The U.S. stock market saw a stupendous bull run over the past few weeks. In fact, both the S&P 500 and Dow Jones Industrial Average are on track to record their best month since March having gained 4.4% and 6%, respectively, so far. The Russell 2000 index also outperformed, surging 12.8%.
The uninterrupted rally was triggered off by President-elect Trump’s expansionary and inflationary proposals and was then fueled by a combination of other factors. Some of these include the return of the earnings growth era, the rise in oil price, hopes of another rate hike since last year, moderation of dollar strength, an improving U.S. economy and of course the holiday fervor that raised the appeal for riskier assets.
Against such a backdrop, the spread out exposure to all market caps or a definite tilt toward small caps might lead to outsized gains. Nevertheless, some sectors look incredible under Trump presidency and the current market environment, and investors could easily bet on them.
For these investors, we delved into the Zacks ETF Rank to find the best picks. The system takes into account factors such as industry outlook and expert surveys; and then applies ETF-specific factors (like expense ratios and bid/ask spreads) to spot the best funds in each sector. Using this system, we found a handful of ETFs that have earned a Zacks ETF Rank #1 (Strong Buy) in the latest ratings update, and could thus outperform in the months ahead.