4 Sector ETFs That Are Up Double-Digits To Start August

The start of August has been solid for the U.S. stock market though uncertainty surrounding fresh government stimulus threatens to crimp the recovery. Notably, the Dow Jones Industrial Average has jumped 3.8% — its biggest percentage gain since Jun 5 — and the S&P 500 has added 2.5% — its biggest percentage gain since July 2. Meanwhile, the Nasdaq Composite Index topped the 11,000 milestone, having gained 2.5% last week.

Better-than-expected earnings releases and rounds of economic data, which indicate that the American economy is recovering, primarily drove the gains. The latest industry gauge indicates that U.S. manufacturing activity expanded in July at the fastest pace in more than a year. The unemployment rate dropped to 10.2% in July, below June's 11.1% mark. Apart from these, the rise in mergers and acquisitions also led to a spike in the stock market.

While the rally seems broad-based, a few sectors outperformed the market at the start of August. Below we have highlighted four such ETFs that raked in double-digits gain last week and could be better plays if the trend prevails.

Invesco Solar ETF (TAN - Free Report) – Up 13.7%

The solar industry has been on fire buoyed by solid earnings coupled with the presumptive Democratic presidential candidate Joe Biden’s push for clean energy and infrastructure plans. This ETF offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 27 stocks in the basket with each making up for not more than 9.1% of the assets. American firms dominate with half of the fund’s portfolio, followed by China (23.7%) and Spain (7.2%). The product has amassed $1.1 billion in its asset base and trades in a solid volume of around 466,000 shares a day. It charges investors 71 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

ETRACS Alerian Natural Gas MLP Index ETN (MLPG - Free Report) – Up 12.7%

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