETF (ARKQ): ETF Research Reports
Vanguard Russell 2000 Value ETF (VTWV): ETF Research Reports
Vanguard High Dividend Yield (VYM): ETF Research Reports
Nasdaq NexGen Siren Economy ETF (BLCN): ETF Research Reports
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