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5 Sector ETFs That Crushed the Market in December

December has been marked by heightened uncertainty and volatility for Wall Street. Though inflationary fears and the rapidly spreading Omicron variant of COVID-19 kept investors jittery, strong consumer confidence and holiday sales surge drove the market higher.

In fact, the S&P 500 hit a new peak in recent trading sessions and is hovering very close to a new milestone of 4,800. With just a few trading sessions left to end December, the S&P 500 index has gained 4.8%. A few sector ETFs have outperformed. These are SonicShares Global Shipping ETF BOAT, iShares North American Tech-Multimedia Networking ETF IGN, iShares MSCI Global Metals & Mining Producers ETF PICK, iShares U.S. Healthcare Providers ETF IHF, and AdvisorShares Restaurant ETF EATZ.

Rounds of good news led to positive returns in the market. Holiday retail sales surged the most in nearly two decades, powered by soaring e-commerce sales as well as a rush to stores amid supply chain concerns, rising inflation and a raging new COVID-19 variant (read: Holiday Sales Boom: Retail ETFs to Buy At a Bargain).

U.S. consumer confidence rose further in December, suggesting that the economy would continue to expand in 2022 despite a resurgence in COVID-19 infections and reduced fiscal stimulus. More consumers plan to buy houses and big-ticket items such as motor vehicles and major household appliances as well as go on a vacation over the next six months. Meanwhile, President Biden’s administration took steps to eliminate supply-chain bottlenecks, indicating that higher inflation will not last very long.

In another encouraging development, the Food and Drug Administration granted approval for oral antiviral COVID-19 pills to Pfizer PFE and Merck MRK, making them the first and second at-home treatments, respectively, for coronavirus and a potentially important tool in the fight against the fast-spreading Omicron variant.

Additionally, the central bank plans to buy $60 billion per month of bonds in combined Treasuries and agency mortgage-backed securities starting in January, down from $90 billion in December and 120 billion from the start of the pandemic through November. The move indicates a solid U.S. economy despite higher inflation.

Further, the Santa Claus rally added to the strength. Per MarketWatch, the Santa Claus rally had a best start in 20 years with the S&P 500 notching its 69th record of 2021. A Santa Claus rally refers to the increase in stock prices in the final week of the calendar year (i.e., between Christmas and New Year’s Day) that extends into the first two days of the New Year. The S&P 500 has averaged a 1.3% gain over this period every year since 1969, per The Stock Trader’s Almanac (read: ETF Ways to Play Santa Rally's Best Start in 20 Years).

According to Sundial Capital Research, the S&P 500 has gained an average of 2.66% over the past 92 years with positive returns 77% of the time.

We have highlighted the ETFs in detail below:

SonicShares Global Shipping ETF (BOAT) – Up 11.5%

The ongoing supply chain issues around the world caused by the pandemic continued to bolster the demand for shipping, pushing the rates higher. SonicShares Global Shipping ETF provides pure-play exposure to the global maritime shipping industry by tracking the Solactive Global Shipping Index. The index consists 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.

SonicShares Global Shipping ETF holds 53 stocks in its basket and has amassed $13.2 million in its asset base since its inception in August. The fund charges 69 bps in annual fees and trades in an average daily volume of 14,000 shares.

iShares North American Tech-Multimedia Networking ETF (IGN) — Up 11.5%

iShares North American Tech-Multimedia Networking ETF proved resilient amid the tech sell-off jitters. It provides exposure to telecom equipment, data networking and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. iShares North American Tech-Multimedia Networking ETF holds 22 securities in its basket (read: 4 Top-Performing Sector ETFs of Q4).

iShares North American Tech-Multimedia Networking ETF has accumulated $143.9 million in its asset base and charges 43 bps in annual fees. The product sees a lower volume of around 16,000 shares a day and carries a Zacks ETF Rank #2 with a High risk outlook.

iShares MSCI Global Metals & Mining Producers ETF (PICK) – Up 9.2%

As prices for various types of materials have been on the rise, PICK has been witnessing solid growth. iShares MSCI Global Metals & Mining Producers ETF offers exposure to companies that are involved in the extraction and production of diversified metals, aluminum, steel, and precious metals and minerals. It follows the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index.

iShares MSCI Global Metals & Mining Producers ETF holds 218 stocks in its basket with AUM of $1 billion. The United Kingdom, Australia and the United States are the top three countries with 22.5%, 19.4% and 15.4%, respectively. iShares MSCI Global Metals & Mining Producers ETF trades in volume of 303,000 shares per day on average while charging 39 bps in annual fees.

iShares U.S. Healthcare Providers ETF (IHF) – Up 9.2%

Healthcare, which generally outperforms during periods of low growth and high uncertainty, has garnered investors’ interest due its non-cyclical nature. iShares U.S. Healthcare Providers ETF follows the Dow Jones U.S. Select Healthcare Providers Index with exposure to companies that provide health insurance, diagnostics and specialized treatment. In total, the fund holds 71 securities in its basket.

iShares U.S. Healthcare Providers ETF has amassed $1.3 billion in its asset base, while volume is light at about 14,000 shares per day, on average. It charges 42 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Healthcare Providers ETF Hits New 52-Week High).

AdvisorShares Restaurant ETF (EATZ) – Up 8.3%

The holiday shopping season gave a boost to this restaurant ETF. AdvisorShares Restaurant ETF is an actively managed and the only ETF investing exclusively in the restaurant and foodservice industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. AdvisorShares Restaurant ETF holds 33 securities in its basket with a higher concentration on the top firm.

AdvisorShares Restaurant ETF has gathered $4.1 million in its asset base so far since its debut in late April this year. EATZ charges 99 bps in annual fees and trades in an average daily volume of 4,000 shares.


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Pfizer Inc. (PFE): Free Stock Analysis Report
 
Merck & Co., Inc. (MRK): Free Stock Analysis Report
 
iShares U.S. Healthcare Providers ETF (IHF): ETF Research Reports
 
iShares MSCI Global Metals & Mining Producers ETF (PICK): ETF Research Reports
 
iShares North American TechMultimedia Networking ETF (IGN): ETF Research Reports
 
AdvisorShares Restaurant ETF (EATZ): ETF Research Reports
 
SonicShares Global Shipping ETF (BOAT): ETF Research Reports
 
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