Three Besties: The Top ETFs to Watch in September
Three Besties: The Top ETFs to Watch in September
Our analyst's list proxy preferences for natural resources, tech and gold
- China appears ready to buffer the economy against further slowdowns.
- Natural resources, technology, and gold offer interesting options
- Performance in September depends on the Fed's rate hike path.
So, what are the three most important ETFs to track in September? Our proxy preferences for natural resources, tech and gold.
SPDR S&P Global Natural Resources ETF
The SPDR S&P Global Natural Resources ETF (GNR) is an exchange-traded fund (ETF) that exposes you to several natural resources sectors, including mining, metals, energy, and agriculture. While the ETF performed poorly in August, falling about 4%, several tailwinds are developing that may help to boost its performance in September.
One of the main factors that may help to lift GNR’s price in September is recent stimulus actions out of China. The People’s Bank of China (PBOC) and the central government of the People’s Republic of China (PRC) appear ready and willing to buffer the economy against further slowdowns.
This should help to alleviate China’s ailing economy, which is traditionally a commodity-hungry machine. Several companies that make up GNR’s top holdings should benefit from these moves, particularly BHP Group (BHP). The Australian miner produces coal, iron ore, and copper, among other products that China heavily sources.
While China’s property sector growth remains subdued, investors should focus on other tailwinds for BHP, which makes up around 4.6% of the GNR ETF. Coal should be in hot demand through September, like it has been in recent months, as China’s government continues to permit new coal power plant capacity. According to a report from the Centre for Research on Energy and Clean Air, China permitted 52 gigawatts of new coal power plant construction while also announcing 41 GW for new projects.
ARK Innovation ETF
A fund that focuses on disruptive innovation headed by Cathie Wood, the ARK Innovation ETF (ARKK) is coming off a disappointing August, sinking nearly 15% following several months of healthy gains. Is now the right time to buy this ETF for a turnaround in September?
A lot of that depends on overall market sentiment, with ARK’s holdings being comprised primarily of high-beta technology stocks. While that makes the fund vulnerable to shifts in risk sentiment, it also positions it to do well when the market rallies.
Currently, Tesla (TSLA), Roku Inc. (ROKU) and Zoom Video Communications (ZM) make up the fund’s top-three holdings at about 27%. These are stocks that have done well when the broader technology sector does well. These risk-on moves occurred when the market expects the Federal Reserve may stop hiking rates soon.
A series of weak economic data in late August caused rate traders to cut their bets on Fed hikes, which allowed the market to rally during the last week of August. If that trend continues, the ARK ETF looks poised to capture those gains. This may depend on some high-impact economic releases slated for early September, including the U.S. jobs report.
SPDR Gold Trust ETF
Gold prices struggled in August, but there are signs that the winds are shifting for the yellow metal. September may offer the perfect time to increase your portfolio’s exposure. The Fed and its rate hikes are once again a primary factor to consider here.
Treasury yields are likely near a cyclical high, with many seeing the Fed at or near the end of its current rate hiking cycle. U.S. economic data such as consumer confidence is waning, and job openings are decreasing. That signals to the Fed that the economy is softening, and it may not require more action besides sitting back and watching the economy slow.
If that were the case, we may see bond buyers move back into the market, which would help lower yields, thus helping the non-interest-bearing asset. In this scenario, the SPDR Gold Trust ETF (GLD) would be likely to perform well.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.