4 Sector ETFs That Gained Double Digits In A Volatile May

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The month of May witnessed wild swings particularly triggered by inflation worries that led to a broad sell-off in growth stocks like technology. As such, the tech-heavy Nasdaq Composite Index suffered a 1.5% loss, snapping a six-month streak of wins.

A key inflation indicator — the core personal consumption expenditures price index — jumped 3.1% year over year in April, the highest in nearly three decades. Although inflation is high, the Fed views this as temporary. The central bank is buying at least $120 billion of bonds each month and has kept benchmark short-term rates near zero.

Meanwhile, the S&P 500 and the Dow Jones hovered near record highs, gaining 0.6% and 1.9%, respectively, as the economy is recovering rather well form the pandemic lows on a wider reach of vaccines, massive stimuli, and reopening of the economy. Additionally, a huge infrastructure spending package is boosting consumer spending and confidence. Both the indexes were positive for the fourth consecutive month. The small-cap index, the Russell 2000, which is closely tied to economic growth, eked out a slight gain in May, posting the eighth straight positive month for the first time since 1995.

The gains were also driven by a massive budget as President Biden unveiled his $6 trillion budget proposal in spending on infrastructure, education, and other initiatives.

Against such a backdrop, we have highlighted four ETFs from various sectors that outperformed in May with double-digit gains and are likely to continue doing so, should the trends prevail.

iShares MSCI Global Silver Miners ETF (SLVP - Free Report) – Up 18.4%

Silver logged its largest monthly gain since December. The growing economy is pushing up inflation, thereby leading to higher demand for silver as an inflation hedge. Additionally, the white metal got boost from the global economic recovery that are spurring manufacturing and industrial activities.

SLVP follows the MSCI ACWI Select Silver Miners Investable Market Index, providing investors’ exposure to companies that derive the majority of revenues from silver exploration or metals mining. It holds 29 stocks in its basket with Canadian firms making up the lion’s share at 67.3% while the United States round off the next spot with a double-digit exposure. SLVP has AUM of $354 million and an average daily volume of about 208,000 shares. It charges 39 bps in annual fees.

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