5 ETFs That Led the Rebound on Monday
Wall Street recovered from its biggest weekly losses of the year on Monday, driven by bargain hunting and looming Fed rate cuts. The S&P 500, Nasdaq Composite Index and the Dow Jones Industrial Average rose 1.2% each with broad-based recovery.
We have highlighted five ETFs from various industries that took flight amid the solid market rebound. These are AdvisorShares Pure US Cannabis ETF MSOS, Valkyrie Bitcoin Miners ETF WGMI, VanEck Vectors Digital Transformation ETF DAPP, Range Cancer Therapeutics ETF CNCR and Themes Gold Miners ETF AUMI.
Inside the Rebound
Investors are betting that the Fed will start cutting rates this month, which would bolster a slowing economy. Lower interest rates generally lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and provides a boost to the stock market. The CME FedWatch Tool shows that investors expect a 25-bps rate cut from the Fed next week, with just a 25% chance of a 50-bps cut (read: Sector ETFs Set to Explode as Fed Rate Cut Bets Gain Steam).
When the Fed starts cutting rates, most sectors will receive a boost. Cyclical sectors like consumer discretionary, industrials and financials will benefit from lower rates. Reduced borrowing costs can lead to increased consumer and business spending. It will encourage lending at banks and potentially lead to increased consumer and business loan activity. High-yield sectors like utilities and real estate will also benefit significantly from rate cuts, given their sensitivity to interest rates.
Technology is also not behind. As the tech sector relies on borrowing for superior growth, borrowing more money for further initiatives is cheaper when interest rates are low. Additionally, securities in capital-intensive sectors like telecom will benefit from lower rates as businesses will face lower loan rates over time.
ETFs That Led the Way
AdvisorShares Pure US Cannabis ETF (MSOS) – Up 11.4%
Cannabis stocks soared after former President Donald Trump signaled his support for reducing restrictions on marijuana use. Trump said he would vote in favor of Florida's ballot measure to legalize marijuana for recreational use. AdvisorShares Pure US Cannabis ETF is the first actively managed ETF listed in the United States with dedicated cannabis exposure focusing exclusively on U.S. companies, including MSOs. It holds 25 securities in its basket, with a double-digit concentration on the top four firms.
AdvisorShares Pure US Cannabis ETF has amassed $811.3 million in its asset base and trades in an average daily volume of $9 million shares. It charges 83 bps in annual fees.
Valkyrie Bitcoin Miners ETF (WGMI) – Up 8.6%
Bitcoin bounced back to top $57,000 after falling to a one-month low of $54,000 last week. The gains came as bargain buyers stepped into cryptocurrency markets to take advantage of steep losses. Notably, bitcoin tumbled 9% for its worst weekly performance since August 2023. Valkyrie Bitcoin Miners ETF is an actively managed ETF available through Nasdaq that invests in public companies in the bitcoin mining industry. It holds 20 stocks in its basket (read: Top and Flop ETFs of Last Week).
Valkyrie Bitcoin Miners ETF has amassed $106.7 million in its asset base while trading in an average daily volume of 364,000 shares. WGMI charges 75 bps in annual fees.
VanEck Vectors Digital Transformation ETF (DAPP) – Up 8.5%
The technology sector, which was among the hardest hit last week, was the top performer yesterday, and DAPP the biggest ETF winner. VanEck Vectors Digital Transformation ETF aims to offer exposure to companies that are at the forefront of digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets.
VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 22 securities in its basket. It charges 51 bps in annual fees and trades in an average daily volume of 197,000. DAPP has accumulated $101.7 million in its asset base.
Range Cancer Therapeutics ETF (CNCR) — Up 5.5%
The healthcare sector is benefiting from enthusiasm in areas like weight-loss treatments. Range Cancer Therapeutics ETF offers exposure to a wide range of cancer therapeutic modalities. It follows the Range Cancer Therapeutics Index and holds 75 stocks in its basket. Range Cancer Therapeutics ETF has AUM of $12.7 million and charges 79 bps in annual fees.
The fund trades in an average daily volume of 6,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Top-Ranked ETFs to Buy at a Bargain).
Themes Gold Miners ETF (AUMI) – Up 3.8%
The upcoming rate-cut bets drove gold price higher. This is because gold becomes more appealing when interest rates fall compared to fixed-income assets such as bonds, which would yield weaker returns in a low-interest-rate environment. Themes Gold Miners ETF seeks to track the Solactive Global Pure Gold Miners Index, which identifies the largest 30 companies by market capitalization that derive their revenues from gold mining. It holds 24 stocks in its basket, with Canadian firms accounting for 50.9%, followed by Australian firms with a 30.5% share.
Themes Gold Miners ETF has accumulated $2 million in its asset base while trading in an average daily volume of 1,000 shares. It charges 35 bps in fees per year.
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Range Cancer Therapeutics ETF (CNCR): ETF Research Reports
AdvisorShares Pure US Cannabis ETF (MSOS): ETF Research Reports
VanEck Digital Transformation ETF (DAPP): ETF Research Reports
Themes Gold Miners ETF (AUMI): ETF Research Reports