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November turned out to be a banner month for U.S. stocks, buoyed by optimism surrounding President-elect Donald Trump's victory. The Dow Jones and the S&P 500 Index logged in the best month of 2024, having risen 7.5% and 5.7%, respectively. The tech-heavy Nasdaq Composite Index saw its most positive month since May, gaining 6.2%. The small-cap Russell 2000 Index also registered its biggest monthly gain of 2024, surging more than 10%. 

Given this, investors should bet on ETFs that were winners in November and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy), suggesting outperformance in the coming weeks. We have highlighted five such funds from different segments of the market. These are ProShares Big Data Refiners ETF (DAT - Free Report) , First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) , SPDR S&P Bank ETF (KBE - Free Report) , iShares Russell Mid-Cap Growth ETF (IWP - Free Report) and WisdomTree Cloud Computing Fund (WCLD - Free Report) .

Wall Street remains optimistic about the incoming administration’s economic agenda. Though Trump’s policies on restricting illegal immigration, enacting new tariffs, lowering taxes and reducing regulations will accelerate inflation, limiting the Federal Reserve's ability to cut rates, they will likely boost the economy. The anticipation of greater tariff barriers and a step to move manufacturing back home is expected to drive stocks higher.

Further, the prospect of lower interest bodes well for the stocks in December. Lower interest rates generally lead to reduced borrowing costs that help businesses expand their operations more easily and result in increased profitability. This, in turn, stimulates economic growth and will provide a boost to the stock market.

According to the CME Group's FedWatch Tool, markets currently see a 65.4% chance of a 25-bps rate cut in December. Federal Reserve Chair Jerome Powell slashed interest rates two times over the past two months, bringing down the benchmark rate to 4.5%-4.75%. 

We have profiled the abovementioned ETFs in detail below:

ProShares Big Data Refiners ETF (DAT) – Up 21.5%

ProShares Big Data Refiners ETF invests in companies that help businesses process massive amounts of data to draw competitive insights. It tracks the FactSet Big Data Refiners Index and holds 29 stocks in its basket. ProShares Big Data Refiners ETF has amassed $6.9 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 3,000 shares and has a Zacks ETF Rank #2.

WisdomTree Cloud Computing Fund (WCLD) – Up 19.3%

WisdomTree Cloud Computing Fund offers exposure to emerging and fast-growing U.S.-listed companies (including ADRs) that are primarily focused on cloud software and services, and follow the BVP Nasdaq Emerging Cloud Index. It charges investors 45 bps in fees per year. WisdomTree Cloud Computing Fund has amassed 502.5 million in its asset base and trades in a volume of 102,000 shares a day on average. It has a Zacks ETF Rank #1.

First Trust RBA American Industrial Renaissance ETF (AIRR) – Up 13.1%

First Trust RBA American Industrial Renaissance ETF offers exposure to small and mid-cap securities in the industrial and community banking sectors by tracking the Richard Bernstein Advisors American Industrial Renaissance Index. It holds 54 stocks in its basket and charges 70 bps in annual fees. First Trust RBA American Industrial Renaissance ETF has $2.8 billion in AUM and trades in a good volume of around 426,000 shares per day on average. It has a Zacks ETF Rank #2.

SPDR S&P Bank ETF (KBE) – Up 11.9%

SPDR S&P Bank ETF offers equal-weight exposure to 94 banking stocks by tracking the S&P Banks Select Industry Index. Regional banks dominate the portfolio with a 71.8% share, while diversified banks, commercial & residential mortgage finance, diversified financial services and asset management & custody banks take the remainder. SPDR S&P Bank ETF has amassed $2.6 billion in its asset base while trading in a heavy volume of 2 million shares a day, on average. The product charges 35 bps in annual fees and has a Zacks ETF Rank #2.

iShares Russell Mid-Cap Growth ETF (IWP) – Up 11.3%

With AUM of $18.3 billion, iShares Russell Mid-Cap Growth ETF offers exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market by tracking the Russell MidCap Growth Index. It holds 288 securities in its basket, with key holdings in information technology, industrials and consumer discretionary. iShares Russell Mid-Cap Growth ETF charges 23 bps in annual fees and trades in a volume of 928,0000 shares. It has a Zacks ETF Rank #2.

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